Please help me with question 17 (a, b, c) from Chapter 9

Financial Management of Health Care Organizations: An Introduction to Fundamental Tools, Concepts and Applications, 5th Edition

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17 Add-or-drop decision. The Ancome County Health Department is considering using 300 square feet of excess office space to provide a clinic for Healthchek visits. These visits are reim- bursed at $70 under a Medicaid program. Variable costs per visit are $40, and providing the ser- vice requires an additional physician assistant and nurse with prorated salaries of $95,000 and $75,000, respectively. The state has mandated efforts to increase the utilization of Medicaid eligibility, so the Department of Social Services is conducting interventions to increase eligibil- ity awareness in the community. As a result, the health department expects 14,000 Healthchek visits in the coming year. Nonavoidable overhead costs for the health department are $300,000 per year and will be allocated to each program based on its proportional share of the health department's total office space of 2,700 square feet. What are the total contribution margin and total product margin for a Healthchek visit? b. Considering the total product margin, should the health department provide the service? Are there any other considerations that should be taken into account when making this decision? a. c. 17 Add-or-drop decision. The Ancome County Health Department is considering using 300 square feet of excess office space to provide a clinic for Healthchek visits. These visits are reim- bursed at $70 under a Medicaid program. Variable costs per visit are $40, and providing the ser- vice requires an additional physician assistant and nurse with prorated salaries of $95,000 and $75,000, respectively. The state has mandated efforts to increase the utilization of Medicaid eligibility, so the Department of Social Services is conducting interventions to increase eligibil- ity awareness in the community. As a result, the health department expects 14,000 Healthchek visits in the coming year. Nonavoidable overhead costs for the health department are $300,000 per year and will be allocated to each program based on its proportional share of the health department's total office space of 2,700 square feet. What are the total contribution margin and total product margin for a Healthchek visit? b. Considering the total product margin, should the health department provide the service? Are there any other considerations that should be taken into account when making this decision? a. c