Assume that Valley Forge Hospital has only the following three payer groups: Number of Average revenue Variable
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Assume that Valley Forge Hospital has only the following three payer groups: Number of Average revenue Variable cost Payer admissions per admission per admission PennCare 1,000 $5,000 $3,000 Medicare 4,000 $4,500 $4,000 Commercial 8,000 $7,000 $2,500 The hospital’s fixed costs are $38 million.
a. What is the hospital’s net income?
b. Assume that half of the 100,000 covered lives in the commercial payer group will be moved into a capitated plan. All utilization and cost data remain the same. What PMPM rate will the hospital have to charge to retain its part a net income?
Related Book For
Financial accounting
ISBN: 978-0132751124
9th edition
Authors: Walter T. Harrison Jr., Charles T. Horngren, C. William Thom
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