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    CAMC Case 2 C2

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    Skirata75
    1. Franklin Health uses responsibility accounting where each physician is responsible for generating a set level of revenue. Creating cost centers where physicians are also responsible for keeping costs below a target could be a better approach to improve overall profitability. 2. The variance analysis for family practice and internal medicine doctors should consider factors like the number of office hours worked, number of office visits, and revenue generated compared to targets. Lower than expected office hours and visits resulted in less revenue. 3. The percentage deviation from expected contribution will be calculated for each department using year-to-date and prorated budgets for 2004-05 and 2005-06.

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    CAMC Case 2 C2

    Uploaded by

    Skirata75
    21 views2 pages
    1. Franklin Health uses responsibility accounting where each physician is responsible for generating a set level of revenue. Creating cost centers where physicians are also responsible for keeping costs below a target could be a better approach to improve overall profitability. 2. The variance analysis for family practice and internal medicine doctors should consider factors like the number of office hours worked, number of office visits, and revenue generated compared to targets. Lower than expected office hours and visits resulted in less revenue. 3. The percentage deviation from expected contribution will be calculated for each department using year-to-date and prorated budgets for 2004-05 and 2005-06.

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    1. Franklin Health uses responsibility accounting where each physician is responsible for generating a set level of revenue. Creating cost centers where physicians are also responsible for keeping costs below a target could be a better approach to improve overall profitability. 2. The variance analysis for family practice and internal medicine doctors should consider factors like the number of office hours worked, number of office visits, and revenue generated compared to targets. Lower than expected office hours and visits resulted in less revenue. 3. The percentage deviation from expected contribution will be calculated for each department using year-to-date and prorated budgets for 2004-05 and 2005-06.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    21 views2 pages

    CAMC Case 2 C2

    Uploaded by

    Skirata75
    1. Franklin Health uses responsibility accounting where each physician is responsible for generating a set level of revenue. Creating cost centers where physicians are also responsible for keeping costs below a target could be a better approach to improve overall profitability. 2. The variance analysis for family practice and internal medicine doctors should consider factors like the number of office hours worked, number of office visits, and revenue generated compared to targets. Lower than expected office hours and visits resulted in less revenue. 3. The percentage deviation from expected contribution will be calculated for each department using year-to-date and prorated budgets for 2004-05 and 2005-06.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    CAMC Case 2: Franklin Health

    Half-cohort C2: Answer sheet


    Team members present:
    Team members absent:

    Assignment: Using the details in the Case provided, please answer the following questions in
    this document. If you want to use tables from a spreadsheet keep the destination style. Do not
    paste as image or use scanned images.

    Questions:
    1. Franklin Health uses responsibility accounting and each physician is a revenue
    centre. This implies each physician is expected to generate a specific level of
    revenues. Discuss if creating a cost centre (each physician is responsible for
    keeping costs below a certain level) would be a better approach.
    2. Provide a variance analysis for the doctors in family practice and Internal
    medicine. Make sure you include all factors that can influence differences between
    the total revenue they were expected to generate and actually generated. Discuss.
    3. Calculate the % deviation from the expected contribution for each department. Use
    the YTD (year-to-date) budget for 2004-05 and the Prorated budget 2005-05.

    Condit Expected Actual Difference

    Number of office hours in May 128 80 -48


    Number of office visits in May 512 413 -99
    Revenue $17,920 $13,778 -$4,142

    Visit volume variance: (413-512)*35 = -3,465

    Fuson Expected Actual Difference

    Number of office hours in May 128 87 -41


    Number of office visits in May 512 242 -270
    Revenue $17,408 $8,543 -$8,865

    Visit volume variance: (242-512)*34 = -9,180


    Prior Expected Actual Difference
    Number of office hours in May 92 70 -22
    Number of office visits in May 368 207 -161
    Revenue $14,720 $7,721 -$6,999

    Visit volume variance: (207-368)*40 = -6,440

    Record Expected Actual Difference

    Number of office hours in May 92 68 -24


    Number of office visits in May 368 182 -186
    Revenue $12,512 $7,433 -$5,079

    Visit volume variance: (182-368)*34 = -6,324

    After computing the differences in office hours, office visits and revenue generated in
    May by Condit, Fuson, Prior and Record, we notice a global trend. For each provider, the
    difference between expected and actual office hours in May is always negative. The same
    conclusion can be drawn from office visits. Furthermore, the revenue generated by each
    provider is also always negative, thus generating an average loss of $6,271.25.

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