ABSTRACT
Introduction .................................................................................................................................... 184 Hospitalists and Physicians ............................................................................................................ 185 Medical Office Profits .................................................................................................................... 185
The Profit Equation ................................................................................................................... 185 Marginal Profit .......................................................................................................................... 188
Cost-Volume-Profit Analysis ......................................................................................................... 188 Traditional Net Income Statement ........................................................................................... 188 Contribution Margin Income Statement ................................................................................... 188 Contribution Margin Ratio ........................................................................................................ 190 Standard Cost Profiles .............................................................................................................. 190
Capitation Reimbursement ............................................................................................................. 191 Cost-Volume-Profit Analysis ..................................................................................................... 192 Capitation Economics ............................................................................................................... 193
Payer Mix Scenario 1: Shift to Capitation ........................................................................... 194 Payer Mix Scenario 2: Maintain Practice Cost Savings ....................................................... 195 Payer Mix Scenario 3: Manage the Level of Capitated Business......................................... 195
Break-Even Analysis for Capitated Contracts ............................................................................... 196 Net Target Profit Analysis ......................................................................................................... 196 Margin of Safety ....................................................................................................................... 196 Office Operating Leverage ........................................................................................................ 197 Standard Treatment Protocols .................................................................................................. 197
Goals and Objectives of STPs .............................................................................................. 198 Targeted Procedures ............................................................................................................. 198
Capitation Impact Analysis: Experiences, Attitudes, and Predictors ............................................. 198 Negotiation and Managed Care Contracting .................................................................................. 199
Contract Negotiation Objectives ............................................................................................... 199 Types of Contracts .....................................................................................................................200
