3. A surgeon eurrently earns $250,000 a year performing 100 surgeries on Medicar

Question

3. A surgeon eurrently earns $250,000 a year performing 100 surgeries on Medicare patients. On order to contain costs, Medicare institutes a reimbursement reduction of 20%, reducing the per surgery payment from $2,500 per case to $2,000 How many surgeries will the physician have to perform to maintain his income of $250,000 after the reimbursement reductions are put into place? 1 Assume a quality improvement program win increase a hospital's revenue by is, increase treatment costs by os%, and add SSoo ooo in administrative esti What will be the impact on the organization's net income if its revenues, total treatment costs, and administrative expenses are currently $100,000,000 $70,000,00o and $25.000,000?

Explanation / Answer

I am solving the problem below (since we cannot attach microsoft excel or word document), let me know in case you need any help with the below solution

Q3)

Number of surgeries Performed earlier = 100

Cost per sugery earlier = 2500$

Reduced cost of surgery = 2000$

Let us denote x be the number of surgery that doctor has to do for generating same income

2500 * 100 = x * 2000

x = 5/4 * 100 = 125 surgeries

Hence the doctor has to perform 125 surgeries

4)

New Revenue = Old Revenue * 1.01 = 100000000 * 1.01 = 101000000$

New treatment cost = Old treatment cost * 1.05 = 70000000 * 1.05 = 73500000$

New administrative Cost = Old cost + 500000 = 25000000+ 500000 = 25500000

New Profit = Revenue - treatment cost - administration cost

=> 101000000$ - 73500000$ - 25500000$

=> 2000000$

Old Profit = 100000000 - 70000000 - 25000000 = 5000000

Net income will reduce

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.