1. Middleboro Community Hospital has been contacted by a regional employer to negotiate a contract for providing health services to a group of 50,000 employees. You have been asked to evaluate the terms of the contract and determine if the PMPM payment is acceptable.

   Category	Inpatient Days per 1,000 enrollees	Average Cost per Day
   Medical	387	$1,450
   Surgical	295	$2,400
   OB	68	$975
   Newborn	39	$875
   Other Pediatric	34	$750
   ICU/CCU	71	$3,650
   Psychological	18	$1,250
   Substance Abuse	36	$900

   Answer the following questions:

   1. Using the table provided, calculate the minimum PMPM that is acceptable to Middleboro based upon a 20% load factor (administrative costs and profit).
   2. The regional employer has proposed a PMPM amount of $165.00. Is this acceptable? Why or why not?
   3. What potential risk does Middleboro Community Hospital have in participating in the program?