Part 4. First Task: Analyze Revenues As part of your goal to improve the financi
ID: 2595942 • Letter: P
Question
Part 4. First Task: Analyze Revenues As part of your goal to improve the financial performance of the hospital, you are looking at ways to maximize revenues. At your first meeting, the CFO provides you with the following information: Insurance I : Pays 130% of variable costs-takes 120 days to pay Insurance 2: Pays 100% of variable costs-takes 90 days to pay Medicare: Pays 70% of variable costs-takes 30 days to pay Medicaid: Pays 30% of variable costs-takes 14 days to pay Obamacare: Pays 50 % of variable costs-takes 45 days to pay Self-Pay: Pays 5% of variable costs-Takes up to 180 days to pay Based on the above information provided by the CFO, prepare a brief report that addresses the following: Using T accounts, create the journal entries that would be made at delivery of care and when the payment is received under each scenario. Which revenue source is the most lucrative for the hospitalExplanation / Answer
MEDICARE
Gives the best return
2.33
% THE ORGANISATION PAYS OF VARIABLE COSTS
PERIOD DAYS IT DELAYS TO PAY
%/days
RESULT
%
10
INSURANCE I
130
120
130/120
1
INSURANCE 2
100
90
1.11
11
MEDICARE
70
30
2.33
12
MEDICAID
30
14
2.14
13
OBAMACARE
50
45
1.11
14
SELF PAY
5
180
.027
MEDICARE
Gives the best return
2.33
% THE ORGANISATION PAYS OF VARIABLE COSTS
PERIOD DAYS IT DELAYS TO PAY
%/days
RESULT
%
10
INSURANCE I
130
120
130/120
1
INSURANCE 2
100
90
1.11
11
MEDICARE
70
30
2.33
12
MEDICAID
30
14
2.14
13
OBAMACARE
50
45
1.11
14
SELF PAY
5
180
.027