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 $364 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 $321. 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, 288 82,056 95,473 65,846 133,096 166,476 85,896 98,824 155,888 67,495 Projected Enrollment Next Average Monthly cost Year in Current Year 48,577 $ 11,147,472 84,263 10,059,232 95, 487 8 ,436,424 67,482 9,539,024 132,154 26,431,808 175,046 38,881,788 99,489 22,741,536 lei, 523 2 8,691,312 161,159 49, 517,744 72,065 33,432,360 26.449 24,286,75 1,054,694 $ 263, 164,695 1, 018,637 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 8x 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 $346. 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 cost 2. New target cost Required information [The following information applies to the questions displayed below! 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 fed, 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 $364 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 $321. 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 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 45,288 82,056 95,473 65,846 133,296 166, 476 85,096 98,824 155,888 67,495 23,099 1,818,637 Projected Enrollment Next Average Monthly Cost Year in Current Year 48,577 11, 147, 472 34,263 10,059, 232 95,487 8,436,424 67,482 9,539,024 132,154 26,431,808 175,046 38,881,788 98,489 22,741,536 101,523 28,691,312 161, 159 49,517,744 72,065 33,432, 360 24,286,075 1,054.694 5 263, 164,695 3. Identify the critical success factors for VIP-MD. How can the HMO maintain its market share! Essay Toolbar navigation BI SE 31 A A The following information applies to the questions displayed below) 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 $364 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 $321. 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 Be 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, 288 82,056 95,473 65,846 133,096 166,476 85, e96 98, 824 155,888 67,495 23,099 1,018,637 Projected Enrollment Next Average Monthly Cost Year in Current Year 48,577 11,147,472 84,263 10,059, 232 95,487 8,436,424 67,482 9,539,024 132,154 26,431,888 175,846 38,881,708 90,489 22,741,536 101,523 28,691,312 161, 159 49, 517,744 72,065 33,432,360 26,449 24,286,075 1,054,694 $263, 164,695 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 $346. 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.) Required information [The following information applies to the questions displayed below) 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 $364 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 $321. 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 45,288 82,056 95,473 65,846 133,096 166.476 85,096 98,824 155,888 67,495 23,099 818,637 Projected Enrollment Next Average Monthly Cost Year in Current Year 48,577 $ 11, 147,472 84,263 10,859, 232 95,487 8,436,424 67,482 9,539,024 132,154 26,431,888 175,046 38,881,788 98,489 22,741,536 101,523 28,691,312 161, 159 49, 517,744 72,065 33,432,36 26.449 24,286,075 1,054,694 $263, 164, 695 3. Identify the critical success factors for VIP-MD. How can the HMO maintain its market share