Scenario $2$

Next year, Friend Healthcare Organization will serve $250,000$ patients analyzed in the following manner:

$30\%$ Medicare patients, who pay $$1000$ per diagnosis;

$40\%$ Medicaid patients, who pay $$800$ per diagnosis;

$10\%$ managed care patients, who pay charges minus a $20\%$ discount;

$5\%$ managed care patients, who pay charges minus a $15\%$ discount;

$3\%$ private insurance patients, who pay charges

$5\%$ charity care patients, who pay nothing

$7\%$ bad debt patients, who pay nothing

Next year, Friend's costs will be $$1,000$ per patient.

Question $3.$ Calculate the charge necessary to recover Friend's costs.

Question $4.$ Using same scenario, assume that those payers that pay charges, or charges minus a discount, limit Friend's charges to $$1,150$ per patient. Calculate the amount of costs that Friend will need to cut, or cover with additional revenues, to break even $($realize no profit or loss$).$How to solve