Question: Dr Smith is deciding on whether to open a new clinic. He estimates that the annual Fixed Overhead costs for the center will be $200,000

Dr Smith is deciding on whether to open a new clinic. He estimates that the annual Fixed Overhead costs for the center will be $200,000 . He also estimates that he will have $100,000 is fixed staffing costs. Smith's office manager has told him that his variable costs will be $15 per patient in staffing costsplus an additional $5 per case in medical supplies. In studying the fee schedules of Medicare and Blue Cross , Dr. Smith feels that he will earn approximately $100 per case based on both the payer mix and types of patient visits he will be seeing What is Dr. Smith's incremental profit per case ? Based on the information given what volume of cases does Smith need to have in order to break-even?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!