For Case 10 (Fundamentals of Healthcare Finance, 6th edition) I need help with

Question 4: Decompose the revenue variances into enrollment and rate variances. Interpret your results.

Decomposing the revenue variances described above into enrollment and rate variances exposes that the aggregate enrollment variance was $123,278 (-4%). Therefore, enrollment across the four product lines was 4% lower than what was budgeted. Breaking this aggregate enrollment variance down across the four product lines reveals that PC Medicare ($13,600, 4%), SH Commercial ($33,829, 9%), and SH Medicare ($33,600, 20%) were all favorable to budget. Unfortunately, enrollment was highest in the PC Commercial product line, which was $204,307 below budget, for a total of -9%. These four product lines created the aggregate enrollment variance of $123,278, or -4%.

The aggregate rate variance was $181,012, 6% above budget. This variance indicates that per member, per month rates were 6% above what was budgeted. Breaking this variance down across the four product lines reveals that the two Medicare product lines, PC Medicare and SH Medicare, both came in equal to budget at 0%. The two Commercial product lines were above budget, with PC Commercial at $153,657 and SH Commercial at $27,355, both 7% above budget. This breakdown indicates that both commercial rates were 7% above what was budgeted. Combined with the Medicare product lines, rate variance overall was 6% above budget.

Combining rate variance and enrollment variance accounts for the overall aggregate revenue variance of $57,734, 2% favorable to budget.