Benchmarking for Decision-Making
Discuss the following example:
Your nursing home defines output as a patient day. The present volume is 18,000 patient days. The average cost per day is $95.00. Present revenues and costs are presented below.
What is the breakeven inpatient days for this nursing home, assuming no profit is required? If volume goes up 10 percent to 28,600 patient days and payer mix is unchanged, what will net income be? Respond to the following questions:
Calculate the results.
How is understanding the breakeven point helpful for a manager in everyday operations management?
How can Excel be used to automate the calculation process?
What are some of the variables that can be changed in order to alter the breakeven point?
Discuss the breakeven analysis and question responses with at least 2 of your cohort colleagues.
