McKinsey-Style Case 1 - Liberty Healthcare

MCKINSEY-STYLE PRACTICE
CASE #I
LIBERTY HEALTHCARE

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Case 1: Liberty HealthCare

1. Introduction and structuring question
Our client is Liberty HealthCare, a large health insurance firm based in the United States. Liberty
HealthCare sells health insurance policies to businesses, which in turn provide health insurance to
employees. While a large and reputable firm, our client has had stagnant revenue over the past five
years and is considering entering a new market – the individual health insurance market.

When an individual purchases a health insurance plan on the individual health insurance market, they
pay a monthly fee to the insurance company – which is called a premium – and in turn, the health
insurance company reimburses the individual for incurred medical costs.

In the individual health insurance market in the United States, plans are sold directly to consumers, and
Liberty Healthcare must sell different plans for each state. For example, the healthcare plans sold in
California cannot be purchased by Americans living in Texas. Liberty Healthcare must comply with two
additional major government regulations:

First, individual insurance plans must be available to all customers, regardless of health status, and all
customers pay the same price – whether healthy or terminally ill – this is the guaranteed issue
requirement.

Second, the American government provides money to individuals making below a certain income so
they can afford their insurance in the form of government subsidies.
The CEO has hired your team to advise the client on whether or not to enter the individual health
insurance market.

What are the factors you would look at when advising your client on this decision?
[Note – at this point, you should take a break approximately 1-‐minute long to write down your answer to
this question, then spend between 2-‐3 minutes giving your answer to your interviewer when you are
ready.]
2. Quantitative question
Our client has decided to examine the customer segments in California to understand the likely incurred
medical costs of offering individual insurance plans. The client presented your team with data on the
customer segments and average medical costs for each segment in California.

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California: Segments of Average annual medical costs
customers likely interested in per segment, $
individual insurance plans 40,000
35,000
35,000
30,000
25,000
25%
Unhealthy 20,000
50% Young
and 15,000
Healthy
25% 10,000 7,000
Old and
healthy 5,000
1,000
0
Young and Old and healthy Unhealthy (of
healthy any age)

Assume that our client will acquire a mix of customers similar to the segments of customers likely
interested in individual insurance plans in California.

Based on the actual medical costs incurred by these segments, what is the average monthly price our
client will need to charge to break even on medical costs?

[Note – take time to solve this math question before answering. It is fine to ask your interviewer for 1
minute to set up the problem before providing an answer.]

3. Advanced quantitative question
Our client is also considering entering a second state – Texas.

In Texas, our client knows that 50% of the market is young and healthy. However, our client does not
have data on the market segment breakdown between the other two segments – the old and healthy,
and the unhealthy.

Assuming that the costs per segment are the same as they were in California, if our client wishes to keep
premiums under $1200 per month, what is the maximum percentage of our client’s customers that
could be unhealthy (with the final segment being old and healthy) for our client to break even on
medical costs?
[Note – take time to solve this math question before answering. It is fine to ask your interviewer for 1
minute to set up the problem before providing an answer.]

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4. Creativity question
Liberty Healthcare is considering changing how it sells its products by requiring customers to incur a
certain amount of healthcare costs on their own, before Liberty Healthcare would reimburse the
customers. The amount would be defined up front, and is called an annual deductible.
For example, if Liberty Healthcare required a $200 annual deductible, a customer who incurred $300 in
medical costs would only be reimbursed $100. After the customer has “paid” the deductible, all future
medical costs would be reimbursed by Liberty Healthcare.
Many of Liberty Healthcare’s competitors charge deductibles in addition to monthly premiums.

The client asked your team to advise on whether it would be a good idea to require customers to pay
their deductible before Liberty Healthcare reimbursed their costs.

What are three advantages and three disadvantages of Liberty HealthCare charging a deductible?
ready.]

5. Structuring question
Let’s assume that our client has reviewed the data and decided to sell insurance plans in the individual
insurance market.

Our client will need to select a state to target as the first market to enter.

The client asked your team for counsel on which state would be the best state for our client to enter.

What are the factors that you would look at when selecting which state would be the best option for our
client as Liberty HealthCare’s first state?
ready.]

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Our client decided to test how setting a certain price will affect customer segments who purchase
healthcare plans in a third state – Florida.

