VIP-MD is a health maintenance organization (HMO) located in North Carolina. Unlike the traditional fee-for- service model that determines the payment according to the actual services used or costs incurred, VIP-MD receives a fixed, prepaid amount from subscribers. The per member, per month rate (PMPM) is determined by estimating the health care cost per enrollee within a geographic location. The average health care coverage in North Carolina costs $367 per month, which is the same amount irrespective of the subscriber's age. Because individuals are demanding quality care at reasonable rates, VIP-MD must contain its costs to remain competitive. A major competitor, National Physicians, entered the North Carolina market early in the current year with a monthly premium of $324. VIP-MD wants to maintain its current market penetration and hopes to increase its enrollees in the current year. The latest data on the number of enrollees and the associated costs follow: Age 1-4 5-14 15-19 20-24 25-34 35-44 45-54 55-64 65-74 75-84 85 years and older Enrollment in Current Year 45,588 82,356 95,773 66,146 133, 396 166,776 85,396 99,124 156,188 67,795 23,399 1,021,937 Projected Enrollment Next Year 48,877 84,563 95,787 67,782 132, 454 175, 346 90,789 101,823 161,459 72,365 26,749 1,057,994 Average Monthly Cost in Current Year $ 11,147,772 10,059,532 8,436,724 9,539, 324 26,432, 108 38,882,008 22,741,836 28,691,612 49,518, 044 33,432,660 24,286,375 $ 263, 167,995 Required: 1 let the tantra Arad Ar\AD MAN maintain and match and after online in the FARUR Required: 1. Calculate the target cost required for VIP-MD to maintain its current market share and profit per enrollee in the current year. 2. Costs in the health care industry applicable to VIP-MD and National Physicians are expected to increase by 8% in the coming year. VIP-MD is planning for the year ahead and is expecting all providers, including VIP-MD and National Physicians, to increase their rates by $25 to $349. Calculate the new target cost assuming again that VIP-MD wants to maintain the same profit per enrollee as in the current year. (For all requirements, do not round intermediate calculations and round your answers to 2 decimal places.) 1. Required target com 2. New target cost