You have just taken a position as a financial analyst with the American Health Plan, a partially integrated delivery system, contracting with major employers for healthcare services. The financial and utilization data in TABLE 17-21 were presented to you regarding the previous completed year.

You have been asked to make some sense of this data and factor the total variance of $1,156,000 ($10,406,000 –

$9,250,000) into some subaccounts that suggest possible causes. Please review these data and calculate variances for inpatient and outpatient into the following areas:

■ Enrollment variance

■ Utilization variance

■ Efficiency variance (note that there is no case-mix intensity standard)

Even in situations when one person does have responsibility for both components, the separation is useful because it provides information for focused management correction.