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Scenario MDVIP is a group of primary care physicians that offers a non-traditional pricing structure. Traditional primary care physicians do not charge an annual fee. They charge only visit fees. MDVIP charges a fee of $1,800 a year to each patient plus fees for each visit. If you do not see a doctor during the year, the fee is not refundable. The fee is not covered by health insurance. The average number of visits annually to a MDVIP physician is 10 Both the MDVIP and Traditional physician charge $65 a visit. A traditional physican sees an aveage of 33% of their patients a year. Of these active patients the average number of visits is 2 The group practice originally had 6,000 patients. After introducing the $1,800 fee the practice shrank to 300 patients. But, patients time with a doctor on each visit has increased from 10 minutes on average to 45 minutes on average. Also, most patients can be seen the day they ask to visit a doctor. In most cases, a traditional practice will ask patients to wait at least 24 hours if not a week or longer. 1 What is MDVIP’s cost efficiency compared to a traditional physician? 2 What is the customer responsiveness of MDVIP compared to a traditional physician? 3 What is the quality of MDVIP compared to traditional practices, where quality is time spent with the doctor?