Which statement describes the use of top-down forecasting in healthcare?

• A. Bottom-up uses unit-level projections.
• B. Both ignore unit data.
• C. Both assume constant prices.
• D. Top-down uses macro assumptions to project revenue and costs.

Answer: (D)

Top-down forecasting starts with the big-picture view of the market and health-system environment. It uses macro assumptions about overall demand for services, payer mix, reimbursement rates, and general price inflation to project total revenue and total costs for the organization. Once those totals are estimated, they can be allocated to departments or units based on shares, historical patterns, or strategic priorities. This approach contrasts with building projections from the ground up using unit-level data like volumes, service mix, and unit prices. The statement about top-down relying on macro assumptions to project revenue and costs captures the essence of the method, which is why it fits best.