Variable cost per inpatient stay 

MMHA6160 week 4 assignment

 

 

5.4 General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services:

Fixed costs                                                                          $10,000,000

Variable cost per inpatient stay                                 $200

Charge (revenue) per inpatient day                                  $1,000

The hospital expects to have a patient load of 15,000 inpatient days next year.

a)      Construct the hospital’s base case projected P&I 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 manager care plan that wants a 25 percent discount from charges. Should the hospital agree to the discount proposal?

 

5.5You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows:

Revenues (10,000 visits)                                                               $400,000

Wages and benefits                                                        $220,000

Rent                                                                                      $    5,000

Depreciation                                                                      $  30,000

Utilities                                                                                 $    2,500

Medical supplies                                                              $   50,000

Administrative supplies                                                 $   10,000

Assume that all costs are fixed, except supply costs, which are variable. Furthermore, assume that the clinic must pay taxes at a 30 percent rate.

a)      Construct the clinic’s projected P&L statement.

b)      What number of visits is required to break even?

c)       What number of visits is required to provide you with an after-tax profit of $100,000?

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Variable cost per inpatient stay  was first posted on September 18, 2019 at 3:56 pm.
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