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

Inpatient Costs Members Admission rate Case mix index Cost bercase (CMJ = 10) Budget $12,568,500 42,000 0.070 0.90 $4,750 Actual $16,618,350 42,000 0.095 0.85 $4,900