Which term describes costs that remain constant regardless of the patient's volume?

Study for the NAB Domain 2 Operations Test. Use flashcards and multiple choice questions, with hints and explanations. Get exam ready!

The term that describes costs that remain constant regardless of the patient volume is Fixed Costs. Fixed costs are expenses that do not fluctuate with the level of goods or services produced, meaning that they remain stable even if there is an increase or decrease in patient numbers. This category typically includes expenses such as rent, salaries of permanent staff, and equipment leases. These costs must be paid regardless of how many patients are treated, providing a predictable expense structure for healthcare operations.

Sunk costs, on the other hand, refer to expenses that have already been incurred and cannot be recovered. Variable costs change in direct relation to the volume of patients, increasing with more patients and decreasing with fewer. Direct costs are those that can be specifically attributed to a particular service or patient, such as medications or supplies used in treatment, and these can vary based on patient volume as well.

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