A local health care facility has fixed costs per month of $187 400. They also have patient costs of $4.15 per day per patient for linen and cleaning, medication costs are $23.32 per patient per day and lab tests cost $75.61 per patient per day. The government is considering allowing the health care facility to charge each patient and amount to recover his or her costs and to make a "profit" of $15 000 per month. The health care facility averages 690 patients per month. The VP-Finance for the facility wants you to calculate the daily rate charge per patient

Question

A local health care facility has fixed costs per month of $187 400. They also have patient costs of $4.15 per day per patient for linen and cleaning, medication costs are $23.32 per patient per day and lab tests cost $75.61 per patient per day. The government is considering allowing the health care facility to charge each patient and amount to recover his or her costs and to make a "profit" of $15 000 per month. The health care facility averages 690 patients per month. The VP-Finance for the facility wants you to calculate the daily rate charge per patient

Answer 1

A local health care facility has fixed costs per month of $187 400. They also have patient costs of $4.15 per day per patient for linen and cleaning, medication costs are $23.32 per patient per day and lab tests cost $75.61 per patient per day. The government is considering allowing the health care facility to charge each patient and amount to recover his or her costs and to make a "profit" of $15 000 per month. The health care facility averages 690 patients per month. The VP-Finance for the facility wants you to calculate the daily rate charge per patient

Answer 2

First, let's calculate the variable costs per patient per day:

Variable cost = linen and cleaning cost + medication cost + lab test cost
Variable cost = $4.15 + $23.32 + $75.61
Variable cost = $103.08

Next, let's calculate the total variable costs for the facility per month:

Total variable costs = variable cost per patient per day x number of patients per day x number of days per month
Total variable costs = $103.08 x 690 x 30
Total variable costs = $2,003,868

Now, let's calculate the total costs (fixed and variable) per month:

Total costs = fixed costs + total variable costs + profit
Total costs = $187,400 + $2,003,868 + $15,000
Total costs = $2,206,268

Finally, let's calculate the daily rate charge per patient:

Daily rate charge per patient = total costs per month / number of patients per month / number of days per month
Daily rate charge per patient = $2,206,268 / 690 / 30
Daily rate charge per patient = $107.06

Therefore, the health care facility should charge each patient $107.06 per day to cover their costs and make a profit of $15,000 per month.