Question
Fixed Costs $10,000,000 Variable cost per patient day$200 Charge per patient day$1000 Projected annual patient days15,000 Category/Volume Accept Total revenues Total variable cost Total contribution
Fixed Costs $10,000,000
Variable cost per patient day$200
Charge per patient day$1000
Projected annual patient days15,000
Category/Volume Accept
Total revenues
Total variable cost
Total contribution margin
Total fixed costs
Profit/(loss)
b. As a follow-up, consider that an MCO has 20% of the hospital's impatient days and for the up-coming contract year, the MCO wants a 25% discount from charges.
Column C in the above table develop the "Accept" the MCO's proposal.
Should the hospital accept the MCO contract?
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Quantitative Investment Analysis
Authors: Richard A. DeFusco, Dennis W. McLeavey, Jerald E. Pinto, David E. Runkle
3rd edition
111910422X, 978-1119104544, 1119104548, 978-1119104223
