Decision Tree Question Your hospital faces considerable revenue uncertainty because you have to negotiate contracts with

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Decision Tree Question
Your hospital faces considerable revenue uncertainty because you
have to negotiate contracts with several health insurance
companies. You forecast a 10% chance your total inpatient revenue
from Florida blue will be $456,000, a 20% chance that your
inpatient revenue from Medicare will be 575,634, a 30 percent
chance that your inpatient revenue from Medicaid is 300,000, a 40
percent chance that your will get 60% back of your bad debt
(600,000) from Medicaid disproportionate share dollars program.
Your costs are also uncertain, as the prices of your supplies
fluctuate considerably. You forecast a 40 percent chance that your
costs will be $400,000 and a 60 percent chance that your costs will
be $250,000. Use Excel to set up a decision tree for your profit
forecast (it does not matter whether costs or revenues come
first).
* Setup for Decision Tree