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Running Head: Beverly Sports Medicine Center Patel 1
BEVERLY SPORTS MEDICINE CENTER
ANNUSHREE PATEL
HEALTH CARE FINANCE
NE...
Beverly Sports Medicine Center 2
Contents
Executive Summary………………………………………………………………………………3
Introduction…………………………………………………...
Beverly Sports Medicine Center 3
Executive Summary
Beverly, MA —Beverly Hospital will begin constructing a dedicated sport...
Beverly Sports Medicine Center 4
Introduction
Beverly Hospital in Beverly, Massachusetts is the North Shore’s leading heal...
Beverly Sports Medicine Center 5
Lahey Health Behavioral Services is a private, nonprofit human service agency that provid...
Beverly Sports Medicine Center 6
The services offered at Beverly Hospital are:
 Anticoagulation Management Service
 Arrh...
Beverly Sports Medicine Center 7
The decision to expand the Beverly Hospital’s offerings reflect community need and long t...
Beverly Sports Medicine Center 8
Back and Neck Pain
Low back pain can range from mild, dull, annoying pain, to persistent,...
Beverly Sports Medicine Center 9
Medial Epicondylitis
(Golfers and Baseball
Elbow)
Medial epicondylitis, also known as gol...
Beverly Sports Medicine Center 10
Sprains and Strains
The majority of sports injuries are caused by minor trauma involving...
Beverly Sports Medicine Center 11
Paul Peck
Vice-President, Information Systems
Gary Marlow
Vice-President, Finance
Eric B...
Beverly Sports Medicine Center 12
Northeast Hospital Corporation Officers
Howard R. Grant, JD, MD
President
Denis Conroy
C...
Beverly Sports Medicine Center 13
Sports Medicine Center has a clearly defined and identifiable market niche that enables ...
Beverly Sports Medicine Center 14
Marketing Mix
Beverly Sports Medicine Center’s marketing mix is comprised of the followi...
Beverly Sports Medicine Center 15
Perceived as a luxury service for elite athletes in the past, sports medicine has gained...
Beverly Sports Medicine Center 16
SWOT
Strengths
 Sports Medicine is a growing industry
 Beverly Hospital has a loyal cu...
Beverly Sports Medicine Center 17
The Financial Plan
Balance Sheet
2015 2014
Assets
Current
Cash and cash equivalents 1,50...
Beverly Sports Medicine Center 18
Income Statement
2015
Operating revenues:
Net patient service revenue 2,500,000$
Provisi...
Beverly Sports Medicine Center 19
Statement of Cash Flows
2015
Cash flows from operating activities:
Increase in net asset...
Beverly Sports Medicine Center 20
References
Guerrilla Marketing. (n.d.). Retrieved April 1, 2014, from http://www.gmarket...
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Health Care Finance_BEVERLY HOSPITAL_Business Plan

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Health Care Finance_BEVERLY HOSPITAL_Business Plan

  1. 1. Running Head: Beverly Sports Medicine Center Patel 1 BEVERLY SPORTS MEDICINE CENTER ANNUSHREE PATEL HEALTH CARE FINANCE NEWBURY COLLEGE
  2. 2. Beverly Sports Medicine Center 2 Contents Executive Summary………………………………………………………………………………3 Introduction………………………………………………………………………………………4 Health Services Offered………………………………………………………………..5-7 Sports Medicine Center………………………………………………………………..7-10 The Organizational Plan……...………………………………………………………………10-12 Mission…………………………………………………………………………………...12 The Marketing Plan…………………………………………………………………………..12-14 Marketing Mix…………………………………………………………………………...14 Industry Analysis & Industry Trends……………………………………………………15 SWOT…………………………………………………………………………………...16 The Financial Plan Balance Sheet……………………………………………………………………………17 Income Statement………………………………………………………………………..18 Statement of Cash Flows………………………………………………………………...19 References……………………………………………………………………………………….20
  3. 3. Beverly Sports Medicine Center 3 Executive Summary Beverly, MA —Beverly Hospital will begin constructing a dedicated sports medicine facility as an addition to its hospital. Construction of the 25,000-square-foot Beverly Sports Medicine Center should be complete by late 2014. The new building is a $10 million investment. The investment consists of the 25,000 square-foot building and medical equipment. The building will house a state-of-the-art sports medicine facility, which provides clinical care, rehabilitation services, and athletic performance training. Beverly Sports Medicine Center is going to recruit a team of specialists who are the most prominent practitioners of arthroscopic surgery and complex joint shoulder, elbow, knee and ankle reconstructions in the US. The Beverly Sports Medicine Center will treat full spectrum of sports-related and orthopedic conditions. Some conditions include Achilles tendon injuries, ankle sprains, cartilage injuries in the knee, golfer's elbow, ligament