Efficiency of a healthcare business operation is assessed by the operating margin ratio that divides net income by total revenues. Explain why total revenues are used instead of gross medical service revenues.
What will be an ideal response?
Gross medical service revenues are of little value in estimating financial health because most healthcare payments come from third parties, and actual payments from third parties are much less than the full charges (that are used to calculate gross medical services revenues). Using the latter would increase the denominator, decrease the ratio, and make the business appear less efficient that it is.
You might also like to view...
Which of the following can decrease the FEF 200-1200? I. Obstructive disorders II. Restrictive disorders III. Age
A. I and III only B. I, II, and III C. I only D. II and III only
One of the hopes of the international community with implementation of the ICD-10 is:
a. more effective combating of disease threats. b. better communication among medical communities. c. identification of disease hosts. d. identification of disease carriers.
What kind of impression do cool colors create in the reception area?
A. Active B. Volatile C. Discordant D. Energetic E. Harmonious
Which of the following information would you place in the "P" section when using SOAP charting?
A. Physician's examination B. Physician's diagnosis C. Patient's chief complaint D. Test results E. Patient education