Question
You are attempting to develop a break-even for a capitation contract with a major HMO. Your hospital has agreed to provide all inpatient hospital services
You are attempting to develop a break-even for a capitation contract with a major HMO. Your hospital has agreed to provide all inpatient hospital services for 10,000 covered lives. You will receive $38 per-member-per-month to cover all inpatient services. It is anticipated that 93 admissions per 1000 covered lives will be provided with an average length of stay equal to 5.0, or 465 days per 1000. You anticipate that your hospital will incur fixed costs or readiness to serve costs of $1,860,000 for these 10,000 covered lives. Variable costs per patient-days are expected to be $600. Calculate the break-even point in patient days under this contract.
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