Business Case
In the present report an effort will be made for the purpose of analysing the various costs and the revenue that are going to be incurred and generated by way of operating a Physiotherapy clinic.
Immense value will be created in respect of the Local Health District from this. The reason of this is due to the unavailability of the Physiotherapy services in the nearby area. The inhabitants had to travel long distances for the purpose of getting the service (Todini et al., 2018).
The present report analyse the revenue that is being generated and the cost that is going to be incurred in case of opening a special department that is associated with the physiotherapy treatment of the patients of the hospital.
The Local Health District will be able to garner a significant profit and revenue out of it. Previously the patients had to travel long distances for the purpose of getting decent physiotherapy service (Erikson, 2015). The travel that had to be done by them involved both their time and cost.
The introduction of the same at the locality and in the premise of the hospital will ensure that the revenue of the hospital is increased and the patients are being able to avail the benefits within their locality.
Presently the hospital is not providing any sort of specialised physiotherapy treatment to its patients. Due to the lack of the requisite human resource and the initiative on the part of the hospital the center could not be established till now. Consequently the patients are currently travelling long distance to get their treatments done (Cleverley, 2017). This is actually detrimental to their well-being, as the travel that they are being forced to undertake is causing additional stress in their muscles and the benefit of the treatment that they are receiving is neutralised. Hence it is of utmost importance that the hospital should open up a department that solely deals with physiotherapy (Carroll& Smith, 2016).
The proposal that is being made in this case suggests the hospital to open up a physiotherapy centre at the hospital. The proposal states that the primary function of the department will be to ensure that the servicewhich is being provided by the department is of specialised nature and the quality of the care and treatment that is being provided is up to the market standard(Beith et al., 2017). The hospital has to ensure that the costs incurred by it for the purpose of commencing the functions of the department is duly recovered from the increased revenue that will be generated from the increasing number of patients visiting the hospital.
Expected Benefits
One of the most significant aims of the entire project is to ensure that implementation of specialised center by the hospital can play a significant role in the near future. The hospital will have to ensure that by opening up a completely new department can solve the current issues that the patients are dealing with. The primary aim of the hospital is to ensure that the costs that are incurred by the patients in this respect are reduced simultaneously while offering the standard service that is expected by the patients (Dabbs et al., 2018). It is important for the hospital to ensure that break-even point is being reached in a considerable period of time. The efficiency and the effectiveness of the organisation’s service providing capability will be improved, if it engages with the provision of the services by opening a new department that will solely be concerned in this respect. The revenue that will be generated by the hospital will increase consistently when the hospital will start to gain the expected efficiency in this regard. If the hospital engages in the provision of the services at lower prices and without hampering the quality of the service that is being offered by the hospital then the efficiency of the operations of the hospital will be improved significantly (Verguet et al., 2015).
- Efficiency gains:
One of the most significant improvements regarding the efficiency and the performance of the hospital will be the quality of service that is being offered to the patients of the hospital. As the entire human resource that will be acquired or arranged by the hospital for the purpose of delivery of physiotherapy will be engaged to perform that sole job, the effectiveness and the efficiency by the way they provide the services will improve significantly (Rotz et al., 2017). The indirect costs that are being incurred by the entity will be allocated to the right department and this will improve the way by which the hospital records its overheads..
- Potential savings/increased costs:
The organisation at present is losing huge portion of the expected revenue due to the fact that the patients who are suffering from acute muscle pain and other ailments of similar nature are not getting the service and care that they want from the hospital. This non-availability is decreasing the patient footprint of the hospital and thereby affecting the revenue very adversely (Rotz et al., 2017). Hence, due to this the revenue that was being lost by the hospital was increasing every day. It was better for the organisation to ensure that the leakage was being blocked immediately for the purpose of ensuring that no extra opportunity cost is incurred by the hospital.
Resources Required
For the purpose of bridging the gap the hospital will have to incur capital expenditure in the starting period and thereafter the expenditure will be reduced gradually (Cashin, 2016). The capital expenditure that is being incurred by the hospital will ensure that corresponding revenue makes up for that in a very short period of time. Some of the expenditure that will be included in the capital expenditure are connection of electricity, the water supply etc. The cost of the hospital will also be increased due to the inclusion of some variable expenses like repair and maintenance, building rent, depreciation etc.
What are the expected benefits of this proposal?
|
Factor |
Benefits |
|
Patients |
Patients are the primary receiver of all the benefits that are going to accrue out of the project. The reason being that all the new developments are to be done in accordance with the fact that the goal is to keep the quality consistent and to serve the customers in the best way possible. In the previous case the non-availability of a specialist barred the patients from getting the care that they expected from the hospital (Scheffler et al., 2018). After an entire department has been allocated for this specific area will increase the satisfaction that is being received by the patients. |
|
Facility |
The facility itself will experience a face lift off. The introduction of the care will ensure that new equipments, chairs and furniture, expansion of the area of operation of the hospital is all improved. This will result in increasing the operational ability of the facility and thus the quality of the service that is being provided by the hospital. |
|
Clinicians |
The clinicians who will be hired or the existing ones that are transferred to the new department will have to take special training in this elide. This will significantly improve the quality of the service that is being provided by them and the knowledge base that they possess. |
|
Risk Issue |
Severity |
Impact |
Mitigation Plan |
Notes |
|
Financial risk |
The severity involved in the risk is very high. The reason of that is the amount of funds required for the purpose is very high. |
The expenditure will increase the financial burden of the hospital. |
All the sources must be considered for the purpose of taking the loans or arranging finance from other sources. |
The main aim should be the reduction of the financial burden. |
|
Patients |
There is moderate risk associated with the number of patients that are going to come. |
The numbers of the patient will directly influence the revenue that is being generated by the entity. |
The hospital must ensure that the quality of the service provided is maintained throughout. |
The aim should be to increase the customer footprint. |
|
Insurances |
The risk involved with the risk is very low. |
The hospital will have to incur an additional expenditure of insurance for the new place and the equipment’s purchased by it. |
The cheapest insurance product must by the selected by the hospital. |
Insurance will guard the hospital from any accident and sever loss in the future due to the accident. |
- Action:
For the purpose of overlooking and monitoring all the activities related to the commissioning of the project a specialised team will have to be formed. The qualification and the training of the present human resource available with the hospital will have to be overviewed. All the costs and the corresponding revenue that is being generated will have to be listed out properly (Andrews et al., 2017). Also there will be a requirement to hire financial advisors concerned with the provision of financial services.
