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Assume that a primary care physician practice performs only physical appointments. However, there are three...

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Finance

Assume that a primary care physician practice performs only physical appointments. However, there are three levels of appointments sI, II, and IIIthat vary in depth and complexity. An RVU analysis indicates that a level I appointment requires 10 RVUs, a level II appointments 20 RVUs, and a level III appointment 30 RVUs. The total costs to run the practice, including a diagnostic laboratory, amount to $500,000 annually, and the numbers of appointments administered annually are 2,400 level I, 800 level II, and 400 level III.

a. Using RVU methodology, what is the estimated cost per type of appointment?

b. If the goal of the practice is to earn a 20 percent profit margin on each appointment, how should the appointments be priced?

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