Problem:
Bay Pines Medical Center estimates that a capitated population of 50,000 would utilize 440 inpatient days per 1,000 enrollees at an average cost of $1,374 per day. Assume that, in addition to medical costs Dixie allocates 10% of the total premium for administrative and reserve costs.
Required:
Question: What would be the PMPM rate if a utilization management program reduced utilizationof inpatient days by 10% and the average cost per day were reduced by 10%?
Note: Show all workings.