Both service fees and capital are discussed in this module. These methods can be analyzed using cost volume profit analysis. In this discussion, assume the following:

A new Managed Care Organization (MCO) is preparing to bid to service 1,000 employees of ABC Manufacturing who make an average of 3 medical visits per year.

MCO can appoint one doctor for 350,000 SAR (annually) or a Registered Nurse can be appointed for 150,000 SAR (annually) with a doctor attending one day per week.

A doctor can see 4,500 patients annually.

The nurse is able to sponsor 2,000 ABC medical visits (with the ability to see another 1,000) but she needs a doctor for another 1,000 ABC visits.

The MCO has to decide how much the ABC will cost to offer to the business.

Use this example to discuss either the fee-for-service method or the capital method using fixed cost, variable cost, total cost, revenue, loss, profit, and even the break-even point for this healthcare organization. Your answer should be both quantitative and qualitative in nature.

Be sure to support your statements with logic and argument, citing all of the sources you use. Post your initial response early and check back often to continue the discussion.

References must be from the last 5 years and do not accept references earlier than this