In Florida, let’s assume that Liberty HealthCare intends to charge $1000 per month in premiums.
When charging $1000 per month, Liberty HealthCare expects the following breakdown of customer
segmentation.
Average annual
Florida: medical
expected costs
customer Average annual medical costs
per segment, $
segmentaeon per segment, $
40,000 40,000
35,000
35,000
35,000
35,000
30,000
30,000
25,000 17%
20,000 Unhealthy 25,000
15,000 20,000
10,000 17% Old 7,000
and 66% young
15,000
5,000 1,000
healthy and
0 healthy 10,000 7,000
Young and Old and healthy Unhealthy (of
5,000
healthy any age) 1,000
0
Young and healthy Old and healthy Young and Old and healthy Unhealthy (of
Unhealthy (of any age) healthy any age)

If Liberty charged $1000 per month and acquired this customer segmentation, will Liberty be making a
profit? If so, how much profit? (For this question, assume that revenue from premiums above expected
medical costs is equal to profits.)
this question, then spend between 2-‐3 minutes giving your answer when you are ready.]

In Florida, Liberty is interested in raising their monthly premiums above $1000 per month, but knows
that increasing the premium cost will change the segmentation of customers who purchase healthcare
plans. For every 1% increase in premiums, Liberty Healthcare’s customer segmentation will change from
the baseline in the last question by increasing the percentage of ‘unhealthy customers’ by one
percentage point, and decreasing the percentage of ‘young and healthy customers’ by one percentage
point. The ‘old and healthy segment’ will be unchanged.

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For example, raising rates by 1% will change the expected customer segmentation to 65% young and
healthy (-‐1% from baseline), 17% old and healthy, and 18% unhealthy (+1% from baseline).

How high could our client raise premiums before they are no longer charging enough in premiums to
pay for expected medical costs?
ready.]
8. Creativity question
The government offers payment to low-‐income Americans so they can purchase healthcare in the
individual market in the form of a subsidy.

Despite this subsidy, Liberty HealthCare and other health insurance firms have seen that high numbers
of young and healthy Americans decline to purchase health insurance. Young and healthy Americans
incur less healthcare costs and prefer to pay expenses directly rather than paying monthly premiums.
Liberty HealthCare is required to charge the same rate to the young and healthy as it charges to other
segments.

Other than offering lower premium costs, what are ways that Liberty HealthCare could get more Young
and Healthy Americans to buy health insurance?
ready.]

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ANSWER KEY

Candidate scoring criteria: Each answer is scored by your interviewer on a scale from 0 to 3.

0 – Clearly below the bar: candidate’s answer is scattered, incomplete, or does not address the question.
1 – Below the bar: candidate’s answer partially addresses the question but is not structured and leaves
out key details.
2 – Strong: candidate’s answer is structured, comprehensive, communicated effectively and succinctly,
and meets the standards of an average consultant.
3 – Excellent: candidate’s answer is above the standard of an average consultant and is structured,
succinct, creative, and addresses the problem in a comprehensive manner.

To pass an interview, a candidate needs a mix of answers that score a 2 and answers that score a 3
throughout the case. There is no defined number that guarantees a pass, but if a candidate’s average
score per answer is a 2.5, they will likely pass the case.

1. What are the factors you would look at when advising your client on this decision?
This is a market entry case but with a twist – our client has to sell insurance plans for the same price,
even though customers incur very different levels of medical costs. U.S. readers probably recognize this
as a real business problem faced by insurance firms following the passage of the Affordable Care Act.
The first question that the interviewer will most likely ask you is a ‘structuring question’. This type of
question asks you to consider what factors you would look at to solve a problem. The primary thing that
your interviewer is testing is how organized and comprehensive you are.
When it’s not clear from the case prompt, I recommend that one of the factors you examine is: the
client’s goals. In a real client situation, the team spends time at the beginning of the project defining the
problem.
For a structuring question, your goal is to be MECE (mutually exclusive, collectively exhaustive – this
means to include all of the relevant answers, but do so in an organized manner so your answers do not
overlap) and creative. You also need to be succinct.
******* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’ ******

When advising our client on whether or not to enter the individual market, there are four factors I would
want to examine.
A. First, what are our client’s goals in entering the individual exchange market, such as:
a. Increasing revenue
b. Increasing profitability
c. Growing market share
d. Synergies between the client’s business health insurance line
e. Taking advantage of the government subsidies

