Fiance budgeting

QUESTION

Please helpIf an HMO covered 150,000 lives, expected 25 myocardial infarctions (MI) to occur each year within the covered lives, would expect a length of stay of 4.5 days for each MI, and had to pay an average of $950 per day for each day the MI patient was in the hospital, what would the PMPM cost
Expected cases per year = (25*4.5)/150000 = 112.5/150000 = 0.00075 PMPM = Expected cases per year* Cost per case/12 = 0.00075*950/12 = 0.06 So PMPM = $0.06 Admin cost = 10% of its costs =

M = 0.006 So total cost = 0.06 0.006 = 0.066 Add 7% profit = 1.07*0.066 = 0.070 So Patient will be charged $0.070 for this illness

ANSWER:

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