You are the manager of the Gastroenterology Department and you are being asked to develop a new budget for a procedure involving a series of diagnostic tests. The current cost is $2,000 per procedure but at this rate, your department is losing over $100,000.

You are being asked to identify a new price point for this procedure so that there will be a $50,000 surplus. What is the new charge per procedure?

You have 50 Medicare patients who pay $1,500 per procedure; 60 Medicaid patients who pay $1,200 per procedure, 20 Managed Care patients who pay a negotiated 25% less per procedure and another group of 50 Managed Care patients who pay 15% less per procedure; 10 private insured patients who pay the full amount; 5 Charity care patients who pay nothing and 5 patients who have bad debts and pay nothing.

For each patient group: what are the total costs, the total charges, the amount that you will be able to collect, and the total profit?