Rate Setting & Break Even

Internal Factor- (C.E.R.I.T.A)

Charity, Education, Research, Investment, Technology, Allocation/Alternative

External Factor- (R.E.C.O.R.D)

Record-Performance, Equity, Competition, Organization, Requirement, Decision

TFR= Total Financial Requirement

FOR= Full Operating Requirement

OFR= Other Financial Requirement

TFR= FOR+ OFR

PPP= TFR-nPPP

(TFR/wu) +(FOR/wu)+(OFR/u)= (PPP'/u') <-Price Paying Patient After discount

Break Event Analysis- Why? - (SE.R~.BU)

Setting price, Reimbursement, Negotiation, Budgeting (H-Profit, L-Cost)

Cost Control - Why?- (A.B.C.D=free)

Administrative no-role, Business not-realistic, Cost too-cheap, Decision some-unfavorable,

Free services-compulsory.

Sine-qua-non of Hospital Survival: (CERITA + RECORD)

Charity, Education, Research, Investment, Technology, Allocation/Alternative

Record-Performance, Equity, Competition, Organization, Requirement, Decision

TC= Total Cost, FC= Fix Cost, VC= Variable Cost, Q=quantity, BEQ= Break Event Quantity, BER= Break Event Revenue, P= Price, TR= Total Revenue, TC= Total cost

1) TC= TFC+TVC

2) TC= TFC+ VCU x Q

3) TVC= VCU x Q

4) VCU= C/V

5) VCU and FC always constant

6) BEQ = TFC/ (P-VCU)

7) BER= BEQ x P

8) TT= TR-TC

9) TR= P x Q

10) Break event happen when TR= TC