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An HMO has just proposed an offer to promote your facility as the region's Center of Excellence for obstetrical deliveries. The HMO covers 7777700,000 lives

An HMO has just proposed an offer to promote your facility as the region's "Center of Excellence" for obstetrical deliveries. The HMO covers 7777700,000 lives in the community served by your facility. The HMO has provided the following information for your consideration: the hospital cost for a normal uncomplicated delivery is $1800 and for a complicated cesarean ddelivery is $3500. Furthermore, the annual rate per 100,000 lives for a normal uncomplicated delivery is 6.o while for a complicated Cesarean delivery is 1.5. The HMO proposes a capitated per member per month (PMPM) premium to the hospital to provide obstetrical services to their members. What would the break-even premium be? A. $0.01783 PMPM B. $0.01830 PMPM C. $0.01336 PMPM D. $0.016050PMPM E. none of the above

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