The resources that are going to be required for the purpose of effectively and efficiently conducting the operations of the hospital will include the following items:
- a) Physiotherapist:
The most important part of the resources will be constituted by the physiotherapist that is going to be hired by the hospital (Abel-Smith, 2016).
- b) Massage creams:
For the purpose of conducting the physiotherapy massage cream will be required. This will be regarded as an accessories of the center.
- c) Security system:
As a completely new department is going to open, a security system will have to be put in place. This will ensure to take care of the internal control of the new department (Buckley et al., 2016).
- d) Electricity:
New electricity connection will have to be obtained for the new department.
For the purpose of determining the cost that are going to be incurred in respect of the entire project, experienced and trained professionals will be hired. The primary responsibility of the professional will be to report to the management about all the information that is being gained in respect of the costs that are going to be incurred for the hospital and the corresponding revenue that is going to be generated by the hospital (Alebachew et al., 2014).
The break-even analysis of the entire project has been made for thepurpose of providing the requisite financial information that is related to the particular project. The entire break even analysis will enable the hospital to ensure that clear information is being provided in respect of the cost that are going to be incurred for the purpose of ensuring that breakeven point is being reached by the hospital in a very short period of time (Mittal, 2018). With the inclusion of all the relevant costs that are going to be incurred by the hospital for the purpose of generation of the revenue the decision making process of the management will improve.
References
Abel-Smith, B. (2016). An introduction to health: policy, planning and financing. Routledge.
Alebachew, A., Hatt, L., Kukla, M., &Nakhimovsky, S. (2014). Universal health coverage measurement in a low-income context: An Ethiopian case study.
Andrews, R. J., Khan, T. M., & Crisp, N. (2017). Physicians, poverty, and profits: can Robin Hood finance health care in developing countries?. World neurosurgery, 99, 786-789.
Beith, A., Wright, J., & Ergo, A. (2017). The link between provider payment and quality of maternal health services: Case studies on provider payment mechanisms in Kyrgyz Republic Nigeria and Zambia.
Buckley, N., Cuff, K., Hurley, J., Mestelman, S., Thomas, S., & Cameron, D. (2016). Should I stay or should I go? Exit options within mixed systems of public and private health care finance. Journal of Economic Behavior & Organization, 131, 62-77.
Carroll, N. W., & Smith, D. G. (2016). Addressing the healthcare finance faculty shortage: Perspectives and paths forward. Journal of Health Administration Education, 33(2), 311-319.
Cashin, C. (2016). Health financing policy: the macroeconomic, fiscal, and public finance context. World Bank Publications.
Cleverley, W. O. (2017). Essentials of health care finance. Jones & Bartlett Learning.
Dabbs, D. J., Serdy, K., Onisko, A., Clark, B. Z., Bhargava, R., Smalley, S., …&Brufsky, A. M. (2018). Abstract P4-08-04: The clinical utility of oncotypeDx for patients with recurrence scores of 10 or less: A value based pathology study of tumor histopathology and outcomes analysis in an integrated delivery and finance health system.
Erikson, S. L. (2015). Secrets from whom? following the money in global health finance. Current Anthropology, 56(S12), S306-S316.
Mittal, R. (2018). Frail Elderly, Inconspicuous Finance System, Complex Healthcare: Are We Realists or Optimists?. Journal of the American Medical Directors Association.
Rotz, S., Fraser, E. D., & Martin, R. C. (2017). Situating tenure, capital and finance in farmland relations: implications for stewardship and agroecological health in Ontario, Canada. The Journal of Peasant Studies, 1-23.
Scheffler, R. M., Hoang, D. D., &Shortell, S. M. (2018). Proposal to Use Three Initiatives to Lower Healthcare Spending and Finance Universal Health Insurance Coverage in California.
Todini, N., Hammett, T. M., &Fryatt, R. (2018). Integrating HIV/AIDS in Vietnam’s Social Health Insurance Scheme: Experience and Lessons from the Health Finance and Governance Project, 2014–2017. Health Systems & Reform, 4(2), 114-124.
Verguet, S., Olson, Z. D., Babigumira, J. B., Desalegn, D., Johansson, K. A., Kruk, M. E., … &Memirie, S. T. (2015). Health gains and financial risk protection afforded by public financing of selected interventions in Ethiopia: an extended cost-effectiveness analysis. The Lancet Global Health, 3(5), e288-e296.
World Health Organization. (2015). WHO report on the global tobacco epidemic 2015: raising taxes on tobacco. World Health Organization.
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