Healthcare Finance: An Introduction to Accounting and Financial Management
6th Edition
ISBN: 9781567937411
Author: Louis C. Gapenski, Kristin L. Reiter
Publisher: Health Administration Press
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Subject :- Accounting
Bluegrass Community Hospital (BCH) has the following payer groups:
Number of Admissions
Average Revenue per Admission
Variable Cost per Admission
Commercial
1,000
$5,000
$3,000
BCBS
4,000
$4,500
$4,000
Medicare
8,000
$7,000
$2,500
Given: BCH annual fixed costs are $38M
What is BCH’s net income?
If half of the 100,000 covered lives in the Commercial group moved to a capitated rate and utilization and cost data remained the same, what PMPM rate should be charged to maintain the Commercial group net income share?
What would BCH net income be if the Commercial capitated group admissions decreased by 10%?
What would BCH net income be if the Commercial capitated group admissions decreased by 10% and variable costs for the Commercial capitated group decreased to $2,200?
General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services:
Fixed costs
$1,093,754
Variable cost per inpatient day
$19
Charge (revenue) per inpatient day
$105
The hospital expects to have a patient load of 1,599 inpatient days next year. Assume that 18 percent of the hospital's inpatient days come from a managed care plan that wants a 27 percent discount from charges. What is the change in profit if the hospital accepts the proposal?
Chapter 5 Solutions
Healthcare Finance: An Introduction to Accounting and Financial Management
Ch. 5.1 - Prob. 1.1STQCh. 5.1 - Prob. 1.2STQCh. 5.1 - Prob. 1.3STQCh. 5.1 - Prob. 2.1STQCh. 5.1 - Prob. 2.2STQCh. 5.1 - Prob. 2.3STQCh. 5.1 - Prob. 2.4STQCh. 5 - Prob. 1.1STQCh. 5 - Prob. 1.2STQCh. 5 - Prob. 2.1STQ
Ch. 5 - Prob. 2.2STQCh. 5 - Prob. 2.3STQCh. 5 - Prob. 3.1STQCh. 5 - Prob. 3.2STQCh. 5 - Prob. 3.3STQCh. 5 - Prob. 4.1STQCh. 5 - Prob. 4.2STQCh. 5 - Prob. 4.3STQCh. 5 - Prob. 5.1STQCh. 5 - Prob. 5.2STQCh. 5 - Prob. 5.3STQCh. 5 - Prob. 5.4STQCh. 5 - Prob. 6.1STQCh. 5 - Prob. 6.2STQCh. 5 - Prob. 6.3STQCh. 5 - Prob. 6.4STQCh. 5 - Prob. 7.1STQCh. 5 - Prob. 7.2STQCh. 5 - Prob. 7.3STQCh. 5 - Prob. 7.4STQCh. 5 - Prob. 8.1STQCh. 5 - Prob. 8.2STQCh. 5 - Prob. 8.3STQCh. 5 - Prob. 8.4STQCh. 5 - Prob. 5.1QCh. 5 - Prob. 5.2QCh. 5 - Prob. 5.3QCh. 5 - Prob. 5.4QCh. 5 - Prob. 5.5QCh. 5 - Prob. 5.6QCh. 5 - Prob. 5.7QCh. 5 - Prob. 5.8QCh. 5 - Prob. 5.9QCh. 5 - Prob. 5.1PCh. 5 - Prob. 5.2PCh. 5 - Prob. 5.3PCh. 5 - Prob. 5.4PCh. 5 - Prob. 5.5PCh. 5 - Prob. 5.6PCh. 5 - Prob. 5.7PCh. 5 - Prob. 5.8PCh. 5 - Prob. 5.9P
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- General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services Fixed $10,000,000 Variable cost per inpatient day 200 Charge (revenue) per inpatient day 1000 The hospital expects to have a patient load of 15,000 inpatient days next year. a. Construct the hospital’s base case projected P&L statement. b. What is the hospital’s breakeven point? c. What volume is required to provide a profit of $1,000,000? A profit of $500,000? d. Now, assume that 20 percent of the hospital’s inpatient days come from a managed care plan that requests a 25 percent discount from charges. Should the hospital agree to the discount proposal?arrow_forwardAssume that Valley Forge Hospital has only the following three payer groups: Number of Average Revenue Payer Cost Admissions Admission PennCare $3,000 Medicare $4,000 Commercial $2,500 1,000 4,000 8,000 per Admission $5,000 $4,500 $7,000 Variable per The hospital's fixed costs are $38 million. c. What overall net income would be produced if the admission rate of the capitated group (from part B above) were reduced from the commercial level (originally listed as $2,500 total from above) by 10 percent? d. For this same capitated group, assuming that utilization reduction also occurs, what overall net income would be produced if the variable cost per admission for this same capitated group were lowered to $2,200 (from the original $2,500 listed above)?arrow_forwardThis problemarrow_forward
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