The Finance Office of Gulf Coast Medical Group (GCMG), a large, multispecialty physician group affiliated with a regional academic health system, reported $1,432,600 in direct departmental costs in 2024. These overhead costs must be allocated to GCMG’s five patient service departments using the direct method of cost allocation. The finance team has been instructed to evaluate cost allocation using two possible drivers: 1) number of bills submitted and 2) patient service revenue. In 2024, GCMG’s departments submitted 75,980 bills and reported $17,984,220 in total patient service revenues. What is the Finance Office’s allocation rate if the number of bills is used as the cost driver? What is the allocation rate if patient service revenue is used as the cost driver?

Harborview Health Center reports 22,000 patient visits annually. The clinic’s total fixed costs are $1,100,000, and at this volume, total costs amount to $2,310,000. Also, the clinic is evaluating a potential merger with BaySide Medical, which currently has annual fixed costs of $1,550,000. While discussions are ongoing, Harborview has also begun renegotiations with its supply contracts to potentially reduce future variable costs. What is Harborview Health Center’s total profit at this volume of service?

Refer to previous problem. Assume that the five patient services departments are Internal Medicine, Dermatology and Aesthetics, Chronic Care Management (CCM), Diagnostics, and Laboratory Services. The number of claims submitted per year and patient services revenue for each department are as follows: Department Number of Claims Submitted per Year Annual Patient Service Revenues Internal Medicine 15098 $5,462,451 Dermatology and Aesthetics 11970 $4,330,667 Chronic Care Management (CCM) 9549 $1,833,531 Diagnostics 21865 $3,453,098 Laboratory Services 17498 $2,904,473 Total 75980 $17,984,220   What is the dollar allocation to the Dermatology and Aesthetics department if number of bills/claims submitted per year is used as the cost driver? What is the dollar allocation to the Dermatology and Aesthetics department if patient services revenue is used as the cost driver?

Harborview Health Center reports 22,000 patient visits annually. The clinic’s total fixed costs are $1,100,000, and at this volume, total costs amount to $2,310,000. Also, the clinic is evaluating a potential merger with BaySide Medical, which currently has annual fixed costs of $1,550,000. While discussions are ongoing, Harborview has also begun renegotiations with its supply contracts to potentially reduce future variable costs. What is Harborview Health Center’s total profit at this volume of service?

A local insurer has proposed to pay Sunrise Wellness Group a per member per month (PMPM) payment of $17.25 for each enrolled patient. Sunrise has annual fixed costs of $2,150,000. The practice estimates that each enrolled patient will average 3 visits per year, with a per-visit cost of $42.10. Approximately, how many patients must be included in their patient panel for Sunrise Wellness Group to earn an annual profit of $275,000?

After training, which of the following algorithms does not provide a way to produce predictions on new, unseen data?

The Finance Office of Gulf Coast Medical Group (GCMG), a large, multispecialty physician group affiliated with a regional academic health system, reported $1,432,600 in direct departmental costs in 2024. These overhead costs must be allocated to GCMG’s five patient service departments using the direct method of cost allocation. The finance team has been instructed to evaluate cost allocation using two possible drivers: 1) number of bills submitted and 2) patient service revenue. In 2024, GCMG’s departments submitted 75,980 bills and reported $17,984,220 in total patient service revenues. What is the Finance Office’s allocation rate if the number of bills is used as the cost driver? What is the allocation rate if patient service revenue is used as the cost driver?

Refer to previous problem. Assume that the five patient services departments are Internal Medicine, Dermatology and Aesthetics, Chronic Care Management (CCM), Diagnostics, and Laboratory Services. The number of claims submitted per year and patient services revenue for each department are as follows: Department Number of Claims Submitted per Year Annual Patient Service Revenues Internal Medicine 15098 $5,462,451 Dermatology and Aesthetics 11970 $4,330,667 Chronic Care Management (CCM) 9549 $1,833,531 Diagnostics 21865 $3,453,098 Laboratory Services 17498 $2,904,473 Total 75980 $17,984,220   What is the dollar allocation to the Dermatology and Aesthetics department if number of bills/claims submitted per year is used as the cost driver? What is the dollar allocation to the Dermatology and Aesthetics department if patient services revenue is used as the cost driver?

A local insurer has proposed to pay Sunrise Wellness Group a per member per month (PMPM) payment of $17.25 for each enrolled patient. Sunrise has annual fixed costs of $2,150,000. The practice estimates that each enrolled patient will average 3 visits per year, with a per-visit cost of $42.10. Approximately, how many patients must be included in their patient panel for Sunrise Wellness Group to earn an annual profit of $275,000?

After training, which of the following algorithms does not provide a way to produce predictions on new, unseen data?