1. Using only the information provided in Exhibit 1, explain why further analysis of physician visits may be needed. Compare the profitability of hospital and surgical services to physician services, using the allocation of revenue that was given. Show the breakdown of the $260 premium using a pie chart. Does the allocation of the $260 per employee per month payment across the types of health care services seem reasonable, given the past two months utilization?

Exhibit 1 Monthly Report of Health Care Utilization Total Costs Incurred - Sparks Interactive, Inc. Number of members, July 31, 2006: 4129 Number of members, August 31, 2006: 4137