The administrator of a small, acute-care hospital is faced with his first managed care contract

The administrator of a small, acute-care hospital is faced with his first managed care contract. He meets with representatives from the prepaid plan to discuss the amount to be paid to the hospital. The administrator is concerned because the managed care business does not look profitable the hospital will be reimbursed below its current reimbursement levels. Discuss the various ways the administrator can evaluate this new managed care business in terms of its economic value to the institution.

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