Define variance analysis and its value to corazon

Reference no: EM133518848 , Length: word count:600

Assignment: Assessing and Sharing Financial Risk

Analyze the organization's options for risk bearing.

For this assignment, you will complete the Risk-Bearing Options worksheet (Assignment 2) to assess readiness for risk bearing and to determine what level of risk Corazon y Alma should bear. It will be submitted with Assignments 1 and 3 (Task 1).

For Assignment 2, do the following:

Review the financial information provided in the Corazon y Alma Financial Data spreadsheet and supporting learning references.

Complete the Risk-Bearing Options worksheet (Assignment 2). This worksheet will guide you in your analysis of Corazon y Alma's potential options for risk-bearing.

Risk-Bearing Options Worksheet (Assignment 2)

Instructions:

Closely examine all tabs and related information included in the "Corazon y Alma Health Financial Data" document. Also refer to Chapter 8 of Healthcare Finance: An Introduction to Accounting and Financial Management.

A. Identify key areas of risk for Corazon y Alma Health based on analysis of their financial data by addressing the following:

Question 1. Define variance analysis and its value to Corazon y Alma Health relative to risk identification if implementing a new service line.

Question 2. Explain the difference between a static budget and a flexible budget. Describe which type of budget will need to be developed to support the proposed new service line.

Question 3. Discuss which financial data will be analyzed in the measurement ofeach of thefollowing variances when applied to the Corazon y Alma Health:

a. profit variance
b. revenue variance
c. cost variance

B. Discuss several risk-bearing payment modelsthatCorazon y Alma Health should potentially consider that are based on your prior analysis from the population needs' assessment and variance analysis.

Consider referencing learning resources located in the course, including options discussed from the following:
- "From Volume To Value: Better Ways To Pay For Health Care" by Harold Miller, published in Health Affairs as a primer to different payment models
- Milliman Healthcare Reform Briefing Paper: "Look before you leap: Shared riskprograms and considerations for health systems"

C. Recommend which payment model Corazon y Alma Health should adopt to support implementation of the proposed new service line. Provide an explanation based on the analysis.

Reference no: EM133518848

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