Question
The question correlates to #4 to the attached image.
Dr. Edwards is a surgeon who operates on patients in two different DRGs. DRG A and DKG B. Dr. Edwards has been pressing the hospital for more perks. He claims the hospital cannot afford to lose him now that lie has become so cost-efficient. As evidence of his improved efficiency, he points out that in March, he operated on 13 patients. The total cost of treating the patients was $97,000 In April, he operated on 13 patients. The total cost of treating the patients was $92.700 According to Dr. Edwards. he has generated a total cost savings of $4,300. Although Dr Edwards admits that his patient mix did change somewhat from March to April he is sure the case mix change was not what accounted for the bulk of the cost decrease for the patients he treated. Your investigation determines that in March, he treated S DRG A patients with an average cost of $4,200 and ft DRG B patients with an average cost of $9,500. In April he treated 6 DRG A patients wild 7 DRG B patients. Costs in April for Dr. Edward patients were $4,600 for DRG A and $9,300 for DRG B. Although the April cost for DRG A patients had, risen Dr.Edwards points out that costs for the higher volume, higher cost DRG B patients had fallen. Use the Physician cost variance approach to develop a case-mix variance and a cost variance so we can better understand the impact of the charges in Dr.Edwards practice from March to April what other information would be of interest in this particular case?
Explanation / Answer
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