Problem Set 6

Problem Set 6 - HPM 340: Foundations of Health Care...

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HPM 340: Foundations of Health Care Financial Management Fall 2009 Problem Set 6 1. Define unit contribution margin. 2. Gapenski, Chapter 5, Problem 1 (parts a, b and c) 3. Gapenski, Chapter 5, Problem 2 4. Gapenski, Chapter 5, Problem 3 5. Gapenski, Chapter 5, Problem 4 6. Gapenski, Chapter 5, Problem 7 7. University Internal Medicine, a large group physician practice is considering contracting with a new insurer. University Internal Medicine has estimated that the new contract would result in 1,000 additional visits to the practice each year. The insurer will pay a price per visit of $50. University Internal Medicine has estimated its average cost per visit at $95 and its variable cost rate (variable cost per visit) at $30. Assuming University Internal Medicine is generating a profit on its existing business (without the new contract) and will incur no additional fixed costs to support the new visits: (a) should University Internal Medicine accept the new contract?, and (b) how much will
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This note was uploaded on 02/24/2010 for the course HPM 340 taught by Professor Reiter during the Spring '10 term at UNC.

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Problem Set 6 - HPM 340: Foundations of Health Care...

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