Describe the fundamental value of effective variance analysi

Describe the fundamental value of effective variance analysis and variance reporting in healthcare organizations.

Solution

Answer:

Variance analysis, also described as analysis of variance or ANOVA, involves assessing the difference between two figures. It is a tool applied to financial and operational data that aims to identify and determine the cause of the variance. In applied statistics, there are different forms of variance analysis. In project management, variance analysis helps maintain control over a project\'s expenses by monitoring planned versus actual costs. Effective variance analysis can help a company spot trends, issues, opportunities and threats to short-term or long-term success.

ANOVA is very useful in health care organizations as finding out the reason for the variance is very crucial in the healthcare companies that are very sensitive to the sudden changes and shocks.