use question 5.6 to answer b &c

Fill in the missing data indicated by question marks. 5.6 Assume that a radiology group practice has the following cost structure: $500,000 Fixed costs Variable cost per procedure Charge (revenue) per procedure 25 100 an 5.9 Grandview Clinic has fixed costs of $2 million and an average variable cost rate of $15 per visit. Its sole payer, an HMO, has proposed an annual capitation payment of $150 for each of its 20,000 members. Past experience indicates that the population served will average two visits per year. a. Construct the base case projected P&L statement on the contract. b. Sketch two CVP analysis graphs for the clinic-one with number of visits on the x-axis, and one with number of members on the x-axis. Compare and contrast these graphs with the one in problem 5.6, part d. c. What is the clinic's per-visit contribution margin on the contract? How does this value compare with the value in problem 5.6, part b? d. What profit gain can be realized if the clinic can lower per-member utilization to 1.8 visits? E Swipe to turn pages => 149 Reader Contents Notebook Bookmarks