injuries to the knee (ACL, PCL, MCL & LCL injuries), osteoarthritis of the knee, shoulder or foot and ankle, etc. The new sports medicine facility will be a one-stop-shop for all sports medicine and athletic performance services including sports medicine, personal training, and sport specific training. The services of the Beverly Sports Medicine Center are being targeted to, but not limited to, the residents of the North Shore communities. Beverly Hospital has made the decision to investment in the sports medicine and athletic performance facility due to its confidence in its own consistently positive financial performance, the economic strength and continued growth. The lack of competition in the Beverly and surrounding towns has encouraged Beverly Hospital to investment in its future growth. Beverly Hospital is recognized for the care and services it provides to residents throughout the North Shore and is committed to ensuring that a full continuum of high quality, coordinated health and human services are available to those who live in its primary and secondary service areas. The Beverly Hospital, in close partnership with its affiliates, other health related service organizations, and the community at large, strive to develop programs and services that address community need and improve the area’s overall health status.
  4. 4. Beverly Sports Medicine Center 4 Introduction Beverly Hospital in Beverly, Massachusetts is the North Shore’s leading health care facility and is dedicated to meeting the healthcare needs of those living in North Shore community. Beverly Hospital is a full service, 221-bed, community hospital providing quality, patient-centered care to North Shore and Cape Ann residents. Services include maternity, pediatrics, surgical, orthopedics, cardiology, as well as several other specialties. The hospital has a medical staff of more than 500 physicians and its service area includes some 13 communities. The hospital is part of Lahey Health System, Inc. (LHS), a vertically and horizontally integrated network of hospitals, long term care facilities, assisted living facilities, health and social service agencies, and community based primary care and specialty care. LHS is recognized for the care and services it provides to residents throughout the North Shore and Cape Ann area and is committed to ensuring that a full continuum of high quality, coordinated health and human services are available to those who live in its primary and secondary service areas. The Beverly Hospital, in close partnership with its affiliates, other health related service organizations, and the community at large, strive to develop programs and services that address community need and improve the area’s overall health status. Two North Shore healthcare organizations, Lahey Clinic and Northeast Health System have affiliated, creating the new Lahey Health System. The essential branches of the Lahey Health System are Addison Gilbert Hospital, BayRidge Hospital, Beverly Hospital, Lahey Outpatient Center, Lahey Health Behavioral Services, and Lahey Health Senior Care. This new entity brings to the communities North of Boston an exceptional healthcare delivery system that is community-based and offers a full continuum of high-quality, cost-efficient services including primary care, outpatient, acute care, home health, senior health, and behavioral health. Addison Gilbert Hospital is a full-service, 58-bed medical/surgical acute care facility. The hospital provides inpatient and outpatient care to residents of the Cape Ann community in specialties such as cancer care, surgical day care, critical care and emergency medicine. BayRidge Hospital provides accessible, high-quality mental health and substance abuse treatment. The 62-bed hospital offers a continuum of psychiatric and chemical dependency services on an inpatient, partial hospitalization and outpatient basis. Coordination of care between Beverly Hospital's psychiatric services, the Leland Unit, and BayRidge Hospital assures the provision of a range of acute inpatient services to individuals suffering from psychiatric disabilities. Lahey Outpatient Center, Danvers is an outpatient facility with state-of-the-art care centers and specialty services. The facility includes multidisciplinary centers for Breast Health, Cardiovascular, Infectious Disease, Pain Management, and Spine care among others. The Day Surgery Center has four operating rooms featuring the latest in minimally invasive technologies for all types of conditions. The Lifestyle Management Institute offers several comprehensive programs designed to address healthy options for individuals coping with chronic conditions.
