Reference no: EM133177765

Question - PPO of Millbridge Township (PPOMT) sells health benefit plans to local employers. The organization charges its clients (local employers) $50 for each office visit provided to a covered employee. PPOMT contracts with individual physicians to provide the office visits individual physicians to provide the office visits to its health plan beneficiaries. The organization pays its contracted physicians a fee of $40 of each new patient visit and $30 for each follow-up office visit. Twenty percent of all office visits are new patient visits. PPOMT maintains an office building where all routine office visits are conducted. The organization pays $6,000 in occupancy expenses each month for the building. PPOMT also incurs monthly staffing costs of $12,000 for maintenance and administrative staff at it facility.

Required -

1. How many office visits must PPOMT deliver to break even?

2. How does one calculate the CM for the clients (local employers)?