Answered step by step
Verified Expert Solution
Question
1 Approved Answer
5.4. General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services: Fixed costs Variable cost per procedure Charge
5.4. General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services: Fixed costs Variable cost per procedure Charge (revenue) per procedure $10,00,000 200 1,000 The hospital expects to have a patient load of 15,000 inpatient days next year. a. Construct the hospital's base case projected P&L statement. b. What is the hospital's accounting breakeven point? c. What volume is required to produce a profit of $1,000,000? A profit of $500,000? d. Now assume that 20 percent of the hospital's inpatient days come from a managed care plan that wants a 25 percent discount from charges. If the hospital does not agree, assume it will lose the inpatient days to another provider. Should the hospital agree to the discount proposal?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started