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    Operating Margins and Health Maintenance Organization

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    1) Operating margins in your hospital have been consistently below national norms for the past 3 years. Discuss the factors that might have created this situation and the ways in which you might determine specific causes. Additionally, describe several items that are treated as expenses in the income statement but do not require any expenditure of cash in the present period.

    2) Your health maintenance organization is experiencing a critical shortage of funds. Using the statement of cash flows as a framework. for discussion, explain how you might attempt to reduce the need for additional funds. Additionally, your firm reported net income of $5,000,000, but the change in equity was only $3,000,000. What could account for the difference?

    Answers only need to be 3-4 sentences long.

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    Solution Preview

    1. The factors that may have caused this situation is higher operational costs due to lack of productivity, inefficiencies and wastage in day to day operations, higher salaries, etc. Another factor could be lower pricing being charged by the company due to ...

    Solution Summary

    Discusses operating margins in hospital and shortage of funds in health maintenance organization.