How to Manage a healthy healthcare business designed for Chief Executives and Operating Officers of Healthcare Organizations like Hospitals, HMOs , Diagnostics

1. DR OLUFEMI AINA
MANAGING A HEALTHY
BUSINESS
Aesculapius Healthcare
Consultants

2. Day 1
 Introduction and Course Objectives
 Pre-Test
 Overview and Introduction to Medical Practices as
Business
 Business Simulation Module 1
 Setting Business Goals and Planning
 Pricing of Medical Services

3. Introduction
 Trainers
 Participants

4. Course Objectives
 Financial Management as a Tool to monitor Private
Practice.
 Construct Financial Statements from Financial
Information from Medical Practice.
 Understand how to use Service Mix and Pricing
Structure.

5. Course Objectives
 Conduct Breakeven Analysis to Calculate
Profitability of their New Services.
 Set Specific Goals for their Medical Practice.
 Learn Different Financing Options

6. Goal of SHOPs Training
 To Compile And Analyze Financial Reports To Be
Able To Measure The Financial Health Of A
Medical Practice And Determine Options For
Growth And Expansion

7. Overview and Introduction to Medical
Practices as Business
There are 3 types of Organizations
 Government- Social Profit
 Private Business- Financial Profit
 NGOs/Religious Organizations- Welfare Profit

8. Business Environment
Government
Competitors
Employees
Community
Suppliers
MD
Clients
Financial
Institutions

9. What is Financial Management?
Financial Management is Analyzing and Reviewing
the Financial Information of a Business to be able to:
 Measure the Current Health of the Business or
Practice .
 Make appropriate decisions to Improve Performance

10. Business Simulation 1
Lessons To Learn:
 Learn Basic Business Cycle
 Allocate income between Business, Personal Expenses and
Savings
 How to cope with unforeseen expenses
 Considerations for selling on credit
 Importance of maintaining positive cash flow
 Importance of keeping records

11. Learning Points from Simulation 1
 Poor Documentation
 Poor Cash Management
 Failure to Understand the Business
 Lack of Investment Strategy
 Poor Risk Management
 Poor Planning
 Poor Banking

12. Planning for Improved Financial
Health
Planning is the Process of Identifying :
 What you want to do?
 Where you want to take your Practice?
 How you will get there.
Planning answers these Questions:
What, When, Where, Why, Who, How
Goal Setting is crucial to Planning

13. Planning for Improved Financial
Health
 You need to Understand Yourself, your Practice and
your Environment.
Do this by conducting a SWOT Analysis:
 Strength
 Weakness
 Opportunities
 Threats

14. Setting Business Goals
Goals must be SMART;
 Specific
 Measurable
 Attainable
 Realistic
 Time-bound
Goals can be Financial, Operational, Marketing,
Product and Service Goals

15. Pricing of Services
Factors that Affect Price include:
 Demand
 Competition
 Location
 Type of Customers
 Quality
 Exclusivity of Products/Services
 Costs of Offering your Products/Service

16. Setting Prices
 Selling Price of Services = Direct Costs +
Proportion of Indirect Operating Costs
Indirect Overhead Costs:
Simple Allocation Method- using Mark-Up
Proportional Allocation Method

17. Day 2
 Business Simulation Module 2
 Financial Statements
 Conducting a Breakeven Analysis
 Access to Finance
 Evaluation and Post test

18. Business Simulation 2
Manufacturer Sells to;
 Sally’s Store(maximum of 3/week)- $80
 Retailer- Negotiable
 Facilitator- $200 after spinning
Retailers Sells to;
Facilitator- based on selling slide

19. Learning Points from Business
Simulation 2

20. Lessons Learned
 Relationship between Supply and Demand
 How to estimate market size and demand to plan
production and purchases
 Importance of Building Good Relationship with
Business Partners
 Keeping concise records to help with financial
planning

21. Financial Statements
 Simple Accounting Worksheet- Pg 22
 Cash Flow Statement-
 Income Statement
 Balance Sheet

22. Cash Flow Projection
 Shows When and How Much Money is coming into
the Business
 How Much Money is expected to flow out of the
Business over a period of time
 Shows if there is additional money for Investment
 Shows how much can be used to replenish Stock

23. Cash Flow Statement
Factors that affect Cash Flow include;
 Fluctuation in Sales
 Bulk Purchases
 Purchases and Sales made on Credit
 Additional Investments
 Taking a Loan

24. Income Statement
 Records Financial Information OVER TIME and
shows if a Business made Profit or Loss over Time
 Businesses must have an adequate record of all
expenses or costs, they incurred to deliver their
Services
 Income Statement helps compare Information over
Time

25. Balanced Sheet
 Provides a SNAPSHOT of the Business at a specific
time
 It’s a Picture of all the Assets and Liabilities of the
Business
 It is like an X-Ray
 It shows what the Business OWES and what it
OWNS

26. Expansion Strategies
and Competition
Your Expansion Strategies should focus on the
following:
 Products/Services
 Pricing
 Promotion
 Place
You must think about what your Competitors are
doing in deploying your Strategies.

27. Expansion Questions
 What do our Clients want?
 What Price are they willing to pay?
 Who is our Competition?
 How can we differentiate our Services from our
Competitors

28. Expansion Steps
 Identify your Typical Client
 Estimate Number of Clients in your Community
 Differentiate Services from Competitors e.g. Counseling
Services, Better Customer Service, Shorter Waiting Time,
Price, Better Quality of Equipment and Technology
 Determine Service Mix- combination of Products and
Services you can package together

29. Conducting a Breakeven Analysis
 Breakeven Point is the Point which a Service will
generate Profit or incur a Loss
 It’s a point at which all Expenses paid out for a
Service equals all Income earned by the Service
 Breakeven Sales = Indirect Costs + Direct
Costs

30. Contribution Margin
 Contribution Margin= Sales- Direct Costs
 It gives an idea of what each Sale contributes to
covering the Indirect Costs and making a Profit
Desired Sales
(Indirect Costs + Desired Profits)
Contribution Margin(%)

31. Access to Finance
Equity:
 Savings
 Profit Reinvestment
 Outside Investors
Leasing
Supplier Credit
Loans

32. Evaluation and Post-Test