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Question 1. (35 points) Hattiesburg Clinic projected the following budget information for 2021.
Total FFS Visit Volume
100,000 visits
Payer Mix:
Blue Cross
60%
Highmark
40%
Reimbursement Rates:
Blue Cross
$30 per visit
Highmark
$25 per visit
Variable Costs
Resource Inputs:
Labor
50,000 total hours
Supplies
120,000 total units
Resource Input Prices:
Labor
$30 per hour
Supplies
$2.00 per unit
Fixed Costs (overhead, plant, and equipment)
$500,000
Question 2. (15 points)
Consider the following data for Lamar Hospital (in millions of dollars):
Static budget Flexible Budget. Actual Results
Revenues 4.6 4.7 4.4
Cost 4.1 4.1 4.3
Profits. 0.5 0.6 0.1

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