Grandview Clinic has fixed costs of $2 million and an average variable cost rate of $15 per visit. Its sole payer, an HMO, has proposed an annual capitation payment of $150 for each of its 20,000 members. Past experience indicates the population served will average two visits per year.

Sketch two CVP analysis graphs for the clinic - one with numbers of visits on the x-axis and one with numbers of members on the x-axis. Then, discuss how the difference in the member visits under capitation as the x-axis line versus the member visits line not under capitation as the x-axis line would be different.