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Before incurring the expense of assembling a new PPO network, the Protect Health Plan conducted a cost analysis in order to determine the cost-effectiveness of renting an existing PPO network instead. In calculating the overall cost of renting the network, Protect assumed a premium of $2.52 per member per month (PMPM) and estimated the total number of members to be 9,000. This information indicates that Protect would calculate its annual network rental cost to be
Suggested Answer: C
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8 comments · newest first
TA
Tambra
5 days ago
Totally agree, C is the right choice!
EL
Elza
10 days ago
Wait, how did they get to that number? Seems off.
AL
Aleta
15 days ago
Definitely going with option C, that makes sense!
MA
Margurite
20 days ago
The rental cost is calculated by multiplying PMPM by the number of members.
ST
Stephanie
25 days ago
I’m leaning towards option C, but I’m not completely confident in my calculations.
DI
Diane
1 month ago
I feel like this is similar to that practice question we did about network costs, but I can’t recall the exact numbers we used.
KA
Kattie
1 month ago
I think we just multiply the PMPM by the number of members and then by 12 for the annual cost, right?
SH
Shawana
1 month ago
I remember we practiced calculating PMPM costs, but I’m not entirely sure how to apply it here.