Question: You represent an integrated delivery system that is in negotiations with a health plan for a capitated rate to cover all hospital and physians serves

You represent an integrated delivery system that is in negotiations with a health plan for a capitated rate to cover all hospital and physians serves for a defined population. The following utilization data have been given to you,which detail last year's usage rates. You have included in this table your expected costs for selected services. Using the data presented calculate a required break even rate for this contract assuming that you need 15% retention factor to cover administrative cost.

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