Determine the amount of incremental profit that would be realized with a 10% across-the-board rate increase at Thunderbird Hospital. Thunderbird’s present payment composition is 80% fixed fee and 20% charges or discounted charges. Present operating income is defined below:

less less Gross patient revenue Contractual allowances Net patient revenue Expenses Operating income

$100,000,000 40,000,000

$60,000,000 59,000,000

$1,000,000