Question: I need help with the three questions listed at the end after the paragraph. ndamentals of Healthcare Finance FOR YOUR CONSIDERATION Cost Structure and Relevant

I need help with the three questions listed at the end after the paragraph.

ndamentals of Healthcare Finance FOR YOUR CONSIDERATION Cost Structure and Relevant Range In general, an organization's underlying cost structure is defined for a specified rele- vant range. For example, assume that Atlanta Clinic's underlying cost structure is given as follows: hasbair to goinmauili aids ovaal aw sion Total costs = Fixed costs + Total variable costs = $4,967,462 + ($28.18 x Number of visits). Assume that the expected number of visits next year is 75,000 and the relevant range for this cost structure is 70,000 to 80,000 visits. Now, assume that a new payer makes a proposal to the clinic that would increase next year's volume by 10,000 vis- its, which would increase the expected number of visits to 85,000. The financial staff presents you, the CEO, with an analysis of the costs under the new proposal that was calculated as follows: Total costs = $4,967,462 + ($28.18 x 85,000) bud ,smelov To a = $4,967,462 + $2,395,300 = $7,362,762. What is your initial reaction to the analysis? Is it valid or must it be redone? 85,000 visits? What variable in the underlying cost structure is most likely to change at a volume of
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