Suppose you are a member of the senior leadership team for this hospital. Based on the elements of contribution margin presented for each service, which service line(s) would you recommend? Why would you choose the particular service(s)? What would you estimate as the incremental impact for 10% growth in your chosen service line? Incremental impact = (incremental revenue incremental variable cost)

Service Line Report - Monthly INPATIENT CASES Cardiology General Medical General Surgery # Cases 411 369 538 Net Revenue $ 2,521,485 $ 1,607,364 $ $ 4,646,706 $ Avg. Net per Case . $ 6,135 5 4,356 s 8,637 S Neurology 125 526,875 $ 4,215 S Orthopedic 236 2,105,828 $ 8,923 $ Pulmonary 453 2,648,691 $ 5,847 $ Tota! 2,132 14,056,949 6,593 DIRECT - Variable Costs Staffing Supplies Avg. Variable Cost/Case Contribution Margin Avg Contribution/Case $ $ $ 1,039,745 $ 586,908 $ 3,957.79 $ 905,942 $ 332,100 $ 3,355.13 $ 1,545,597 $ 1,263,224 $ 5,220.86 $ 1,837,885 $ 3,416.14 $ 293,227 $ 100,000 $ 3,145.82 $ 133,648 $ 1,069.18 S 364,714 $ 1,227,200 $ 6,745.40 $ 513,914 $ 2,177.60 $ 1,159,425 $ 345,639 $ 3,322.44 $ 5,308,650 3,855,071 4,298.18 $ $ 894,832 $ 2,177.21 $ 369,322 $ 1,000.87 S 1,143,627 $ 2,524.56 $ 4,893,228 2,295.14 DIRECT - Fixed Costs Avg Personnel Other Fixed Expenses Avg. Direct Fixed Cost/Case . $ $ $ 120,000 $ 578,330 $ 1,699.10 $ 80,000 $ 519,231 $ 1,623.93 $ 150,000 $ 757,036 $ 1,685.94 $ 110,000 $ 175,891 $ 2,287.13 $ 140,000 $ 332,083 $ 2,000.35 $ 130,000 $ 637,430 $ 1,694.11 $ 730,000$ 342 3,000,000 $1,407 1,749.53 INDIRECT - Fixed Costs (Overhead) Administration & HR Building Depreciation $ 167,932 11,000 11,066 151,949 15,000 232,417 25,000 55,596 9,000 Allocated Costs 850,000 by variable FTES) 100,000 (by square footage) 54,843 21,000 187,262 19,000 Total Cost Avg Total Cost/Case $ $ 2,503,915 $ 6,092.25 $ 2,004,222 $ 5,431.50 $ 3,973,274 $ 7,385.27 S 743,715 $ 5,949.72 s 2,139,840 $ 9,067.12 S 2,478,756 $ 5,471.87 S 13,843,721 6,493.30 Net Income Avg Net Income/Case $ $ 17,570 $ 42.75 $ (396,858) $ (1,075.50) $ 673,432 $ 1,251.73 $ (216,840) $ (1,734.72) $ (34,012) $ (144.12) $ 169,935 $ 375.13 $ 213,228 100.01 23.06 159,768 Variable Costs average wk hours/patient day total hours hourly rate - direct variable staff FTES - direct variable benefit factor supply cost per 24 31,565 27 15.18 18 28,561 26 13.73 29 43,686 29 21.00 22 10,450 23 5.02 28 10,308 29 4.96 21 35,198 27 16.92 76.81 1.22 1,808 $ 1,428 $ 900 $ 2,348 $ 800 $ 5,200 $ 763 $