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 per case (CMJ = 1.0) Budget $12,568,500 42,000 0.070 0.90 $4,750 Actual $16,618,350 42,000 0.095 0.85 $4,900