How much money would you lose per xyz patient

Reference no: EM133304060

Assignment: Consider the following scenario: Suppose your hospital has the opportunity to acquire a clinic. You are expecting a total of 110,000 patients per year. You plan to charge $79 per visit (before any discount). However, 39,000 of these patients come from the HMO XYZ. You are asked to consider entering into a contract with XYZ. The cost of every patient visit is $54, regardless of whether they are XYZ patients or your other patients. In contract negotiations, the HMO has proposed that its contract with you will contain an 18.25% discount for all XYZ patients on what you normally charge for visits. If the clinic refuses, XYZ has threatened to take its members elsewhere. Meaning, if you turn down their offer, you will lose 39,000 patients per year. Your fixed cost, regardless of how many patients you see, is $256,900 per year

Question 1:How much money would you lose per XYZ patient

Question 2: What is the total loss from XYZ patients

Question 3: What is your total profit/loss if you reject XYZ's proposal

Question 4: What is your total profit/loss if you accept XYZ's proposal

Question 5: Based on these results, what is your next step? Explain in detail. If you choose to negotiate, describe in detail what you would propose to XYZ, with exact numbers and figure.

Reference no: EM133304060

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