Questions about hospital costs, income statements and controllership

Start with the result and compare it with budget and with the same period last year. Then find the line that explains the difference (revenue, denials, variable cost, payroll, fixed cost), the cost center where the deviation concentrates and whether the cause is volume, price or payer mix. The walkthrough is in the article how to analyze a hospital income statement.

Line by line in the income statement and by cost center, in amount and percentage, always on the same accrual basis. Separate volume variances (more or less was delivered) from price or consumption variances. See budget vs. actual.

It is the unit that accumulates costs for analysis, such as the ICU, surgical center, emergency room, laundry or billing. Cost centers divide into productive (revenue-generating), support and administrative. See how to track costs by department.

Variable cost changes with patient volume, such as supplies, drugs and volume-based physician fees. Fixed cost does not change in the short term, such as structure, fixed payroll and contracts. The split is the basis of contribution margin.

It is revenue minus variable costs and deductions. It shows how much each payer, specialty or procedure leaves to cover the hospital's fixed cost. The full definition is in the glossary.

Add the actuals to date and project the remaining months from the recent trend, the budget and known events (price adjustments, new services, seasonality). In Clic Health, the management income statement includes a forecast simulation of the coming months.