Resource: Ch. 14 of Health Care Finance
Complete the following table by writing responses to the questions. Cite the sources in the text and list them at the bottom of the table.
What criterion must be met for true comparability?| True comparability needs to meet three criteria: consistency, verification and unit measurement. (Baker & Baker, 2012)| What elements of consistency should be considered? Provide an example. | The elements of consistency that should be considered are: Time periods, these periods of time need to be consistent, do not compare six months to twelve months. Consistent methodology, this means to use the same method from the beginning of the year to the end of the year. A good example of something that should have consistent methodology with inventory. The final element is inflation factors. If comparing data for multiple years inflation should be taken into consideration to the goods and services that result in a rise in the general price. (Baker & Baker, 2012)| What is the manager’s responsibility in comparing data?| It is the manager’s responsibility to recall and apply the element of consistency because this data will be used in decision making for the organization. If the data is not comparable costly financial decisions will be made for the future. (Baker & Baker, 2012)| What are the four common uses of comparative data? | The four common uses for comparative data are: compare the current expenses to the current budget, compare actual expenses to prior periods within the organization, compare to other organizations and to compare organization to the industry standards.| What is meant by standardized data?| Standardizing aids in the comparability of the data. (Baker & Baker, 2012)|
Baker, J. J., & Baker, R.W. (2012). Healthcare Finance (3rd ed.)