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B. Second, how will our client acquire customers:
a. What is the cost of customer acquisition?
b. Do we have the financial ability to enter this market and start getting customers?
c. Do we have the team and personnel in place to acquire customers?
d. Can we leverage our current business health insurance sales to get customers?
e. How are customers buying insurance in the individual market today?
f. What are our competitors doing to acquire customers?
C. Third, once we acquire customers, what are our revenue opportunities:
a. Recognizing we have to charge the same for every customer, how much can we charge
in premiums?
b. How much are our competitors charging today?
c. Are the government subsidies a revenue opportunity?
d. Are there other revenue opportunities from partnering with medical providers?
D. Finally, what will be the costs of providing this insurance?
a. What are the segments of customers who will buy our insurance?
b. What are the expected medical costs for these customers?
c. How are these medical costs changing over time?
d. How will our firm partner with medical providers to provide reimbursements?
Of these factors, I think that the most important will be to understand the profitability of this market, so
I’d like to start with understanding the revenue & costs that our current competitors are seeing.
******* OTHER ANSWERS ******
The best way to score your own answer on a structuring problem as you complete this practice case is: if
you had 90% or more of the above factors, and your answer was organized and succinct, you likely
scored a ‘3’.
Score 2 -‐ If your answer had between 66% and 90% of the factors in the sample answer above, your
answer was likely a ‘2’ – or Strong.
answer was likely a ‘1’ – or Below the bar.
Score 0 -‐ If your answer had less than 50% of the above factors, your answer was likely a ‘0’ – or Clearly
Below the bar.
Your interviewer will also be grading you on how succinct you are and how effective you are as a
communicator. This will affect your score. For example, if you had 100% of the above factors, but you
took 5 minutes to explain your answer, and jumped around between categories, you would not get a ‘3’
– even though you addressed all of the right factors. Jumping around between categories, or repeating
factors can turn a ‘3’ answer into a ‘0’.
Likewise, if you provided only 60% of the above answers but did so in a succinct, organized manner, your
interviewer may bump the score for your answer up to a ‘2’.

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2. What is the average monthly premium our client will need to charge to break even on the
medical costs?
This is a simple math problem. As with all case interview math problems, recognizing the implications of
the answer is more important than the equation itself.

We know our client needs to charge the same for all customers, regardless of segment, but these
segments incur different costs.
To understand the monthly premium needed to break even on medical costs, I will look at the average
costs incurred based on segment proportion.
50% of the customers will be young and healthy ($1,000 per year), 25% old and healthy ($7,000 per
year), and 25% unhealthy ($35,000 per year).
The monthly premium needed to break even will be:
12X = 50%(1,000) + 25%(7,000) + 25%(35,000) or 12X = 11,000.

X=$916 [rounding to $900 or $915 is fine]
So our client needs to charge about $900 per month, based on this customer segmentation, to break
even.
Based on that number, I observe that:
• The young and healthy are paying a LOT more for insurance than their actual costs;
• The unhealthy are getting a very good deal.
It may be hard for our client to attract young and healthy customers, when they’re paying so much more
than they’re getting.

For a quantitative question, you likely scored a ‘3’ if you did three things: (A) you solved the math
correctly; (B) you identified the implications of the quantitative answer and told your interviewer before
they asked you; and (C) you communicated in a succinct, organized manner.
To score your own answer, you can assign a point for each of the above criteria.

Did you correctly solve the math question? – Add 1 point.

Did you identify the implications of the math answer? – Add 1 point.
Did you communicate your answer in an organized, succinct manner? – Add 1 point.
Combine the number of points you have to get your score.

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3. Assuming the costs per segment are the same as they were in California, if our client wishes to
keep premiums under $1200 per month, what is the maximum percentage of our client’s
customers that could be unhealthy for our client to break even on medical costs?
There is often a more complex math question that your interviewer will ask you if you pass the first
quantitative question.
Our goal is to determine the customer segment breakdown between the two segments we don’t know –
the unhealthy, and the old & healthy in Texas.
Because we know that 50% of Texas is Young and Healthy, and we know our targeted monthly premium,
we can set up the equation as:

12(months)*$1200 = 50%*$1,000 + X%*$7,000 + (50%-‐X%)*35,000
Or $14,400 = $500 + 7,000X + $17,500 – 35,000X
Or $14,400 = $18,000 – 28,000X
Or -‐$3,600 = -‐28,000X [simplify this to 36/280]
X = about 13%
X represented the old and healthy, so we know that the unhealthy segment needs to be no more than
about 37% for our client to break even on medical costs.
Based on this number, increasing the number of unhealthy customers has a significant impact on the
price we need to charge our customers. By having 12 percentage points more unhealthy, we had to raise
our rates by about 33% from the last problem ($900 vs. $1200).
It seems like a top priority for our client will be to find states that have profitable segments of customers,
or at least avoid situations where our client has large percentages of unhealthy customers.



