Assume the following information about cost and charges for a hospital in 2014:

Fixed Costs = $10,000,000

Variable cost per inpatient Day = $200

Charge Per Inpatient Day = $1,000.

Initial volume of 15,000 inpatient days

Review Nowicki Chapter 6 and Gapenski Chapter 5. From what you have learned in these chapters estimate the: a) accounting breakeven point quantity (in terms of inpatient days) and breakeven dollar amount and b) the economic breakeven point quantity (inpatient days) and dollar amount. Explain the contribution margin. Write a short paper in the following format: Cover page with your name, class/section and instructor’s name For each measure estimated above, in a paragraph: define the measure, explain the importance of that measure to the healthcare services manager. Explain how these breakeven points would vary in a capitated and non-capitated environment. Provide a numerical example in a table to illustrate difference.


 

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