What are important cost justification formulas to know when meeting with management to provide athletic training services at an occupational company?
A. Cost Avoidance 1. A cost avoidance is the reduction or elimination of a new cost that would have otherwise occurred. 2. Cost avoidance can be calculated based on a number of factors, such as per treatment, per program, per hour, per month, and per year among many others. 3. There are two components used to calculate cost avoidance; one is the cost of service or program charged by similar service providers in the same area, and the other is the total number of services or programs provided. 4. The general formula for monthly cost avoidance is: Monthly cost avoidance = (Customary and accepted cost of program/services) X (Number of times programs/services provided) 5. Advantages A. simple B. easy to compute C. easy to understand D. Very popular 6. Disadvantages A. Limited applicability 1. and because of that it is not (see B below) B. Not well accepted 1. Bean counters like it, but dont put a lot of value into it C. Not a true reflection of all the benefits associated with on-site reha
