Assume that Valley Forge Hospital has only the following three payer groups:
Payer Number of Average Revenue Variable Cost Revenues per Admission
PennCare 1,000 $5,000 $3,000
Medicare 4,000 4,500 4,000
Commercial 8,000 7,000 2,500
Assuming that the utilization reduction also occurs, what overall net income would be produced if the variable cost per admission for the capitated group were lowered to $2,200?