You have been asked by management to explain the variances in costs under your inpatient capitated contract. The following data is provided. Budget Actual Inpatient Costs $12,568,500 $16,618,350

You have been asked by management to explain the variances in costs under your inpatient capitated contract. The following data is provided.

Budget Actual

Inpatient Costs $12,568,500 $16,618,350

Members	42,000	42,000
Admission Rate	0.070	0.095
Case Mix Index	0.90	0.85
Cost per Case (CMI = 1.0)	$4,750	$4,900

7. What dollar amount of the total variance is attributed to Enrollment Variance?

8. What dollar effect did the increased admission rate have on cost?

9. The intensity of care delivered dropped from a budgeted case mix of 0.90 to an actual case mix of 0.85. What dollar effect did this have on actual costs?

10. Costs per case increased to $4,900 from a budgeted value of $4,750. This increased actual total costs by what amount?

Members 42,000 42,000 Admission Rate 0.070 0.095 Case Mix Index 0.90 0.85 Cost per Case (CMI = 1.0) $4,750 $4,900 7. What dollar amount of the total variance is attributed to Enrollment Variance? 8. What dollar effect did the increased admission rate have on cost? 9. The intensity of care delivered dropped from a budgeted case mix of 0.90 to an actual case mix of 0.85. What dollar effect did this have on actual costs? 10. Costs per case increased to $4,900 from a budgeted value of $4,750. This increased actual total costs by what amount?