Essentials Of Cost Accounting For Health Care Organizations 3rd Edition by Steven Finkler, David Ward,Judith Baker

تمرين 12

Dr. Edwards is a surgeon who operates on patients in two different DRGs, DRG A and DRG B. Dr. Edwards has been press-; ing the hospital for more perks. He claims the hospital cannot afford to lose him now that he has become so cost-efficient. As evidence of his improved efficiency, he points out that in March, he operated on 13 patients. The total cost of treating the patients was $97,000. In April, he operated on 13 patients. The total cost of treating the patients was $92,700. According to Dr. Edwards, he has generated a total cost savings of $4,300. Although Dr. Edwards admits that his patient mix did change somewhat from March to April, he is sure the case-mix change was not what accounted for the bulk of the cost decrease for the patients he treated.
Your investigation determines that in March, he treated 5 DRG A patients with an average cost of $4,200 and 8 DRG B patients with an average cost of $9,500. In April he treated 6 DRG A patients and 7 DRG B patients. Costs in April for Dr. Edwards' patients were $4,600 for DRG A and $9,300 for DRG B. Although the April cost for DRG A patients had risen, Dr. Edwards points out that costs for the higher volume, higher cost DRG B patients had fallen.
Use the physician cost variance approach to develop a case-mix variance and a cost variance so we can better understand the impact of the changes in Dr. Edwards' practice from March to April. What other information would be of interest in this particular case?