d$.$ How would the graphs change if the providers were operating in a discounted fee$-$for$-$service environment? In a capitated environment?

$5.$ Consider the data in the following exhibit for three independent healthcare organizations:

$\backslash$table$[[,$Revenues,$\backslash$table$[[$Total$],[$Variable Costs$]],\backslash$table$[[$Fixed$],[$Costs$]],\backslash$table$[[$Total$],[$Costs$]],$Profit$],[$a$.,$$$2,000,$$$1,400,?,$$$2,000,?$

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$166$ Fundamentals of Healthcare Finance

Furthermore, assume that the group expects to perform $7,500$ procedures in the coming year.

a$.$ Construct the group's base case projected P&L statement.

b$.$ What is the group's contribution margin? What is its breakeven point $($in number of procedures$)?$

c$.$ What volume is required to provide a pretax profit of $$100,000?$ A pretax profit of $$200,000?$

d$.$ Sketch out a CVP analysis graph depicting the base case situation.

e$.$ Now, assume that the practice contracts with one HMO for all $7,500$ procedures and the plan proposes a $20$ percent discount from charges. Answer questions $a,b,c,$ and $d$ again under these conditions.