Question
Use the following information for Questions 13, 14, and 15 You have been asked to establish a pricing structure for radiology on a per-procedure basis.
Use the following information for Questions 13, 14, and 15
You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budgetary data is presented below:
Budgeted Procedures20,000
Budgeted Cost$800,000
Desired Profit$160,000
It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38.00 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below:
PayerVolume %Discount %
Blue Cross204
Unity PPO1510
Kaiser1010
Self Pay540
50%
Question # 13 (10 points)
What rate must be set to generate the required $160,000 in profit in the preceding example?
Question # 14 (10 points)
If the forecasted volume increased to 24,000 procedures and budgeted costs increased to $880,000, while all other variables remained constant, what price should be established?
Question # 15 (10 points)
Assume that the only change in the original example data is that Blue Cross raises their discount to 20 percent. What price should be set?
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