Financial Analysis: Summarize a plan for reimbursement and payor sources to consider in your practice. Describe in detail how your assigned practice will determine fee for services. Discuss in detail profit versus loss for a 3-year initial start-up period. Attach Excel 3-year start-up analysis.
The Business will be a Internal Medicine Business consisting of 3 Nurse Practitioner (1 as one as owner), 2 LPN, 2 secretaries. The building size is 1500 sqft with Lab (Quest) will be contracted out and will provide free supplies for Pap smears and urinalysis, the building will have 6 exams room.
Payor sources are Medicare, Medicaid, self pay, and Aetna. Visit fee is $180 routine. Also the business is located in Alaska which is a independent state for NPs to practice.
Business Plan/Financial Projection
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Business Plan/Financial Projection
So many considerations go into planning a healthcare facility start-up. Financial budgeting and planning are vital aspects of the process that must be adequately considered. They give a reliable forecast on the financial implications of the process and the gains or losses associated with such a move. This paper will give an overview of the aspects of the financial planning and projection process that should be considered by providing a case study of a health facility startup.
Determination Fee for Services
Various methods are applied to determine the fee for various services in a healthcare facility. For this facility, the unilateral price-setting method will be used. This will require the initiators to do some market research and benchmarking in the nearby hospitals within the region to know the prices that are currently being charged for various services (Barber, Lorenzoni, and Ong, 2020). Thereafter, the hospital will compare its current financial standings and budget and set prices that can generate profits. The focus will be on national/state prices and settle on below-average costs to give the facility a competitive edge (Benzing, 2018). Add-on payments will be included to ensure broader public health goals like access and equity. Information about cost, volume, and outcomes will be considered in the process to allow adjustments in case other factors, such as hospital location, type or size, patient complexity, and teaching activities affect costs (Barber, Lorenzoni, and Ong, 2020).
Profit versus loss for a 3-year initial start-up period
This is a provider-based health facility start-up in Alaska. Capital for fixed assets includes building the clinic, furniture and equipment to set up the clinic operation, required work permits and licenses, and the salaries and wages required. In the first year of business, the facility will account for the initial investment of starting and establishing the hospital before accounting for the profits made. In the subsequent years, only the cost for running the facility, such as utility coats, purchase of equipment, maintenance, and miscellaneous costs will be accounted for before calculating the profits. The break-even point (BEP) is the point at which total cost and total revenue are equal. This calculation show that the clinic will be making losses, making it hard to calculate the breakeven point.
Attach Excel 3-year start-up analysis
References
AssetsAmerica. (2020). How Much Does it Cost to Build a Hospital? Assets America. https://assetsamerica.com/how-much-does-it-cost-to-build-hospital/
ALASKA Policy Forum. (2020). Alaska has the Highest Per-Person Spending on Healthcare. https://alaskapolicyforum.org/2020/04/healthcare-spending-high/
Barber, L. S., Lorenzoni, L., and Ong, P. (2020). Price setting and price regulation in health care Lessons for advancing Universal Health Coverage, WHO. https://www.oecd.org/health/health-systems/OECD-WHO-Price-Setting-Summary-Report.pdf
Benzing, J. C. (2018). Rural Health Clinic Start-up – Business Plan. https://www.mgma.com/MGMA/media/files/fellowship%20papers/2019%20Fellows%20Papers/Rural-Health-Clinic-Start-Up-Business-Plan.pdf?ext=.pdf
Graham, A. (2021). How Much Does It Cost to Build a Hospital? FIXR. https://www.fixr.com/costs/build-hospital
nationalgrid. (2021). Managing Energy Costs in Hospitals. https://www9.nationalgridus.com/non_html/shared_energyeff_hospitals.pdf
Salary.com. (2021). Medical Secretary Salary in Anchorage, Alaska. https://www.salary.com/research/salary/benchmark/medical-secretary-salary/anchorage-ak