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Construct the base case projected profit-loss statement

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Reference no: EM132381843

Pell Clinic has fixed costs of $2 million and an average variable cost rate of $15 per visit. Ocean State HMO, its sole payer, has proposed an annual capitation rate of $150 for each of its 20,000 members. Past experience indicates that the population served will average two visits per year.

a. Construct the base case projected Profit & Loss statement on the contract.

b. What profit gain can be realized if Pell Clinic can lower per member utilization to 1.8 visits per year?

Reference no: EM132381843

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