document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1080709>Question 1080709</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Activity: You have been asked to set a rate for a Surgical-center. Costs are budgeted to be $4,000,000. Per year for projected surgical procedures of 7,000. The Surgical-center expects that 50 percent of its procedures will be Medicare and that Medicare will pay $550 per procedure. The remainder will be charge payers at an expected discount rate of 29 percent.\r<BR>\n" );
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document.write( "Question: If a profit of $400,000 is required, what rate per procedure is required?\r<BR>\n" );
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document.write( "I am unsure of what I need to do to solve this equation.<BR>\n" );
document.write( "Needed amount is 4,400,000 <BR>\n" );
document.write( "4,000,000 per year with 7,000 procedures = 571.43 per procedure<BR>\n" );
document.write( "Medicare pays 550.00 x 3500 procedures = 1,925,000<BR>\n" );
document.write( "571.43 break even point minus 550.00 Medicare payers = 21.43 deficit<BR>\n" );
document.write( "29% discount of 571.43 = 165.68 , so I added 165.68+571.43+21.43 = 758.54<BR>\n" );
document.write( "3500 procedures at 550.00 = 1,925,000<BR>\n" );
document.write( "3500 procedures at 758.54 = 2,654,890<BR>\n" );
document.write( "total 4,579,890 ....this number is too high, what am I doing wrong? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #694823 by </B><A HREF=/tutors/aboutme.mpl?userid=Boreal><B>Boreal(15235)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Boreal><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Boreal><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=694823\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Medicare will contribute $1,925,000<BR>\n" );
document.write( "The amount missing is 4,400,000-1,925,000=2,475,000<BR>\n" );
document.write( "That has to be made from 3500 procedures.<BR>\n" );
document.write( "$x per procedure nets them 0.71x, so 3500*0.71x=2,475,000<BR>\n" );
document.write( "0.71x=$707.14<BR>\n" );
document.write( "x=$995.97 or $996.<BR>\n" );
document.write( "Check with $1000, since it is easier<BR>\n" );
document.write( "29% discount is $710<BR>\n" );
document.write( "$710*3500=$2,485,000<BR>\n" );
document.write( "The exact amount is $995.97.<BR>\n" );
document.write( "It is easier to do it this way. If the amount is divided by 7000, the number given is for two different costs, and that makes it a lot more difficult. </SPAN>\n" );
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