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Feasibility an Urgent Care Center Essay Example
Use this to answer the three questions at the bottom of the page, SHOW ALL WORK
COSTS: Urgent Care Center
All costs and revenues are per year
- Labor Cost
- 5 Primary Care Physicians Salary$150,000 $750,000
- 8 RN/BSN Salary Salary $64,000 $512,000
- Payroll Taxes (all employees) $ 327,400
- Benefits (all employees) $1,893,000
- Other Variable Costs
- Supplies & Misc. Overhead$102,400
- Advertising$35,000
- Capital Cost
- Annualized Building Cost$465,403
- Annualized Equipment Cost$ 93,081
- Other Fixed Costs
- Insurance$341,295
- Legal$ 232,701
- Administrative$ 418,873
- Administrative Fee to Franchise$120,000
TOTAL VARIABLE COST$3,619,800
TOTAL FIXED COST$ 1,671,343
REVENUES: Urgent Care Center
Each for the five (5) primary care physicians can see 3200 patients in a year, at an average annual fee per patient of $300.
Question 1: Feasible Range for the Urgent Care Center
In order to justify our scale of operation we must be able to attract enough patients to be inside the feasible range of production. The feasible range is governed by the way productivity changes as more staff must share the fixed resources. Unfortunately it is rare for detailed information about productivity to be available to decision-makers. However because of the one-to-one correspondence between productivity and cost, we can see the boundaries of the feasible range reflected in our variable costs, and these costs are always available to decision makers on a detailed and up-to-date basis.
Step 1: Find Average Variable Cost by dividing the Total Variable Cost by the total number of patients served by all FIVE physicians, given under Revenues.
Step 2: The fee per patient is also given under Revenues. Does the fee per patient cover the Average Variable Cost?
Question 2: Breaking Even for the Urgent Care Center
In the short run it is enough to establish that your scale of operation is justified, but in the long run we have to cover our capital costs as well as our labor and other variable costs.
Step 1: Find the Total Cost by summing the Total Variable Cost and Total Fixed Cost.
Step 2: Find the Average Total Cost by dividing Total Cost by the total number of patients served by four physicians.
Step 3: Does the fee per patient cover the Average Total Cost?
QUESTIONS THAT NEED ANSWERED ARE BELOW AND SHOW ALL WORK
Question 1: Feasibility of Urgent Care Center (SHUT DOWN POINT: PRODUCE OR DO NOT PRODUCE/SHUT DOWN)
Step 1: Find Average Variable Cost (AVC)
Step 2: Does the fee per patient cover Average Variable Cost? (COMPARE PRICE AND AVC, WHICH DETERMINES THE SHUT DOWN POINT)
Question 2: Breakeven for the Urgent Care Center
Step 1: Find Total Cost (TC)
Step 2: Find Average Total Cost (ATC)
Step 3: Does the fee per patient cover Average Total Cost? (COMPARE PRICE AND ATC, WHICH DETERMINES THE BREAK EVEN POINT, IN WHICH ECONOMIC PROFITS = 0)
Question 3: Economic Profit for the Urgent Care Center
Step 1: Find Total Revenue (TR)
Step 2: Calculate Economic Profit.
Solution
Feasibility Study of an Urgent Care Center
- Executive Summary: This feasibility study assesses the viability of establishing an urgent care center in a specific location. It evaluates market demand, financial projections, regulatory considerations, and operational requirements to determine the feasibility of the project.(Feasibility an Urgent Care Center Essay Example)
- Introduction: An urgent care center provides immediate medical care for non-life-threatening illnesses and injuries. It aims to bridge the gap between primary care and emergency room services, offering convenient and timely care to patients.(Feasibility an Urgent Care Center Essay Example)
- Market Analysis:
- Demographics: Analyze the target area’s population, age distribution, income levels, and insurance coverage to gauge potential patient base.
- Competitive Landscape: Identify existing urgent care centers, primary care providers, and hospitals in the area.
- Market Demand: Survey potential patients to understand their preferences for urgent care services and their willingness to pay for such services.(Feasibility an Urgent Care Center Essay Example)
- Location Selection:
- Accessibility: Choose a location with easy access, high visibility, and proximity to residential and commercial areas.
- Parking: Ensure ample parking space for patients and staff.(Feasibility an Urgent Care Center Essay Example)
- Zoning Regulations: Confirm that the chosen location complies with local zoning regulations for medical facilities.
- Financial Projections:
- Revenue Generation: Estimate patient visits per day, reimbursement rates from insurance providers, and potential out-of-pocket payments.
- Cost Analysis: Evaluate startup costs (facility setup, equipment, staffing, marketing), ongoing operational costs (rent, utilities, salaries, supplies), and overhead expenses.(Feasibility an Urgent Care Center Essay Example)
- Profitability: Calculate projected revenue and expenses to determine the break-even point and expected return on investment (ROI).
- Operational Plan:
- Staffing: Define the required medical staff (physicians, nurse practitioners, nurses) and administrative personnel (receptionists, billing staff).
- Operating Hours: Determine optimal operating hours to cater to patient needs while maintaining cost-efficiency.
- Medical Equipment and Supplies: List and budget for necessary medical equipment, supplies, and technology (X-ray machines, diagnostic tools, electronic health records).(Feasibility an Urgent Care Center Essay Example)
- Patient Flow: Design the patient flow process, from check-in to examination and discharge, to optimize efficiency and patient satisfaction.
- Quality Assurance: Establish protocols for medical care, infection control, and patient safety.
- Regulatory Compliance:
- Licensing and Accreditation: Identify the required licenses and accreditations to operate as a healthcare facility.
- Healthcare Regulations: Ensure compliance with federal, state, and local healthcare regulations, including privacy laws (HIPAA) and medical waste disposal regulations.(Feasibility an Urgent Care Center Essay Example)
- Marketing and Outreach:
- Branding and Identity: Develop a brand identity that communicates professionalism and reliability.
- Community Engagement: Plan outreach efforts to inform the community about the center’s services, benefits, and convenient location.
- Online Presence: Establish a user-friendly website, social media profiles, and online booking systems to enhance accessibility and visibility.(Feasibility an Urgent Care Center Essay Example)
- Risk Assessment:
- Financial Risks: Consider potential revenue fluctuations, unexpected expenses, and changes in reimbursement rates.
- Competition: Evaluate the impact of existing urgent care centers and other healthcare providers on patient flow and revenue.(Feasibility an Urgent Care Center Essay Example)
- Legal and Regulatory Risks: Address potential liability issues and legal challenges related to medical care and compliance.
- Conclusion: Based on the comprehensive analysis of market demand, financial projections, operational requirements, regulatory considerations, and potential risks, the establishment of an urgent care center in the chosen location appears to be feasible. The projected benefits of convenience, quality care, and financial sustainability support the viability of this endeavor.(Feasibility an Urgent Care Center Essay Example)
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