**SHOW YOUR WORK**

Based on the information below, assume that the only change in the original example data is that Blue Cross raises their discount to 20 percent. What price should be set? You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budgetary data is presented below:

Budgeted Procedures	$10,000
Budgeted Cost	$400,000
Desired Profit	$80,000

It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38.00 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below:

Payer	Volume%	Discount%
Blue Cross	20	4
Unity PPO	15	10
Kaiser	10	10
Self Pay	5	40
	50%