Question

Based on the information below, what rate must be set to generate the required

$80,000 in profit in the preceding example?

You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budgetary data is presented below:

Budgeted Procedures $10,000

Budgeted Cost $400,000

Desired Profit $80,000

It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38.00 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below:

Payer Volume% Discount%

Blue Cross 20 4

Unity PPO 15 10

Kaiser 10 10

Self Pay 5 40

  50%

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