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Briefly describe (illustrate) the cost allocation process. (To keep things simple, use the direct method for your illustration.)
What are the three primary methods of cost allocation? What are the differences among them?
Define a relative value unit (RVU). Explain how RVUs can be used to set prices on individual services.
What is scenario analysis as applied to pricing and service decisions? Why is it such an important part of the process?
Suppose a hospital was offered a capitation rate for a covered population of $40 per membeBriefly explain how target costing would be applied in this situation.
Using a healthcare provider (e.g., a hospital) to illustrate your answer, explain the difference between a price setter and a price taker.
What other factors should Baptist's managers consider when making the capitation contract decision?
Why does utilization management play such an important role in pricingand service decisions under capitation?
It is common to express premium rates as PMPM. Does this mean that all providers will be capitated?
Of the three approaches, which one would be the most accurate? Which approach is the easiest to apply in practice?
What cost structure is best when a provider is capitated? Explain. What cost structure is best when a provider is reimbursed mostly by fee for service?
What are the critical differences in profit analysis when conducted in a capitated environment versus a fee-for-service environment?
What elements of profit analysis change when a provider moves from a fee-for-service to a discounted fee-for-service environment?
Write out and explain the equation for volume breakeven. What role does contribution margin play in this equation?
What is the impact of a discount contract on fixed costs, total variable costs, and the breakeven point?
Explain your rational for making decisions when these decisions are guided by the market process and command process.
Assume that San Mateo is a not-for-profit organization. What was its net income for the period? Assuming zero dividends, what was San Mateo's net income?
What was the clinic's dollar growth in assets during 2007, and how was this growth financed?
What are the three major sections of the statement of cash flows? What is the "bottom line" of the statement of cash flows, and how important is it?
Explain the difference between the equity section of a not-for-profit business and an investor-owned business.
What is the difference between liabilities and equity? What is the difference between long-term debt and notes payable?
What is the difference between gross fixed assets and net fixed assets?
What makes an asset a current asset? Provide some examples of current assets. What is net working capital, and what does it measure?
What is the implication of the accounting identity for the numbers on a balance sheet? What does the accounting identity tell us about a business's equity?
What is the difference between the income statement and balance sheet in regards to timing?