Estimate what would happen to the volume of services

Reference no: EM13764704

You are the administrator for a medical practice. Assume all of your practice's patients are covered by insurance. Insurance pays, on average, 80% of your fee for a physician visit for which your practice charge is $100. The patient is responsible for the $100 fee but receives 80% back from the insurer. Currently, your practice's volume for this service is 1,500 per year. Answer the following question in regard to this assumption:

Estimate what would happen to the volume of services and the expected revenue to the practice, should the area's health insurers increase patient cost sharing from 20% to 30% of this charge. Use the concept of price elasticity to make the projection.

For your calculations, use the following as the price elasticities for physician visits:

-0.35, for patients in good or excellent health, and
-0.16, for patients in fair or poor health (taken from Wedig's, 1988).

After a quick survey, you decide that 65% of the practice's patients are in at least good health and account for 1,000 of the 1,500 visits. The remaining patients are in fair or poor health. In light of this survey, write out all the steps of the calculation.

Write answers separately for patients in each category of health status-excellent, good, fair, and poor-for all patients. Share your answers with your classmates. Comment on the responses posted by your classmates.

Reference no: EM13764704

Questions Cloud

Define business strategies for implementation : Create an implementation plan for your organization, a project from the websites such as or a state RFP site.

Report for cost of goods manufactured : Agale Combines, Inc. has $40,000 of ending finished goods inventory as of December 31, 2014. If beginning finished goods inventory was $25,000 and cost of goods sold was $75,000, how much would Agale report for cost of goods manufactured?

Are poor countries somehow different than wealthy countries : Are poor countries somehow different than wealthy countries - How can firms and markets increase the wealth of poor countries? Be sure to address each question in the problem.

Where are any internal procedures violated by tom : Where are any internal procedures violated by Tom and George? The chain of events and type of attack should have required what type of response from the two employees

Estimate what would happen to the volume of services : Estimate what would happen to the volume of services and the expected revenue to the practice, should the area's health insurers increase patient cost sharing from 20% to 30% of this charge. Use the concept of price elasticity to make the projecti..

Write research paper on criminal law : Write research paper on criminal law

Principles and theory of security management : think of some intrusions - the disgruntled mailman flying onto the Capitol lawn on his gyrocopter and remember the couple who crashed a White House function a few years ago

Write research paper on discrimination in police departments : Write research paper on Discrimination in police departments

Determine the four basic financial statements : Identify the four basic financial statements. Describe the purpose of each of the four financial statements.

User Account

All Pages