NewAge Hospital generated net patient revenues of $145M for 2012, and its cash collections were $125M. The revenue cycle management costs to collect these revenues were $5M.
a. Compute NewAgeHospital's cost to collect for the year and provide an assessment of how it compares with the industry benchmark of 3%.
b. Compute NewAge Hospital's cost to collect for the year if 25% of the cash collections during the year required human intervention and its EDI costs were $500,000. Provide an assessment of how it compares with the industry benchmark of 4%.