Did you communicate your answer in an organized, succinct manner? -‐ Add 1 point.

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4. What are three advantages and three disadvantages of Liberty HealthCare charging a
deductible?
Your interviewer will be looking for plausible ideas, at least some of which are not obvious, and for those
ideas to be communicated succinctly. You should draw on information learned earlier in the case.
Sample advantages Sample disadvantages

Additional source of revenue (or reduction in More complicated than a straightforward
costs – either interpretation is fine) premium – will incur new costs to track customer
out-‐of-‐pocket expenses
Can encourage customers to not incur costs Could scare away the young and healthy –
because they have ‘skin in the game’ depending on deductible amount if they won’t
receive any benefits from having the insurance,
may not buy coverage
Allows more creative pricing – could we have If people avoid seeking healthcare in short term
different deductibles based on customer to not incur deductible costs, could increase long-‐
segments? term healthcare costs

Of these advantages, the most important seems to be getting an additional source of revenue for our
client. Because that additional source of revenue could allow our client to lower the price of its products,
I believe that the advantages outweigh the disadvantages, and our client should add a deductible to its
pricing.
For creativity questions, there is no single right answer. Any of the following responses would also be
acceptable and could lead to a ‘3’ score.
Advantages: (I) allow our client to lower monthly premiums to attract more customers; (II) could attract
a healthier market segment, because these customers are unlikely to use up their deductible
Disadvantages: (I) may be more difficult for our client to partner with medical providers because clients
will be less likely to pay their healthcare bills to doctors and hospitals out of their own pockets; (II) could
give competitors an advantage if they can advertise that our client is requiring a deductible while they
are not
To score your creativity answer:

Score 3 -‐ If you had three advantages and three disadvantages, at least 5 of which were listed above, you
stated them in a succinct, organized manner, and you told your interviewer which was the most
important factor, you likely scored a ‘3’.
Score 2 -‐ If you had three advantages and three disadvantages, at least 5 of which were listed above, you
likely scored a ‘2’.

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Score 1 -‐ If you came up with only two advantages OR only two disadvantages
Score 0 -‐ If you came up with only two advantages AND only two disadvantages, or fewer answers
5. What are the factors that you would look for when selecting which state would be the best
option for our client to select as Liberty HealthCare’s first state?
At this point, you’ve learned lots of information about the client and the market. The second factoring
question should be very tailored to this case and bring up data that has been discussed in earlier
problems.

When advising Liberty HealthCare on which state market to start with, I would look at four factors:
1. What are the different customer segments in that state:

a. What percent of the state’s population are likely to buy health insurance on the
individual market?
b. How many of these are young and healthy?
c. How many are old and healthy?
d. How many are unhealthy?
e. How does this customer segmentation compare to other states?
f. How fluid is this segmentation – does it change rapidly?
g. Are there any unique dynamics about the state that would make individual health
insurance more or less attractive to any of the segments?
2. What are the competitors charging:
a. Assuming our competitors are at least breaking even, what are they charging for
premiums?
b. Are they charging for deductibles?
c. Do the competitors’ prices take into account any federal subsidies?
3. How difficult will it be – and are there any barriers – to entering that state:
a. Are there any regulatory problems to entering that state market?
b. Will we have different advertising costs – or costs to acquire customers based on the
state?
4. Does Liberty HealthCare have any advantages in that state:
a. Are we already selling business insurance in that state?
b. Are we already advertising in the state – do customers know our brand?
c. Do we have offices in that state?

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Other acceptable answers would include:
-‐Capital costs required to enter the state
-‐Number of competitors per state
-‐How many medical providers there are in the state
-‐The cost of medical care in the state
The best way to score your own answer on a structuring problem as you complete this practice case is: if
you had 90% or more of the above factors, and your answer was organized and succinct, you likely
scored a ‘3’.
answer was likely a ‘2’ – or Strong.
answer was likely a ‘1’ – or Below the bar.
Score 0 -‐ If your answer had less than 50% of the above factors, your answer was likely a ‘0’ – or Clearly
Below the bar.
Your interviewer will also be grading you on how succinct you are and how effective you are as a
communicator. This will affect your score. For example, if you had 100% of the above factors, but you
took 5 minutes to explain your answer, and jumped around between categories, you would not get a ‘3’
– even though you addressed all of the right factors. Jumping around between categories, or repeating
factors can turn a ‘3’ answer into a ‘0’.
Likewise, if you provided only 60% of the above answers but did so in a succinct, organized manner, your
interviewer may bump the score for your answer up to a ‘2’.

