An urban health care facility is interested in providing quality care at an affordable price to all patients. On average, the facility serves 500 patients monthly, with the average net contribution to profit being $400 per patient. Recently, a quality improvement team studied the various processes that led to an improvement in a monthly cost savings of $40,000.

(a) Ignoring other costs, what is the net contribution to profit per patient, assuming the same patient volume?

(b) Despite these improvements, the opening of a new facility across town diminished market share by 10%. How do you account for this toward profitability? What should the facility now do?