Fundamentals of Healthcare Finance

Healthcare Finance
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Healthcare Finance
Fixed Cost = $5,000,000
Variable Cost Per Patient Day = $500
Revenue Per Patient Day = $750
2013 Patient Days = 34,000
1. What are the total costs for the organization?
Total Costs for Hospital X = Total Variable Costs + Fixed Costs (Reiter & Song, 2018).
Total Variable Costs = Variable Cost Per Patient Day * Number of Patient Days
=$500*34,000
=$17,000,000
Therefore; Total Costs for Hospital X = $5,000,000+$17,000,000
=$22,000,000.
2. Is the hospital making a profit or loss? What is the profit/loss?
Loss/Profit = Total Revenue – Total Costs (Reiter & Song, 2018).
Total Costs = $22,000,000
As such, we have to calculate the total revenue for Hospital X.
Total Revenue = Revenue Per Patient Day * Number of Patient Days
=$750*34,000
=$25,500,000
Therefore; Profit/Loss = $25,500,000 - $22,000,000
=$3,500,000
As such, Ho...