Hospital varaince analysis






The subsequent two spreadsheets provide workload (expressed
as relative weighted products (RWPs) for inpatient care), revenue, and
expense data for Schumpert Medical Center covering their fiscal years
2010 and 2011. The data includes FY10 actual workload, revenues, and
expenses; FY11 forecasted workload, revenues, and expenses; and FY11
year-to-date workload, revenues, and expenses. The Inpatient Product
Lines worksheet provides further details on the types of services
provided within each major service line. Using the available data,
perform a variance analysis on Schumpert Medical Center and answer the
following questions:1. What was the hospital's original profit forecast
(assume away any issues with depreciation, taxes, etc.)? Halfway through
the fiscal year, what is the hospital's revised projection for FY11
profits?
Answer:
2. Which inpatient service lines are overbudget? Which product lines are overbudget after accounting for workload increases?
Answer:
3.
What actions would you take at the mid-year point if you were a
fee-for-service hospital? In other words, where are the problem areas on
which you would focus your attention, and who might provide ideas for
"best practices" based on their performance?
Answer:
4. What
actions would you take at the mid-year point if you were a capitated
hospital? In this case, the revenue spreadsheet would be replaced with
an overall budget of $50 million with which to operate (rather than
being able to bill for each episode of patient care). Federal, state,
county, and city hospitals normally operate under a capped budget.
Additionally, many HMOs also operate under a fixed Per Member, Per Month
(PMPM) capitated process.

Schumpert Medical Center
Revenues Worksheet, Mid-Year Review

Inpatient
Inpatient Product Line Price/RWP "Forecasted RWPs
For FY11" "Projected IP Revenue
For FY11" "Actual RWPs
(FY11 YTD)" "Actual IP Revenue
(FY11 YTD)"
CIRC $6,010.65 724 $4,351,711 421 $2,530,676
DIGEST $6,021.65 1,161 $6,988,125 636 $3,830,402
ENT $6,001.65 130 $780,215 72 $433,948
GYN $6,013.65 219 $1,313,983 116 $697,128
MENTAL HEALTH $502.99 1,351 $679,539 736 $369,949
NERVOUS $6,103.65 228 $1,391,632 112 $682,744
NEWBORN $7,014.71 733 $5,141,782 433 $3,033,900
OB $5,713.65 1,501 $8,576,189 868 $4,960,622
ORTHO $6,084.18 631 $3,839,118 274 $1,664,658
OTHER $6,018.14 2,152 $12,951,037 800 $4,813,961
RESP $6,118.73 677 $4,142,380 197 $1,202,960
Total Inpatient Earnings 9,506 $50,155,710 4,664 $24,220,949

Expenses Worksheet, Mid-Year Review

Inpatient
Inpatient Product Line "Budget/RWP
(FY10)" " Actual RWPs
(FY10) " "IP Expenses
(FY10)" "Forecasted RWPs
(FY11)" "FY11 Budget
(FY10+6% Inflation)" "Actual RWPs
(FY11 YTD)" "Actual IP Expenses
(FY11 YTD)"
CIRC $5,475.81 690 $3,778,309 724 $4,202,356 421 $2,472,822
DIGEST $5,476.81 1,105 $6,051,875 1,161 $6,737,188 636 $4,356,173
ENT $5,477.81 124 $679,248 130 $754,842 72 $462,822
GYN $5,478.81 208 $1,139,592 219 $1,268,947 116 $777,322
MENTAL HEALTH $498.78 1,287 $641,930 1,351 $714,283 736 $400,730
NERVOUS $5,478.81 217 $1,188,902 228 $1,324,119 112 $675,173
NEWBORN $5,478.81 698 $3,824,209 733 $4,256,926 433 $2,971,020
OB $5,478.81 1,430 $7,834,698 1,501 $8,717,115 868 $5,472,892
ORTHO $5,478.81 601 $3,292,765 631 $3,664,557 274 $1,771,063
OTHER $5,478.81 2,050 $11,231,561 2,152 $12,497,823 800 $4,662,277
RESP $5,478.81 645 $3,533,832 677 $3,931,704 197 $1,233,771
Total Inpatient Expenses 9,055 $43,196,922 9,506 $48,069,860 4,664 $25,256,062

Product Line MDC Description
CIRC Diseases and Disorders of the Circulatory System
DIGEST Diseases and Disorders of the Digestive System
ENT Diseases and Disorders of the Ear, Nose, Mouth, and Throat
GYN Diseases and Disorders of the Female Reproductive System
MH Mental Diseases and Disorders
MH Alcohol/Drug Use and Alcohol/Drug Induced Organic Mental Disorders
NERVOUS Diseases and Disorders of the Nervous System
NEWBORN Newborns and Other Neonates with Conditions Originating in Perinatal Period
OB Pregnancy, Childbirth, and the Puerperium
ORTHO Diseases and Disorders of the Musculoskeletal System and Connective Tissue
OTHER Unknown
OTHER Diseases and Disorders of the Eye
OTHER Diseases and Disorders of the Hepatobiliary System and Pancreas
OTHER Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast
OTHER Endocrine, Nutritional and Metabolic Diseases and Disorders
OTHER Diseases and Disorders of the Kidney and Urinary Tract
OTHER Diseases and Disorders of the Male Reproductive System
OTHER Diseases and Disorders of the Blood, Blood Forming Organs, Immunological Dis
OTHER Myeloproliferative Diseases and Disorders, Poorly Differentiated Neoplasm
OTHER Infectious and Parasitic Diseases, Systemic or Unspecified Sites
OTHER Injuries, Poisonings and Toxic Effects of Drugs
OTHER Burns
OTHER Factors Influencing Health Status and Other Contacts with Health Services
OTHER Multiple Significant Trauma
OTHER Human Immunodeficiency Virus Infections
RESP Diseases and Disorders of the Respiratory System
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