Healthcare Facility startup
Case Study
The St. Francis Care Clinic healthcare facility is developed to assist in meeting current health care demands and to improve access of care for residents in this community. The healthcare facility aims at providing safe, effective, timely, equitable and patient centered care to patients from diverse backgrounds. The primary care services will be provided by nurse practitioners (NPs) who will offer different experience to provide holistic care, open communication, therapeutic listening, and skills in counseling (Pinson, 2008).
The facilities vision is to deliver affordable and high quality of care to patients in order to promote the health as well as the well being of the citizens. The healthcare facility will seat on 1500 Square feet commercial office (leased). The facility has only one direct primary care clinics and 12 physicians. The indirect competitors are two emergency departments found in the one local medical center.
The competitor’s strengths are that the local medical centers have established physician providers with established referrals process. The critical key to success of this clinic is public education on services health services delivered and in managing reimbursement procedures (Buppert, 2014).
Monthly cost estimation
| Expenses | Cost ($) |
| Clinical sites expenses | 53,000 |
| Supplies | 25,000 |
| Employee structure and expenses | 72,450 |
| Malpractice insurance | 60,050 |
| Utilities and overhead expenses | 14,695 |
| Accounting fee | 20,000 |
| Continuing education expenses | 13,435 |
| Total | 258, 630 |
The clinic start up expenses will be obtained from a business loan of $100,725 with interest of 9% that will be paid out over 7 years. Although the clinic is expected to be profitable, the cash revenue is expected to remain negative until year 3. The loan repayment in the first year interest is estimated to be $10, 824.
The cost of operations in year 1 is estimated to be 120,121 and sales of $154,000, indicating a small profit in year 1. With addition of more healthcare services in year 2, the operating income is expected to reach $60,662, and the trend is expected to increase in the subsequent years.
The business is expected to grow and expect more income as the loan diminishes. The fixed costs are expected to remain the same with little or no depreciation. On the other hand, the variable cost will increase with increase income. I will contribute $50,000, bringing the total start up expenses to $150, 725.
The healthcare services that will be delivered in this clinic include primary care such as physical examinations, diagnosing, screenings, treatment as well as management of chronic and acute healthcare disorders. Other services that will be provided include preventive care, immunization, diabetes management, HIV/AIDs and smoking.
The facility will accept all public medical covers such as State Children’s Health Insurance Program (SCHIP), Medicaid and private medical covers. The Medicaid reimbursement will be calculated based on rate per unit, whereas the commercial insurances will be based on the company’s own policy. Managed care organizations will be reimbursed based on the negotiated contracts (Sally and Reel, 2013).
Summary
In summation, the estimated costs and assumptions indicates that the clinic is a viable nurse managed healthcare setting. The start up of this healthcare facility will require funding from loan and adequate time to return the amount of money borrowed. However, the projected revenue and expenditures indicates that small profit will be made. To reduce the negative cash flow, I may consider looking for partners or applying for grants so as to reduce the start up expenses.
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