Case 4 Assignment Example | Topics and Well Written Essays - 250 words

Case 4 - Assignment ExampleThe idea here is to see whether the clinic can inflate its way to lucrativeness even if volume remains at its current level.)4. Suppose you just found out that the $3,215 monthly malpractice insurance charge is based on an write up storage allocation scheme that divides the hospitals total annual malpractice insurance costs by the total annual number of inpatient days and outpatient visits to discover a per-episode charge. Then, the per-episode tax is multiplied by each departments projected number of patient days or outpatient visits to obtain each departments malpractice cost allocation. What impact does this allocation scheme have on the clinics true (cash) profitability? (No calculations are necessary.)If the malpractice insurance charge is based on the hospitals numbers of patient, and so the clinic is paying too much. The clinic has fewer patients, so the insurance needs to be reduced to reflect the number of actual patient visits the clinic see s daily.5. Does the clinic have any value to the hospital beyond that considered by the numerical analysis just conducted? Do the actions by Baptist infirmary have any bearing on the final close regarding the clinic?The clinic does impact the hospital. If the hospital doctors see patients at the clinic, then patients from the hospital go to the clinic. It would also be a bad practice if the hospital is discharging patients to doctors in the Baptist Hospital clinic. The clinic is an extension of the hospital. Whatever the clinic loses, the hospital makes up in volume, procedures, and other means. Baptist Hospital should not have any bearing on the decision. When the other clinics were opened, this clinic had the same volume. totally if the volume of patients drop drastically should the clinic be close.I would recommend that the clinic raise their costs to $1 per patient. That would have the clinic breaking even. It is not cost