Establish pricing structure for radiology on per-procedure

Assignment Help Financial Management

Reference no: EM132052952

You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budgetary data is presented below:

Budgeted Procedures 15,000

Budgeted Cost $600,000

Desired Profit $120,000

It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38.00 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below:

Payer Volume % Discount %

Blue Cross 20 4

Unity PPO 15 10

Kaiser 10 10

Self Pay 5 40

50%

1. What rate must be set to generate the required $120,000 in profit in the preceding example?

2. If the forecasted volume increased to 18,000 procedures and budgeted costs increased to $684,000, while all other variables remained constant, what price should be established?

3. Assume that the only change in the original example data is that Blue Cross raises their discount to 20 percent. What price should be set?

Reference no: EM132052952

Questions Cloud

What are the net operating cash flows in years : What is the Year 0 net cash flow? If the answer is negative, use minus sign. What are the net operating cash flows in Years 1, 2, and 3?

The after-tax salvage and the return of working capital : What is the Year 0 net cash flow? What is the additional Year 3 cash flow (i.e, the after-tax salvage and the return of working capital)?

Stocks them in conveniently located warehouses : Forecasted Statements and Ratios Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses,

How many irrs are there in this problem : How many IRRs are there in this problem? Does the IRR rule work in this case?

Establish pricing structure for radiology on per-procedure : You have been asked to establish a pricing structure for radiology on a per-procedure basis.

Calculate the expected return of portfolio : The stock market of country A has an expected return of 5 percent, Calculate the expected return of a portfolio that is half invested in A and half in B.

The dollar rate of return would be : If the investor had sold £50,000 forward at the forward exchange rate of £0.55/$1.00. The dollar rate of return would be.

Find new accommodation at your home or office comfort : Shalom house listing - find new accommodation at your home or office comfort.

Solve for the weighted average cost of capital : Can anyone explain the sellers bank and buyers bank when dealing with trade finance? Solve for the weighted average cost of capital.

User Account

All Pages