One often overlooked feature of the CostFlex ABC system is the What-If Analysis that allows exploring different economic scenarios without changing the status of the costing model.
This function is particularly useful for hospital CEO’s because they can quickly see how different management decisions will affect profits.
To execute a What-If analysis, the entire contents of the CostFlex folder on disk is copied to another folder and set up as a separate hospital.
Using this new hospital, any number of variables can be changed to be analyzed.
Once the changes are made, costs are rerun for the past year or so for this separate hospital. Use of the CostFlex standard reports will show the changes in profits and contribution margins at the enterprise level and at all service line levels. If activity volumes are increased and staff remains static, changes in overheads (productivity) will be shown as well.