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- Contents
- Intro
- Objectives
- Why Do This
HCET Home > On-line Training > Money Matters > Module I: How Much Does It Cost Us?
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Money Matters Module I: How Much Does It Cost Us?
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Contents of Module I
- Introduction (below)
- The Cost Center Report
- Steps to Developing Cost Based Fees
1-4 are covered, 5-8 covered in module II- Identify the functional cost center areas.
- Identify services provided in each cost center.
- Collect cost data and allocate costs to each functional cost center.
- Allocation of overhead costs to functional cost centers.
- References
1. Introduction
How Much Does it Cost Us?
Knowing the cost to provide a service is an important business practice. In this era of escalating costs and shrinking federal and state support, it is essential for family planning providers to collect financial information that will provide them with the knowledge of the real costs of doing business. This information should help to develop, implement and analyze the efficiency of their operations and assist them in controlling costs. Only agencies with a sound financial management plan and a complete knowledge of the costs of doing business will remain financially viable.
In addition, federal regulations require that each family planning project have a schedule of fees for the services provided. Charges must be based on a cost analysis of all services provided by the project. Each program is expected to develop realistic fees that reflect the cost of operation, yet are competitive to the local market. A schedule of discounts is required for individuals with family incomes between 101% and 250% of the Federal poverty level. This must have sufficient proportional increments so that inability to pay is never a barrier to service. The discounts are based on income, family size, and ability to pay.
Objectives
In this section, you will learn how to conduct a time study to determine your clinic’s direct and indirect costs. The objectives for this session are to:
- Define and apply the methodology for doing cost analysis
- Demonstrate an ability to allocate costs into agreed upon cost centers
- Identify how to complete the time study
- State how to gather the data needed to complete the cost sheets
Why are we doing this?
- To provide information to help your program know the cost of providing services.
- To assist agencies in negotiating rates with various rate payers.
- To help you know what it really costs to provide services.
- To help you set appropriate fees.
Knowing what it costs to provide a service is an important business practice.
This knowledge allows you to:
- Develop, implement and analyze efficiencies
- Control costs
Bottom line: It is GOOD business!
