(CO 3) Estimate the total variable cost (i.e., including both routine and ancillary) per MSDRG 505 using the departmental cost/charge ratios and variable cost percentages. (Your answer might be slightly different due to rounding. Pick the closest.) Your hospital has been approached by a major HMO to perform all their MSDRG 505 cases (foot surgeries). They have offered a flat payment of $8,000 per case. You have reviewed your charges for MSDRG 505 during the last year and found the following profile: Average Charge: $11,300 Average LOS: 4.5 Days

		Cost/Charge	Variable Cost %
Routine Charge	$3,200	0.75	65
Operating Room	1,850	0.70	80
Anesthesiology	210	0.70	75
Lab	575	0.65	40
Radiology	275	0.65	50
Medical Supplies	3,220	0.60	85
Pharmacy	955	0.55	85
Other Ancillary	1,015	0.75	55
Total Ancillary	$8,100	0.70	75

WITH SOLUTION