  5. 5. Beverly Sports Medicine Center 5 Lahey Health Behavioral Services is a private, nonprofit human service agency that provides mental health, substance use and community education and prevention services to residents in greater Boston, the North Shore and the Merrimack Valley, Massachusetts. Services include outpatient mental health clinics; inpatient and outpatient treatment and prevention for drug and alcohol problems; school-based programs; and community-based education and prevention initiatives. Our compassionate and professional staff provides integrated, high-quality care to families, children, teens and adults. Lahey Health Senior Care provides a complete continuum of care for seniors. The Center for Healthy Aging offers seniors a multidisciplinary outpatient treatment center and an array of diagnostic services. It also has assessment programs in memory loss, balance and risk of falls, incontinence, palliative care, and driving ability. Additional senior services include skilled nursing and short-term rehabilitation through Ledgewood and Seacoast. Assisted living is provided through The Herrick House. Home care is coordinated through North Shore PRN and Northeast HomeCare; adult day services for people living with Alzheimer's through the Spectrum Adult Day Health Program, personal emergency response service through Lifeline, community care management through NortheastLink and educational programs through Senior Outreach. Health Services Offered Beverly Hospital is committed to provide its patients and their family members with both first- class medical care and world-class attention. The Hospital’s wide array of healthcare services combines the latest advances in medicine with a truly remarkable and refreshing level of warmth and compassion. It's what sets Beverly Hospital apart . . . and whether you are seeking services for primary or diagnostic care, emergency or surgical care, inpatient or rehabilitative care . . . the professionals are all about taking care of the whole person.
  6. 6. Beverly Sports Medicine Center 6 The services offered at Beverly Hospital are:  Anticoagulation Management Service  Arrhythmia Service  Audiology  Cancer Service  Cardiac Diagnostics (Holter Monitor, Stress Testing, Stress Echo)  Cardiac Interventional Services (Cath Lab, Electrophysiology)  EEG  EKG  Electromyography (EMG)  Emergency Services  Endoscopy  Gastroenterology  Hematology/Oncology Care Center  Inpatient Acute Care Services (General Med/Surg Units, Critical Care)  Labor and Delivery  Laboratory  Lactation Consultation  Mammography  Medical Daycare Services  Mohs Surgery Clinic  Newborn Nursery  North Shore Birth Center  Pacemaker  Parent & Childbirth Education  Perinatal Clinic  Postpartum Care  Psychiatric Services, Inpatient (Leland Unit) & Outpatient  Radiology Services  Rehabilitation & Sports Medicine  Special Care Nursery  Surgical Services (Day & Inpatient Surgery, Pre-admission Testing)  Vascular Lab  Wound & Hyperbaric Medicine Center (Cummings Center in Beverly) The services offered by the Beverly Hospital serve a wide array of community needs. After assessing additional needs in the community and the health care market – the Board of Directors have decided to broaden the services offered. The leaders of the medical staff worked with trustees and management to craft the Request for Proposal document for adding a Sports Medicine division to the Beverly Hospital. A Physician Advisory Committee was formed and continues to work in conjunction with the Beverly Hospital leadership team on the expansion process.
  7. 7. Beverly Sports Medicine Center 7 The decision to expand the Beverly Hospital’s offerings reflect community need and long term viability and vitality as a community health care provider in a dramatically changing health care industry environment. This was a decision made from a position of strength. As a well-managed, financially stable, and nationally recognized leader in quality of care, the Beverly Hospital was able to be thoughtful and deliberate. With the addition of the Sports Medicine division, Beverly Hospital is creating an exceptional health care delivery system of high-quality, cost-efficient, community-based care for the people of northeastern Massachusetts – one that is capable of managing patient care in accordance with changing community needs and new payment and health care delivery systems. This is truly a change for the better, building strength upon strength. Beverly Hospital community members are going to continue to receive personalized and effective care. Sports Medicine Center The Lahey Health System will benefit from the Beverly Sports Medicine Center, provided at the Beverly Hospital. The Beverly Sports Medicine Center will provide medical care to athletes and non-athletes of all ages, victims of work-related accidents and senior citizens. The medical professionals, including doctors and rehabilitation therapists, hired for the Sports Medicine division will be experts in managing athletic injuries and treating injuries of the shoulder, elbow, hip, knee, ankle and foot. The goal of the Beverly Hospital’s expansion into Sports Medicine is to help people remain healthy and active in their entire lives. Beverly Hospital is going to recruit a team of specialists who are the most prominent practitioners of arthroscopic surgery and complex joint shoulder, elbow, knee and ankle reconstructions in the US. The Beverly Sports Medicine Center will treat full spectrum of sports- related and orthopedic conditions. Some conditions include Achilles tendon injuries, ankle sprains, cartilage injuries in the knee, golfer's elbow, ligament injuries to the knee (ACL, PCL, MCL & LCL injuries), osteoarthritis of the knee, shoulder or foot and ankle, peroneal tendon injuries, rotator cuff tears, shoulder instability, shoulder tendonitis and bursitis, tennis elbow, throwing injuries of the shoulder and elbow, torn ligaments, and turf toe. Table 1.1 – Conditions and Procedures Arthritis Arthritis and other rheumatic diseases are characterized by pain, swelling, and limited movement in joints and connective tissues in the body. Avascular Necrosis Avascular necrosis is a disease that may cause bone or joint collapse as a result of loss of blood supply to the bone due to injury or other causes (such as long-term use of certain medications).
