Cost-shifting Problem

Assume your organization has 100 patients analyzed in the following manner:

15 Medicare patients, who pay $2,000 per diagnosis

25 Medicaid patients, who pay $1,800 per diagnosis

20 managed care patients, who pay charges minus a 20% discount

10 managed care patients, who pay charges minus a 25% discount

10 private pay insurance patients, who pay charges

10 charity care patients, who pay nothing

10 bad debt patients, who pay nothing

Your organization's average cost per patient is $2,000. Calculate the charge necessary to recover your cost.

Cost-cutting Problem

Using the data from the above problem on cost-shifting, assume those who pay charges will allow a maximum charge of $2,100. Calculate the charge necessary to recover your cost.