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Dr. Smith is deciding on whether to open a new clinic. He estimates that the annual Fixed Overhead costs for the center will be
Dr. Smith is deciding on whether to open a new clinic. He estimates that the annual Fixed Overhead costs for the center will be $200,000. He also estimates that he will have $100,000 is fixed staffing costs. Dr. Smith's office manager has told him that his variable costs will be $15 per patient in staffing costs, plus an additional $5 per case in medical supplies. In studying the fee schedules of Medicare and Blue Cross, Dr. Smith feels that he will earn approximately $100 per case based on both the payer mix and types of patient visits he will be seeing. What is Dr. Smith's incremental profit per case?
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