  8. 8. Beverly Sports Medicine Center 8 Back and Neck Pain Low back pain can range from mild, dull, annoying pain, to persistent, severe, disabling pain in the lower back that restrict mobility. Neck pain is pain that occurs in the area of the seven cervical vertebrae in the neck area. Elbow Pain and Problems Common elbow problems include the following: arthritis - common forms of arthritis, bursitis, fractures, and injury. Fractures A fracture is a partial or complete bone break. When a fracture occurs, it is classified as either open or closed. Knee Pain and Problems Many knee problems are a result of the aging process and continual wear and stress on the knee joint (i.e., arthritis). Other knee problems are a result of an injury or a sudden movement that strains the knee. Lateral Epicondylitis (Tennis Elbow) Lateral epicondylitis, also known as tennis elbow, is characterized by pain in the back side of the elbow and forearm, along the thumb side when the arm is alongside the body with the thumb turned away. The pain is caused by damage to the tendons that bend the wrist backward away from the palm. Ligament Injuries to the Knee Ligament injuries to the knee include injuries to one of the four knee ligaments (elastic bands of tissue that connect bones to each other). Lumbar Disc Disease (Herniated Disc) Lumbar disc disease occurs in the lumbar area of the spine. As discs degenerate, fragments of the disc material can press on the nerve roots located just behind the disc space, causing pain, numbness or changes in sensation. Lumbar Strain (Weight Lifter's Back) A lumbar strain is an injury to the lower back, which results in damaged tendons and muscles that spasm and feel sore.
  9. 9. Beverly Sports Medicine Center 9 Medial Epicondylitis (Golfers and Baseball Elbow) Medial epicondylitis, also known as golfer's elbow, baseball elbow, suitcase elbow, or forehand tennis elbow, is characterized by pain from the elbow to the wrist on the palm side of the forearm. Neck Pain The neck is located between the head and the shoulders. Because of its location and range of motion, it is often left unprotected and subject to injury. Osteoarthritis Osteoarthritis is a chronic, degenerative, joint disease characterized by the breakdown of joint cartilage and adjacent bone in the neck, lower back, knees, hips and/or fingers. Patellar Tendonitis (Jumper's Knee) Patellar tendonitis, also known as jumper’s knee, is a condition caused by inflammation of the tendon connecting the kneecap to the shin bone, often caused by overuse of the knee joint. Patellofemoral Stress Syndrome (Runner's Knee) Patellofemoral stress syndrome is a condition common among runners involving knee pain caused by irritation of the cartilage of the kneecap. Rotator Cuff Injury An injury to the rotator cuff, such as a tear, may happen suddenly when falling on an outstretched hand or develop over time due to repetitive activities. Shoulder Dislocation Dislocation of the shoulder means the displacement of the upper arm bone (humerus) out of the shoulder joint. Soft-Tissue Injuries Many activities can lead to soft-tissue damage of muscles, ligaments, and tendons.
