Assume that a radiologist group practice has the following cost structure:
Fixed Cost: $350,000
Variable Cost per Procedure: $12.50
Charge (revenue) per procedure: $85
Expected Volume: 7,000 procedure
Construct the group’s base case projected P&L statement
What is the group’s contribution margin?
What is the group’s breakeven point?
What volume is required to provide a pretax profit of $100,000
Assume that the group is considering contracting with a single payer who requires a 10% discount on charges for all patients. Re-do a-d and explain whether the group should take the contract.