Problem:

Northeast Medical Group a family practice, has the following financial data and operational metrics:

• Number of physicians 5
• Total revenue $2,748,360
• Total operating costs $1,557,615
• Total procedures per physician 12,353
• Patients per physician 1,941
• Visits per physician 5,333

Required:

Question 1: What is the group's revenue per physician?

Question 2: What is the group's operating cost per physician?

Question 3: What is the group's total operating profit?

Question 4: What is the group's profit per physician? Per patient? Per visit? Per procedure?

Question 5: Assume that the group plans to reinvest $50,000 of its profits in the practice. (It plans to buy a new EKG [electrocardiogram] machine.) Also, assume that the remainder of profits will be distributed equally to the group's physicians as salary. What compensation will each physician receive?

Note: Be sure to show how you arrived at your answer.