Comprehensive Medical Care (CMC) is a family medical practice with 6 physicians and a nursing staff of 8 to 10 nurses and an administrative staff that varies from 4 to 7 personnel. Jay Kloger, the chief physician at CMC, is interested in studying the efficiency of the practice as a basis to set some benchmarks for further improvement, for rewarding his staff, and for comparing the efficiency of the CMC practice to other family medical practices. He is able to get comparable data for other practices from industry sources. So that the data is consistent with the industry sources, Jay has asked Marin & Associates, his accounting firm, to develop a set of productivity measures that would satisfy this requirement. Upon investigation, Joseph Marin finds that the measures to be used are the partial financial and operational productivity measures as defined in the chapter. The following information is for the last two years for the CMC practice:

Required

1. Compute the partial financial productivity ratios for nursing and administrative support for 2009 and 2010.

2. Separate the change of the partial financial productivity ratio from 2009 to 2010 into productivity changes, input price changes, and output changes.

3. Write a brief memo from Joseph Marin to Jay Kloger interpreting the findings above.

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2010 2009 30,000 27,600 Patient visits 18,675 18,600 Nursing hours used 12,225 12,500 Administrative hours used $39.00 $37.50 Cost of nursing support per hour Cost of administration per hour $25.56 $23.50 Industry average financial productivity Nursing .035 .034 Administrative 1.120 1.140