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
What overall net income would be produced if the admission rate of the capitated group were reduced from the commercial level by 10 percent?