6. If Liberty charged $1000 per month and gets the customer segmentation shown in the
diagram, will Liberty Healthcare be making a profit? If so, how much?

This is a straightforward math question. You should immediately observe that the customer
segmentation is MORE favorable to our client than the first state (as there are fewer unhealthy
customers), and the client is charging MORE per month than the $900 we found was needed to break
even in the prior math problem. This shows there will be healthy profit in this state.

Liberty will certainly be making a profit in this market. We know from California that charging about
$900 per month is breaking even when the unhealthy segment is 25%, and in this case, that segment is a
little less than 17% and our client is charging a higher premium.

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To calculate the level of profit, I will subtract the expected medical costs from the $1000 monthly
premium.

$1000 * (12 months) – (66% * 1000) -‐ (17% * $7,000) -‐ (17% * $35,000) = profits
Or
$12,000 -‐ ~$7,700 = $4,300
(Note – A candidate who tries to solve this by multiplying by fractions (e.g., 2/3) will get a slightly
different answer than one who multiplies by percentages (66%), and the difference does not matter.)

So our client would make an annual profit of about $4,300 per customer. We know that our baseline is
$12,000 in revenue, so this profit would be a little more than 33%.

My observation from this number is that this seems like a high profit margin, and I would wonder if the
competitors are charging less. I also observe that this analysis relied on the young and healthy incurring
only $1,000 in medical costs but paying $12,000 for insurance every year. This seems risky.




7. How high could our client raise premiums before they are no longer charging enough in
premiums to pay for expected medical costs?
Here is an example of a quantitative problem that seems more complicated than it is. It is very common
in cases for the math to appear daunting, but there is usually a simple solution. Always be looking for an
easier way to solve it.

We know that when Liberty HealthCare raises its rates, it changes its segmentation, and in a costly way.

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Today, our client is making a $4,300 gross profit while charging a $1,000 monthly premium. But every
time they raise rates by 1%, they lose a percentage point of young and healthy, and gain a percentage
point of unhealthy.
To figure out how much they can raise rates before they are no longer making a profit, I want to
understand what happens financially with every 1% rate increase.
Impact of changing segments:
The young and healthy cost our client $1,000 per year. The unhealthy cost our client $35,000 per year.
So every percentage point change, we are seeing a net increase in annual costs of 1% times $34,000 –
the difference between the two rates. So the annual effect of making this change is a $340 cost to our
client per customer.
Comparison to profit:
We were making a $4,300 gross profit, so it seems like we could incur this cost about 13 times ($340 * 13
= $4420) before we are no longer breaking even.
However, we also know that we are raising rates by 1% every time this segmentation change takes place,
so we have more revenue coming in.
Every time revenue is raised by 1%, we are gaining approximately an extra $120. So that extra $120 in
revenue partially offsets our new costs of $340.
The net change of raising prices by 1% is ($340-‐$120) $220. We know that we were making $4300 in
gross profits before raising prices, so that’s just about twenty times $220.
Therefore, our client could raise rates by about 20% before losing money from medical costs.
My observation from this number is that if every percentage point increase in price costs our client
money, why doesn’t our client look at lowering prices to attract more young & healthy customers?



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8. Other than offering lower premium costs, what are ways that Liberty HealthCare could get
more Young and Healthy Americans to buy health insurance?
This is a creativity question that is very open-‐ended. There’s no suggestion for number of responses. For a
question like this, you should have at minimum four ideas – better to have more.
You want to strike a balance between being creative, while not suggesting bad or wild ideas. Don’t say
things like, “Liberty HealthCare could host a cruise for the young and healthy to encourage them to
purchase health insurance,” even though, technically, that is an idea.
But don’t be afraid to think outside the box. Host a cruise? Weird idea. Target the young and healthy at
outdoor sporting events where they are likely to congregate? Creative and clever.
An EXCELLENT response to this question will acknowledge what we learned earlier: the young and
healthy are an attractive segment because they pay much more in premiums than they incur in expenses.
But that also means that we are asking them to act outside their immediate financial interests by buying
insurance.

