She is an Internal Medicine doctor in an office by herself, and participates with Medicare, Medicaid and most major insurance plans. She has 3,000 charts of which 2,000 are active patients (seen at least once/ year) but she knows she could handle about 30% more. Most of her patients are healthy and rarely require hospitalization, but when they do she is the attending and also bills for hospitalization services. Her practice financial profile looks like she could use some more patients: Annual patient visits 3,120 Revenue from visits $280,800 Revenue from hospitalization $74,880 Office rent $72,000 Office manager salary $50,000 Two support staff $70,000 Benefits $25,000 Malpractice insurance $22,000 Supplies, advertising, other $20,000 Net profit for her salary $96,680 A small HMO has approached her with a business deal. She currently doesnt have any of their patients and they offer to pay her $40 PMPM (per member per month) to take care of 200 of their enrollees. There are no risk pools to consider, but she will have to refer to the plans specialists and admit (when needed) to the hospitals in the plan network. She knows this is a low offer but they cannot afford more as they are struggling to build volume. Your physician friend is anxious to get new patients, but also aware that some of her existing fee for service patients might flip to the HMO as they are also the least expensive in town. Shes afraid she could have as many as 50 patients change coverage, so shed get the PMPM instead of her normal fee. At the same time she believes she could handle the additional 200 patients by adding only one more support staff. She asks for your opinion and reasoning. What would you advise her, and why? Use at least one financial argument to justify your advice.