Formulate your answer based on the below information
Question
Formulate your answer based on the below information. The intensity of care delivered dropped from a budgeted case
mix of 0.90 to an actual case mix of 0.85. What dollar effect did this have on actual costs?
| You have been asked by management to explain the variances in costs under your inpatient capitated contract. The following data is provided. Use the following data to calculate the variances. | ||
| Budget | Actual | |
| Inpatient Costs | $12,568,500 | $16,618,350 |
| Members | 42,000 | 42,000 |
| Admission Rate | 0.070 | 0.095 |
| Case Mix Index | 0.90 | 0.85 |
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