Question - Your clinic has fixed costs of $1,000,000, an average variable cost of $15 per visit, one contract with a HMO where you are paid on a capitated basis. Your contract pays you $15 per member per month and you have 12,000 members. Each member comes into the clinic 2 times per year. How much money are you making (losing)?
1. $2,160,000
2. $1,160,000
3. $800,000
4. None of the above.