1. Two medical organizations have recently examined their cost structures. The first group is a radiology practice with a significant investment in diagnostic imaging equipment. The second group is a single-specialty pediatric practice. The cost analysis reveals the following distribution:

Radiology group Pediatric group

Fixed cost 60%	Fixed cost 20%
Variable cost 20%	Variable cost 80%
Indirect cost 10%	Indirect cost 30%

Explain the implications of the differing cost structures of each medical group in terms of contracting with managed care organizations.