This week you will continue working on creating a Business Plan for a new health care organization. Please read the requirements of this discussion board carefully as it varies from our usual format. Page 312 of the eText explains that the following items are addressed in the Income Statement Assumptions section of a business plan: Revenue type/Revenue source(s) Revenue amount (e.g., as determined based on per patient, per visit, per month, per grant amount) Labor expenses Supply expenses Cost of drug or device expenses (if applicable) Equipment expenses Space occupancy expenses (e.g., rent, utilities) Overhead (insurance, etc.) For your original post: (1) remind us about your new health care business, (2) address the values that you have determined/assumed for each of the items above, and (3) explain how you came to determine/assume the values for each of the items listed above.
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Introduction:
As a medical professor, one of my responsibilities is to prepare and evaluate the assignments and exams for medical college students. In this assignment, students are required to create a business plan for a new healthcare organization. The following are my answers to the provided questions.
1) Remind us about your new healthcare business:
The business plan for our new healthcare organization is centered around a community-based clinic that focuses on providing affordable primary care services to the underprivileged population. The clinic aims to provide a range of services, including preventative care, chronic disease management, and health education.
2) Address the values that you have determined/assumed for each of the items above:
Revenue type/Revenue source(s): The clinic will generate revenue through fee-for-service payments, insurance reimbursements, and grants. The revenue generated from fee-for-service will make up 60% of the total revenue, insurance reimbursements will make up 20%, and grants will constitute the remaining 20%.
Revenue amount: The revenue generated per patient visit will be $80. The clinic expects to serve around 2,000 patients in the first year, resulting in a total revenue of $160,000.
Labor expenses: The clinic will employ one physician, two nurses, and three administrative staff. The salary for the physician will be $150,000, the nurses will be paid $60,000 in total, and the administrative staff will be paid $90,000 in total.
Supply expenses: The supply expenses per patient visit are estimated to be $10, resulting in a total supply expense of $20,000 for 2,000 patient visits.
Cost of drug or device expenses (if applicable): The clinic plans to offer a limited number of prescription drugs and devices. The estimated cost for these items is $2,000.
Equipment expenses: The clinic needs to purchase basic medical equipment such as examination tables, blood pressure monitors, and other supplies. The estimated cost for this equipment is $20,000.
Space occupancy expenses (e.g., rent, utilities): The clinic will lease a facility and will pay $60,000 annually in rent and utility expenses.
Overhead (insurance, etc.): The estimated overhead expenses for the clinic are $10,000.
3) Explain how you came to determine/assume the values for each of the items listed above:
The values for each of the items were determined after conducting extensive research and analyzing the cost and revenue drivers for a community-based clinic. The revenue percentages were determined based on the expected behavior of insurance providers and grants, while the revenue per patient visit was based on the regional average for the services provided by the clinic.
The labor expenses were determined by taking into account the average salaries for the positions, as well as the expected workload for the staff members. The supply expenses were estimated based on the current market rates for medical supplies, and the cost of drugs and devices was based on the average prices of the items needed.
The equipment expenses and rent were based on the regional averages for the market, and the overhead expenses were determined by taking into account the various insurance premiums and other costs associated with running a healthcare organization.
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