Use the following information for questions 30 and 31: Color…
Use the following information for questions 30 and 31: Colorado Clinic has fixed costs of $2 million and an average variable cost of $30 per visit. Its sole payer, an HMO, proposed a capitated payment of $18 per member per month (PMPM) for each of its 17,500 members. Past experience indicates the HMO members will average two clinic visits per year. Assume Colorado Clinic is a tax-exempt, not-for-profit organization. What is Colorado Clinic’s expected profit (loss)?