We’ve learned that there is a significant financial benefit to attracting the young and healthy. Increasing
the number of young and healthy and decreasing the number of unhealthy by only one percent can have
a big impact on Liberty HealthCare’s bottom line.
Our challenge is that we need this population to subsidize our other segments. Some ideas for attracting
young and healthy:
1. Motivate the young and healthy – tell them they might get sick with targeted advertising
a. While it’s true that the young and healthy don’t incur many medical costs, they might
not always stay young and healthy. We need to convince them that there is a risk that
they become unhealthy, in which case they’re far better off with health insurance.
b. We can target the young and healthy in our advertising – advertise at fitness centers and
outdoor sporting events where our ads are more likely to be seen by the young and
healthy.
2. Sell by channels the young and healthy use
a. We need to make sure that our sales process is what the young and healthy are looking
for – it should be accessible, and leverage the tools that young people use to shop, such
as sales online.
3. Offer other perks – giveaways for customers who don’t incur expenses
a. We know that we can’t change our premiums to attract more young and healthy. But
are there other perks we could offer? Could we offer prizes for people who incur the
lowest amount of medical expenses; gift-‐cards for people who sign up for gym
memberships or quit smoking?

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4. Target states with lots of young and healthy
a. We learned that there is a sizeable difference in the number of young and healthy by
state. Our client could target the states that have the highest percentage of young and
healthy customers.

For creativity questions, there is no single right answer. Any of the following responses would be also be
acceptable and could lead to a ‘3’ score:
-‐Hire insurance agents and incentivize them for selling plans to the young and healthy;
-‐Offer referral bonuses to the young and healthy who refer friends to purchase insurance;
-‐Pursue partnerships with other businesses that sell to the young and healthy, such as fitness
centers.

To score your creativity answer:

Score 3 -‐ If you had 4 or more ideas that were communicated in a succinct, organized manner.
Score 2 -‐ If you had 3 ideas that were communicated in a succinct, organized manner, OR if you had 4 or
more ideas that were not communicated in a succinct, organized manner.
Score 1 -‐ If you had 2 ideas.
Score 0 -‐ If you had 1 or 0 idea.

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Calculating your final score:

Add up all of your points from the case.
21-‐24 points – clear pass
17-‐20 points – potentially pass
16 points and below – did not pass

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Case 1: Liberty HealthCare

Our client is also considering entering a second state – Texas.

******* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’ ******

******* OTHER ANSWERS ******

******* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’ ******

The monthly premium needed to break even will be:

12X = 50%(1,000) + 25%(7,000) + 25%(35,000) or 12X = 11,000.

Based on that number, I observe that:

******* OTHER ANSWERS ******

Or $14,400 = $500 + 7,000X + $17,500 – 35,000X

Or $14,400 = $18,000 – 28,000X

Or -­‐$3,600 = -­‐28,000X [simplify this to 36/280]

******* OTHER ANSWERS ******

******* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’ ******

Sample advantages Sample disadvantages

******* OTHER ANSWERS ******

To score your creativity answer:

******* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’ ******

1. What are the different customer segments in that state:

Other acceptable answers would include:

-­‐Capital costs required to enter the state

-­‐Number of competitors per state

-­‐How many medical providers there are in the state

-­‐The cost of medical care in the state

******* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’ ******

******* OTHER ANSWERS ******

******* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’ ******

Impact of changing segments:

Comparison to profit:

******* OTHER ANSWERS ******

******* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’ ******

Score 1 -­‐ If you had 2 ideas.

Score 0 -­‐ If you had 1 or 0 idea.

Calculating your final score:

21-­‐24 points – clear pass

17-­‐20 points – potentially pass

16 points and below – did not pass

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* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’

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* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’

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Or -‐$3,600 = -‐28,000X [simplify this to 36/280]

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* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’

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-‐Capital costs required to enter the state

-‐Number of competitors per state

-‐How many medical providers there are in the state

-‐The cost of medical care in the state

* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’

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* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’

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* SAMPLE EXCELLENT RESPONSE THAT WOULD SCORE A ‘3’

Score 1 -‐ If you had 2 ideas.

Score 0 -‐ If you had 1 or 0 idea.

21-‐24 points – clear pass

17-‐20 points – potentially pass