Question: 3. Utilize the data from the preceding problems to address questions 3a and 3b. Consider yourself in the role of a hospital administrator. The insurance
3. Utilize the data from the preceding problems to address questions 3a and 3b. Consider yourself in the role of a hospital administrator. The insurance company has proposed a capitated contract at the PMPM rate you calculated in question 3a. However, you're confident in your ability to manage utilization more effectively than the figures shown in the previous table suggest. You anticipate that the actual utilization will be 400 per 1,000 individuals. The total number of insured individuals is 24,500. Your cost per case is $1,200. (For this scenario, disregard factors such as marginal costs and contribution margins.) 3a. What is the hospital's total revenue from this contract? 3b. Would your hospital realize a profit on this contract? How much profit or loss would be realized
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