I need to show my work on this, like formulas used if any...

Group Number: Group Project i Mini Case I Payments to Providers All America HMO pays its primary care physicians (PCPs) by capitation. but a percentage of the total capitated amount is withheld and distributed to individual PCPs based on aggregate PCPPerformance. The financial goal of importance to All America is to achieve total actual specialty care and hospital costs less than budgeted. To this end, All America provides a financial incentive to its PCPsto encourage careful referral of patients to these services.The financial incentive is based on the referral gain or loss, defined as the difference between the actual and budgeted specialty care and hospital cost. More specifically, All America uses the following risk-sharing rules: If there is a total referral zain. then all orthe total withhold is returned to the PCPs If a total referral loss withhold, then the difference (withhold-referral loss)is returned to the PCPs based on the number of patients per PCP If a total referral loss >total nithhold. then none of the withhold is returned to the PCPs Last year, All America's capitation payment to the PCPs was S20 PMPM, but 15 percent of this amount was placed into the PCPrisk pool. The budgeted amount for specialty and hospital costs was S50 PMPM. At the end of the year, the following data were recorded for the four All America PCPs: Dr Smith Dr Barney Dr Wells Dr Fargo patients Number of 1.600 Actual referral costs $504.000 $470.000 S590.000 S880.000 a. Calculate the total compensation of each PCP at the end of the year. b. Was each of the PCPs fairly compensated? What incentives does this single risk pool based on aggregate PCP perform present to the individual PCPs? What should be investigated to assess ance the fairness of the PCP compensation? ANSWER PCP capitation payment PMPM PCP withhold rate Specialty hospital budget PMPM Number of months per year Dr Smith Dr Barney Dr Wells Dr Fargo Total Number of patients IJ600 Annual capitation payment Withhold nitial allocation Budgeted referral costs Actual referral costs $470.000 Referral gain (loss) Withhold returned Total compensation