Activity you have been asked to establish a pricing


Activity: You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budget 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 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%. What rate must be set to generate the required $80,000 in profit in the preceding example?

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Financial Management: Activity you have been asked to establish a pricing
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