HCA/270 Week Seven Checkpoint: Revenue Variance Analysis Calculate the revenue variance from Arcadias 2005 budget.

t. 1. Patient Revenue: 500 Budgeted Revenue: 550 = (-50) 2. Net Patient Revenue: 488 Budgeted Revenue: 536 (-48) 3. Total Operating Revenue: 568 Budgeted Revenue: 596 = (-28) Is the variance positive or negative? The variance figures listed are all a negative value indicating that less revenue or profit was brought in to the company than anticipated for that time period. Which is desirable, a positive or negative variance? Why? When considering revenue variance, you would want or desire a positive amount which would indicate more revenue or a profit was made for that period of time. When considering expense related variances, negative values are desirable which show lower than expected supply prices and smaller than expected usage of supplies and labor for improvement. What do you think are some of the possible causes for this variance? Possible causes for a negative variance amount could be that patient volume or census was actually lower than originally anticipated. Another cause could be the amount of money spent on staffing was more than normally paid for the patient volume due to increased wages caused by on-call staffing or overtime paid to staffing. It could also be due to an increased amount of rejected claims, an increased amount of unprocessed claims, or a high volume of claims not being paid in a timely fashion. How would you adjust Arcadias Hospital 2006 budget in light of your variance analysis? Explain your answers.I would lower the budgeted amount for the coming year by a certain percentage while at the same time trying to cut overhead costs by trying to avoid paying on-call or overtime wages as much as possible. I would also meet with the marketing team to address the issue on trying to increase patient volume. I would also review the processing time for claims, along with the amount of rejected and unprocessed claims. To improve on these numbers, I would I would have billing staff complete continuing education on how to improve the number of clean claims processed, reduce the number of rejected claims, how to improve upon the amount of time needed to process claims efficiently, and how to address unpaid claims with the insurance companies. I believe that by addressing some of the problems that may be occurring internally, the amount of revenue would increase.