ZHXX_Cost Structure.doc - Running head COST STRUCTURE 1...

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Running head: COST STRUCTURE 1 Cost Structure Name Institution Professor Course Date
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COST STRUCTURE 2 1. What cost structure (fixed vs. variable) is optimal for the practice? The optimal cost structure for the practice is the variable costs structure. This particular structure would enable the health practitioners to reduce their financial risk since they are basically reimbursed on a fee-for-service basis, which involves converting as many fixed costs as possible to variable costs. The practitioners will; therefore, be able to lower their risk if they adopt this cost structure since, as noted by (Oregon’s Office for Health Policy and Research, 2013), the fee- for-service system would subject the financial risk of offering health services to the insurers and purchasers but not the providers. The healthcare providers will only be subject to negligible financial risk given the fact that they are reimbursed on the grounds of the services offered.
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