Middleboro Community Hospital has been contacted by a regional employer to negotiate a contract for providing health
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Question:
Middleboro Community Hospital has been contacted by a regional employer to negotiate a contract for providing health services to a group of 50,000 employees. You have been asked to evaluate the terms of the contract and determine if the PMPM payment is acceptable.
| Category | Inpatient Days per 1,000 enrollees | Average Cost per Day |
| Medical | 387 | $1,450 |
| Surgical | 295 | $2,400 |
| OB | 68 | $975 |
| Newborn | 39 | $875 |
| Other Pediatric | 34 | $750 |
| ICU/CCU | 71 | $3,650 |
| Psychological | 18 | $1,250 |
| Substance Abuse | 36 | $900 |
Answer the following question:
- Using the table provided, calculate the minimum PMPM (Per Member Per Month) that is acceptable to Middleboro based upon a 20% load factor (administrative costs and profit).
Expert Answer:
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