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PROVIDER COST-FINDING METHODS

LEARNING OBJECTIVES

• Identify three methods for estimating costs
• Calculate costs using the step-down method
• Calculate costs using activity-based costing
• Understand the major advantages and disadvantages of activity-based costing
Cost Object
Anything for which costs are being estimated, such as a population, a test, a visit, a patient, or a patient day.
Finding the costs to serve various populations (e.g., the elderly, Medicare patients, rehabilitation patients), to produce various goods and services, and to work with various payors (e.g., Medicaid, insurance companies) is an important activity for most health care providers. A cost object is anything for which costs are being estimated, such as a population, ...

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