Question

I need help in this questions. Please clearly type so i can understand everything. Please make everything clear and correct

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 40% of the patients and pays a fixed fee of $95 per patient. Payer 2, a Commercial Insurer, represents 55% 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 4,000 patients per month. The fixed costs of the provider each month is $210,000, and their variable cost per patient is $60. The provider desires to set its gross charge per patient to achieve a profit, or net income, of $10,000 for the month a) Solve the problem finding the Gross Price to be charged. (Show your work as partial credit will be given.) b) How many charity patients does the organization treat per month? What is the grand total sum of payments that the Commercial Insurer pays for all its patients in e) a month? patients together in the month). (Note, this is not the total for one patient, but instead it is the total for all their

Answer 1

The healthcare provider can be taken as a doctor who receives his fee from the healthcare insurers on behalf of the patients. The health care provider will charge such a fee from the commercially insured patients so that he earns a net profit of $10000. The insurer cannot do anything about the medicare patients since their charge is fixed but the healthcare provider can charge more price from the commercially insured patients to earn the required net profit. He will set such fee charge (gross price) that even after getting only 80% of the fee charge, he will be able to earn the required profit. First, he will find out what should be the fee charge to earn a net profit of $10000. Then he will raise this fee charge to get such a gross price so that even after getting 80% of the charge, his profits will remain intact.
Total Medicare patients = Patients – 4000 4000 x 40%. - 1600 Commercially insured - 4000x 55%. e Patients = 2200 5 Remaining Charity care = 4000 x 5% patients = doo * Total patients will be 100% So, charity care patients are = 100% -40% -55% - - 5 % - Cost = Profit (a) Gross Price (1600 X 95) + 22003c - 210000 - 60X4000 = Revenue = 152000 +22000 - 210000 - 240000 - 10000 10000 22000 - 298000 = 10000 22000 = 308000 30 = 308000 + 2200 x = 140 Gonen Laalit dhe

Gross price The commercial insurer pays only 80% of gross price. we know, commercial insurer pay $40. This $140 is 80% of gross price. Therefore grass price will be $140 0.80 - $ 175

In the calculations above, we tried to calcul the calcu cate, the net profit. The revenue of crevenue from patients is sum total of the fee receipts.. The medicare patients $95 pay a fixed camount of a Number of medicare patients = 1600 Revenue from medicare patients = 1600XAS =$152000 - Revenue from commercially insured patients = 2200X30 - 22000 Since we do not know the gross price, we take it as x... All the costs are to be subtracted from the sum total of revenue. cost - fixed cost = $210000 variable cost = $60 x 4000* = $240000 Note: The cost is to be paid on all patients? they whether pay fees or not.

(6) Charity patients are 5% of 4000 patients - 200 patiente (C) Number of patiente insured by commercial insurer - 2200 & Payment for one patients = 80% of $175 = $140 Grand total sum = 2200 x $ 140 = $ 308000