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Problem 2 Assume that a gastroenterologist provides three levels of examination: I, II and III, that vary in depth and complexity. An RVU analysis
Problem 2 Assume that a gastroenterologist provides three levels of examination: I, II and III, that vary in depth and complexity. An RVU analysis indicates that a Level I examination requires 14 RVUS, a Level II exam 28 RVUS, and a Level III exam 42 RVUS. The total costs to run the practice, including a diagnostic laboratory, amount to $700,000 annually, and the numbers of examinations administered annually are 3,360 Level I, 1,120 Level II 560 Level III. a. Using RVU methodology, what is the estimated cost per type of examination? b. If the goal of the practice is to earn 25 percent profit margin on each examination, how should the examinations be priced? Hint: Use table(s) to organize your data/solutions.
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