A local clinic created the following static budget table for the year 2015. Comp
ID: 2552501 • Letter: A
Question
A local clinic created the following static budget table for the year 2015. Complete the table below by filling the blanks and creating a profit & loss statement under section IV
Section I-Volume Assumptions
A-FFS (fee for service) 50,000 vists
B-Capitated lives 30,000 members
Number of member-months ?
Expected utilization per member-month 0.25
Number of visits ?
Total Expected Visits ?
Section II- Revenue Assumptions
A-FFS $30/visit (30x50,000 expected visits)=$1,500,000
B-Capitated lives $3 PMPM (3x 360,000 member-months)=$1,080,000
Total Expected Revenues ?
Section III-Cost Assumptions
A-Variable Costs:
Labor (60,000 hrs at $25/hr)=$1,500,000
Supplies (200,000 units at $1.5unit/hr)=$300,000
Total variable Cost $1,800,000
Variable cost per visit (1,800,000/140,000)=$12.8571429
B-Fixed Costs $500,000
C-Total expected costs ?
Section IV-Profit & Loss statement-create
Explanation / Answer
Section I-Volume Assumptions;
A. FFS (Fee for service)
50000 visits
B. Capitated lives
30000 members
Number of member-months
360000
Expected utilization per member-month
0.25
Number of visits (360000 * 0.25)
90000 visits
C. Total Expected Visits (50000 + 90000)
140000 visits
Section II- Revenue Assumptions;
A. FFS ($30 * 50000)
$1500000
B. Capitated lives ($3 * 360000)
$1080000
C. Total Expected Revenues ($1500000 + $1080000)
$2580000
Section III-Cost Assumptions;
A-Variable Costs:
Labor (60000 hours * $25)
$1500000
Supplies (200000 units * $1.5)
$300000
Total variable costs
$1800000
Variable cost per unit ($1800000 / 140000 visits)
$12.8571429
Fixed costs
$500000
C-Total expected costs ($1800000 + $500000)
$2300000
Section IV-Profit & Loss statement
Revenues;
FFS
$1500000
Capitated
$1080000
Total
$2580000
Costs;
Variable:
FFS ($1800000 * 50000 / 140000)
$642857.14
Capitated ($1800000 * 90000 / 140000)
$1157142.86
Total
($1800000)
Contribution margin
$780000
Fixed costs
($500000)
Projected profit
$280000
Section I-Volume Assumptions;
A. FFS (Fee for service)
50000 visits
B. Capitated lives
30000 members
Number of member-months
360000
Expected utilization per member-month
0.25
Number of visits (360000 * 0.25)
90000 visits
C. Total Expected Visits (50000 + 90000)
140000 visits
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.