A variance analysis of the contribution margin: an approach to improving financial performance and reducing fiscal risk.(Report): An article from: Research in Healthcare Financial Management

This digital document is an article from Research in Healthcare Financial Management, published by International Society for Research in Healthcare Financial Management Ltd. on January 1, 2009. The length of the article is 5733 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.

From the author: The purpose of this paper is to develop a model that partitions the variance in the contribution margin into controllable portions. A controllable variance is defined as the difference between actual and standard results that is attributable to factors controlled, to a significant extent, by an individual or group associated with the institution. This paper demonstrates that the actual contribution margin is the sum of the standard contribution margin and a set of variances attributable to differences between the actual and standard gross price, payer mix, collection rate and volume of care. A set of interactive or joint variances indicates that improving profitability and reducing fiscal risk requires an interdisciplinary team consisting of the medical staff, fiscal services, line management and senior leaders of the healthcare organization. This paper concludes with the development of an interactive spreadsheet that can be used for sensitivity analysis, and a discussion of the usefulness of the results derived from the approach.

Citation Details
Title: A variance analysis of the contribution margin: an approach to improving financial performance and reducing fiscal risk.(Report)
Author: Robert W. Broyles
Publication:Research in Healthcare Financial Management (Magazine/Journal)
Date: January 1, 2009
Publisher: International Society for Research in Healthcare Financial Management Ltd.
Volume: 12 Issue: 1 Page: 77(16)

Article Type: Report

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