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HCMN415 Healthcare Finance Exam #1 (FA20)B Professor: Dr. Cassandra R. Henson 1. Henson Research Hospital offers a variety of procedures for early detection and treatment of various types of cancer. Each stage of cancer involves specific tests and treatments, but also has a varying number of patients. As the new Senior Financial Analyst, you have to advise the executive team on pricing for services offered. The CFO has mandated overhead of $200,000, a quarter of which is to be allocated to services below. Approximately $95,000 in profit is also directly contributed to these services. Use the data provided below to create a fee schedule (list of prices) for services. Overhead should be allocated proportionately to volume, and profit should be allocated proportionately to revenue. (value = 20 points) 2. Fill in the missing items below. (value = 10 points) 3. Dr. Henson is opening an Urgent Care Center near Towson University, and is currently assessing her new site’s financial position. She wants to ensure good, quality care for patients at an affordable price. As the organization’s Senior Financial Analyst, you’re responsible for the evaluation of the following data: (value = 20 points) Number of Health Screenings: 8,500Building Construction: $155,000 Staffing/salaries: $185,000Medical Supplies: $40,000 Utilities: $6,500Patient Snacks: $20,000 Required patient document delivery to primary physician: $5,000 a) Calculate the initial total costs and variable cost rate. b) Calculate total costs at 12,000 and 15,000 screenings. c) Calculate the average costs for 8,500, 12,000 and 15,000 screenings respectively. 4. A firm that owns the stock of another corporation does not have to pay taxes on the entire amount of dividends received… only 30% of dividends received by one corporation from another are taxable. Assume that a firm with a 33% tax rate receives $750,000 in dividends from another corporation. What taxes must be paid on this dividend and what is the after-tax amount? (value = 10 points) 5. Henson Research Hospital performs a myriad of radiology based services, but needs to analyze things to see if these offerings will continue. The radiology department has fixed costs of $600,000, variable costs per radiology procedure of $35 and charges $155 per radiology per procedure. Expected volume for the year is 8,000 procedures. There are no overhead costs allocated to the radiology services department. Are they charging enough to cover everything? What is the current profit per procedure? What would the price be if the desired overall profit was $400,000? (value = 20 points) 6. Complete the PMPM calculations below. (20 points) Annual Variable CostAnnual DirectAnnual ServiceRevenuePer ProcedureFixed Cost# Procedures Stage Screening250,000$ 10$ 50,000$ 5,000 Intro Dosage100,000$ 25$ 30,000$ 2,500 Radiation 500,000$ 50$ 15,000$ 2,000 Chemotherapy750,000$ 75$ 5,000$ 500 RevenuesTotal Var CostsFixed CostsTotal CostsProfit a.2,000$ 1,400$ ?2,000$ ? b.?1,000$ ?1,600$ 2,400$ c.4,000$ ?600$ 400$ Annual UnitCopay Copay CopayNet Service CategoryFreq per 1000Unit CostPMPMFreq per 1000AmountPMPMPMPM Inpatient Services Medical - Surgical50075000 Maternity 4565000 Mental Health6535000 Subtotal Outpatient Services Outpt Surgery25012002575 Lab/X-ray5502502010 Emergency Dept. 2004507550 Subtotal Total (All)-$ -$ -$ HCMN415 Healthcare Finance Exam #1 (FA20)B Professor: Dr. Cassandra R. Henson 1. Henson Research Hospital offers a variety of procedures for early detection and treatment of various types of cancer. Each stage of cancer involves specific tests and treatments, but also has a varying number of patients. As the new Senior Financial Analyst, you have to advise the executive team on pricing for services offered. The CFO has mandated overhead of $200,000, a quarter of which is to be allocated to services below. Approximately $95,000 in profit is also directly contributed to these services. Use the data provided below to create a fee schedule (list of prices) for services. Overhead should be allocated proportionately to volume, and profit should be allocated proportionately to revenue. (value = 20 points) 2. Fill in the missing items below. (value = 10 points) 3. Dr. Henson is opening an Urgent Care Center near Towson University, and is currently assessing her new site’s financial position. She wants to ensure good, quality care for patients at an affordable price. As the organization’s Senior Financial Analyst, you’re responsible for the evaluation of the following data: (value = 20 points) Number of Health Screenings: 8,500Building Construction: $155,000 Staffing/salaries: $185,000Medical Supplies: $40,000 Utilities: $6,500Patient Snacks: $20,000 Required patient document delivery to primary physician: $5,000 a) Calculate the initial total costs and variable cost rate. b) Calculate total costs at 12,000 and 15,000 screenings. c) Calculate the average costs for 8,500, 12,000 and 15,000 screenings respectively. 4. A firm that owns the stock of another corporation does not have to pay taxes on the entire amount of dividends received… only 30% of dividends received by one corporation from another are taxable. Assume that a firm with a 33% tax rate receives $750,000 in dividends from another corporation. What taxes must be paid on this dividend and what is the after-tax amount? (value = 10 points) 5. Henson Research Hospital performs a myriad of radiology based services, but needs to analyze things to see if these offerings will continue. The radiology department has fixed costs of $600,000, variable costs per radiology procedure of $35 and charges $155 per radiology per procedure. Expected volume for the year is 8,000 procedures. There are no overhead costs allocated to the radiology services department. Are they charging enough to cover everything? What is the current profit per procedure? What would the price be if the desired overall profit was $400,000? (value = 20 points) 6. Complete the PMPM calculations below. (20 points) Annual Variable CostAnnual DirectAnnual ServiceRevenuePer ProcedureFixed Cost# Procedures Stage Screening250,000$ 10$ 50,000$ 5,000 Intro Dosage100,000$ 25$ 30,000$ 2,500 Radiation 500,000$ 50$ 15,000$ 2,000 Chemotherapy750,000$ 75$ 5,000$ 500 RevenuesTotal Var CostsFixed CostsTotal CostsProfit a.2,000$ 1,400$ ?2,000$ ? b.?1,000$ ?1,600$ 2,400$ c.4,000$ ?600$ 400$ Annual UnitCopay Copay CopayNet Service CategoryFreq per 1000Unit CostPMPMFreq per 1000AmountPMPMPMPM Inpatient Services Medical - Surgical50075000 Maternity 4565000 Mental Health6535000 Subtotal Outpatient Services Outpt Surgery25012002575 Lab/X-ray5502502010 Emergency Dept. 2004507550 Subtotal Total (All)-$ -$ -$