You are the manager of a primary care clinic. You are currently negotiating a capitated...
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You are the manager of a primary care clinic. You are currently negotiating a capitated rate with a managed care organization (MCO). Your charges for patient visits are currently $125 to see a physician and $90 to see a nurse practitioner (NP). You have the following expectations regarding average utilization by members of the MCO:
1.5 Physician visits per member per year
2.0 NP visits per member per year
In order to provide care for the MCO members, you will need additional physicians and nurse practitioners. Suppose you expect the following number of visits from this employee group:
1,200 patient visits per physician per year
2,000 patient visits per NP per year
Suppose further that the annual salaries, including benefits, are:
$175,000 annual compensation per physician
$95,000 annual compensation per NP
Calculate the capitation rate that would be needed to cover just the cost of the additional physicians and NPs.
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