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Break even analysis

Question Description

Two-page paper with two resources. Using the example below.Calculate the break even for the number of procedures.  Use an electronic spreadsheet to show how you computed the break even and embed the spreadsheet in your paper.  Discuss the impact of the various reimbursements (e.g., Medicare, Medicaid, private, or self-pay).  Think about your upcoming capital proposal and how you might use the break-even analysis in your Capital Investment Plan Proposal. 

Our robotic equipment and its maintenance represent a fixed cost of $23,320 per month. The cost-effectiveness of robotic-assisted surgery is related to patient volume: With only 10 cases, the fixed cost per case is $2,332, and with 40 cases, the fixed cost per case is $583.

We recently purchased an endoscopic ultrasound(EUS), which allows doctors to examine the 

Linings of the esophagus and stomach, as well as the walls of the gastrointestinal tract. It is a necessary, but expensive, piece of equipment, which cost us $20,000 ($11,000 to purchase, plus$9,000 for renovations).

 Our fixed costs are four fulltime equivalent employees at $336,000 .

Medicare payments are $885 per procedure, and each procedure requires $175 in average variable costs. It has been estimated that we will complete 500 procedures in the first year and 850procedures in years 2 to 5.

We have calculated that 3% of Medicaid patients

account for more than half of our total costs.

Because of this, we are proposing the removal of

the highest risk patients from the primary care

physician´s office and instead providing all

services within a high-risk clinic. Residents will

have a team assigned to them, helping them learn

to manage their chronic conditions. The CFO sees

this plan as a major challenge, because it will

reduce fee-for-service revenue by $25 million,

and add $2 million in costs for items like the

office, staffing, claims analytics, predictive

modeling and risk stratification tools, and case

management information technology platform.

However, we currently lose money on these

residents, so we should lose less money.

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