Real-Life Math -- Solution
You can use the HMO's formula to determine your profit. One hundred
out of 2,000 members needed in-patient surgery:
100
/ 2,000 = 0.05
240 of 2,000 members need outpatient surgery.
240 /
2,000 = 0.12
If the HMO was paying you on this formula
this is what you would earn:
0.05 x $746 x 2,000 = $74,600
0.12
x $459 x 2,000 = $110,160
$74,600 + $110,160 = $184,760
The
HMO actually paid you $196,240, so you are $11,480 in the black. Good work!
The board gives you a $2,000 raise!
Tracking money -- both money spent
and money earned -- is a very important part of a hospital administrator's
job.
If your budget is cut by 5 percent, for example,
you might have to lay off staff. It's not a pleasant thing for any administrator
to do, but that's what hospital president and CEO Garth Pierce has been forced
to do a few times when budget amounts have been trimmed and hundreds of hospital
beds have been closed.
"That's what we have to do to save 5 percent,"
says Pierce.
Diane Lemon is a hospital administrator. She says math
is important in her work. She says hospital administrators use math when they
read through statistics, draw up grant proposal and put together budgets.
"Usually, you have a financial person, an accountant who will do it. But again,
you need to have basic math skills."