A healthcare provider offers a single service to its patients, and the patients are covered by only two different third parties. Payer 1, Medicare, represents 50% of the patients and pays a fixed fee of $325 per patient. Payer 2, a Commercial Insurer, represents 45% of the patients and pays 80% of the provider's gross charge. The remaining patients are Charity Care patients who do not pay for their services. The provider treats 3,200 patients per month. The fixed costs of the provider each month is $87,000, and their variable cost per patient is $330. The provider desires to set its gross charge per patient to achieve a profit, or net income, of $97,000 for the month. a. Set up an Algebraic expression, with "p" being the gross charge (price) of the service to each patient being seen in the month, to solve this problem. Show this expression on your spreadsheet. b. Solve the problem finding the Gross Price to be charged to achieve the profit target. c. How many charity patients does the organization treat per month? d. What is the grand total sum of payments that the Commercial Insurer pays for all its patients in a month? (Note, this is not the total for one patient, but instead it is the total for all their patients together in the month). Can you show the algebraic formula you use and what or how it should look on an excel spreadsheet with the formula. Please provide explenation.
A healthcare provider offers a single service to its patients, and the patients are covered by only two different third parties. Payer 1, Medicare, represents 50% of the patients and pays a fixed fee of $325 per patient. Payer 2, a Commercial Insurer, represents 45% of the patients and pays 80% of the provider's gross charge. The remaining patients are Charity Care patients who do not pay for their services. The provider treats 3,200 patients per month. The fixed costs of the provider each month is $87,000, and their variable cost per patient is $330. The provider desires to set its gross charge per patient to achieve a profit, or net income, of $97,000 for the month. a. Set up an Algebraic expression, with "p" being the gross charge (price) of the service to each patient being seen in the month, to solve this problem. Show this expression on your spreadsheet. b. Solve the problem finding the Gross Price to be charged to achieve the profit target. c. How many charity patients does the organization treat per month? d. What is the grand total sum of payments that the Commercial Insurer pays for all its patients in a month? (Note, this is not the total for one patient, but instead it is the total for all their patients together in the month). Can you show the algebraic formula you use and what or how it should look on an excel spreadsheet with the formula. Please provide explenation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:A healthcare provider offers a single service to its patients, and the patients are covered by only two different third
parties. Payer 1, Medicare, represents 50% of the patients and pays a fixed fee of $325 per patient. Payer 2, a
Commercial Insurer, represents 45% of the patients and pays 80% of the provider's gross charge. The remaining patients
are Charity Care patients who do not pay for their services. The provider treats 3,200 patients per month. The fixed costs
of the provider each month is $87,000, and their variable cost per patient is $330. The provider desires to set its gross
charge per patient to achieve a profit, or net income, of $97,000 for the month. a. Set up an Algebraic expression, with
"p" being the gross charge (price) of the service to each patient being seen in the month, to solve this problem. Show
this expression on your spreadsheet. b. Solve the problem finding the Gross Price to be charged to achieve the profit
target. c. How many charity patients does the organization treat per month? d. What is the grand total sum of
payments that the Commercial Insurer pays for all its patients in a month? (Note, this is not the total for one patient, but
instead it is the total for all their patients together in the month). Can you show the algebraic formula you use and what
or how it should look on an excel spreadsheet with the formula. Please provide explenation.
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