Question: Assume a hospital admits 7,500 patients per year, average price per admission = $10,000 and average total cost = $5,000. Medicare pays $5,100 per case, commercial insurance pays 80% of charges, managed care pays $1,300 per day (average length of stay = 4.0 days), capitation (managed care 2) pays $42.00 per member per month and has 75,000 covered lifes and Medicaid/No pays 90% of cost. Complete the first four columns of the table, Reimbursement tab, assuming all patients are paid under the same reimbursement system. Complete the composite column assuming Medicare covers 50% of patients, commercial 15%, managed care 20%, capitation (managed care 2) 5%, and Medicaid/No pay covers the remaining 10%.

Medicare Commercial Managed Care Medicaid Capitation Composite

Total Revenue ________ ________ ________ ________ ________ ________

Contractual ________ ________ ________ ________ ________ ________

Net Revenue ________ ________ ________ ________ ________ ________

Total Expense ________ ________ ________ ________ ________ ________

Net Income ________ ________ ________ ________ ________ ________