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A hospital expects 5 , 0 0 0 admissions for the year, but that number could vary by 1 , 0 0 0 more or
A hospital expects admissions for the year, but that number could vary by more or less. Its feeforservice is $ under the current prospective payment system. Under a capitation reimbursement system, the hospital must cover patients at a capitation payment of $ The hospital's variable costs are $ per admission and its fixed costs are $ Which of the following is most true?
The hospital's operating leverage is relatively high, so the prospective payment reimbursement method is riskier than the capitation method.
The hospital's operating leverage is relatively low, so the prospective payment reimbursement method is riskier than the capitation method.
The hospital's operating leverage is relatively high, so the capitation reimbursement method is riskier than the prospective payment method.
The hospital's operating leverage is relatively low, so the capitation reimbursement method is riskier than the prospective payment method.
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