Case Study Healthcare Finance

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1. Using the historical data as a guide, construct a pro forma (forecasted) profit and loss statement for the clinic's average month for all of 2014 assuming the status quo. With no change in volume (utilization), is the clinic projected to make a profit?

The below pro forma profit and loss statement states that the clinic is currently operating at a loss of $3,173 per month, considering that subtraction of fixed and variable costs. The contribution margin per month totals $48,138 or divided out equals to $35.67 per visit. The hospital is not sustaining itself at this point or even paying for its fixed costs.

2. Now consider the clinic's situation without the new marketing program. How many additional daily visits must be generated to break even? Construct a breakeven graph that can be included in your report.

Without the new marketing plan, the clinic will need an additional 19.8 - 20 patients each day to break even.

40.66(net revenue/visit)X =79,059
X= total number of visits that are needed to break even
X= 1944.39  1944  Average # of JanFeb 1,350 visits

3. Repeat the Question 2 analysis, but now assume that the new marketing program is implemented.

With the new marketing plan, the breakeven point is at an additional 32 patients visits per day.

40.66(net revenue per visit)X =93,861
(92,511-1350,)/30days= 31.94patients per day  32 patients per day

4. Now focus solely on the expected profitability of the proposed marketing program. How many incremental daily visits must the program generate to make it worthwhile? (That is, how many incremental visits would it take to pay for the marketing program, irrespective of overall clinic profitability?) Construct a breakeven graph.

Additional 25 visits per day are needed in order to make it worthwhile for having the marketing program.…...

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