  10. 10. Beverly Sports Medicine Center 10 Sprains and Strains The majority of sports injuries are caused by minor trauma involving muscles, ligaments, and/or tendons, including contusions (bruises), sprains and strains. Torn Meniscus Meniscus tears can occur during a rotating movement while bearing weight, such as when twisting the upper leg while the foot stays in one place during sports and other activities. The Organizational Plan Beverly Hospital's leadership team is guided by the hospital's mission to deliver innovated, high quality family-centered care for the North Shore community. Our leaders are dedicated to making decisions to further our hospital's reach into our diverse population and to assist each community member in achieving the highest level of health regardless of race, color, creed, national origin, disability, age, or ability to pay. Beverly Hospital Denis Conroy Chief Executive Officer, Northeast Health System Steven Defossez, M.D. President, Medical Staff Phil Cormier Chief Operating Officer, Northeast Hospital Corporation Peter H. Short, M.D. Chief Medical Officer, Northeast Hospital Corporation Kim Perryman, MMHC, RN, NE-BC Chief Nursing Officer Cynthia Cafasso Donaldson Vice-President, Addison Gilbert Hospital Althea Lyons Vice-President, Human Resources and Development Lisa Neveling Vice-President, Program Development, Office of Business Development
  11. 11. Beverly Sports Medicine Center 11 Paul Peck Vice-President, Information Systems Gary Marlow Vice-President, Finance Eric Berger Vice-President, Supply Chain Kevin Norton Chief Executive Officer, Lahey Health Behavioral Services Jennifer Gizmunt Interim Senior Vice President & Chief Operating Officer, Lahey Health Senior Care Board of Trustees Northeast Hospital Corporation Nancy Palmer, Chair Robert Irwin George Burke Paul McConnell Steven Defossez, MD Kurt Melden David DiChiara, MD Paul Muniz Alexander Doumas, MD Paul Lundberg Charles Favazzo Hugh Matthew O'Flynn, MD Christopher George Jagruti Patel, MD Howard R. Grant, JD, MD Hugh Taylor, MD
  12. 12. Beverly Sports Medicine Center 12 Northeast Hospital Corporation Officers Howard R. Grant, JD, MD President Denis Conroy CEO Timothy O'Connor Treasurer David Spackman, JD Secretary Gary Marlow Assistant Treasurer Maryellen Lear Assistant Secretary Mission Beverly Hospital – Sports Medicine Center is dedicated to providing comprehensive multidisciplinary care to athletes of all ages and abilities, from professional athletes to eager novices. The Sports Medicine Center team of professionals will provide innovative care by leading ground-breaking research in the lab and clinic, and by delivering the best care for each athlete's unique needs. The Marketing Plan Marketing Objectives  To quickly achieve measurable market penetration.  Create the brand image within the operating area of Beverly, Massachusetts Financial Objectives  A double-digit growth rate for the first three years.  Increase the revenues by 3% a quarter. Target Markets The initial target markets are communities North of Boston. The focus of the market is Beverly, Massachusetts and towns with in a 25 mile radius.
  13. 13. Beverly Sports Medicine Center 13 Sports Medicine Center has a clearly defined and identifiable market niche that enables highly targeted and efficient marketing of its services. Positioning The Beverly Sports Medicine Center will be centralized at the Beverly Hospital in Beverly, Massachusetts. Beverly Sports Medicine Center will have both a quality and cost advantage relative to its less flexible competitors. Beverly Sports Medicine Center will leverage its competitive edge: Unmatched Customer Attention: beyond the fact that the entire organization adopts a customer- centric approach to business, all of Beverly Hospital service offerings concentrate on providing the customer with the exact type of plan to meet their particular needs. Costs Advantages: A key advantage of setting up Beverly Sports Medicine Center as an extension of the Beverly Hospital’s existing practice is a reduction in overhead per hour. Beverly Sports Medicine Center is able to offer top-quality services at a reasonable price by negotiating with existing vendor of the Beverly Hospital. The new division staff can utilize the existing relationships that the Hospital has with its current vendors. Strategy Pyramids The single objective that Beverly Sports Medicine Center faces is to position itself as the premier sports medicinal care provider, gaining significant market share within five years. The marketing strategy will seek to first create customer awareness regarding Beverly Sports Medicine Center’s offered services and develop the customer base. The message that Beverly Sports Medicine Center will generate is that it offers the highest quality/cost ratio for sports medicine services in the North Shore Communities. This message will be communicated through a variety of methods. The first will be an advertising campaign. This campaign will primarily use the Boston Globe and Boston Harold, but other media sources will be employed. The method of communication will be a direct mailing campaign. The mailings will target residents of Beverly, Lynn, Peabody, and Danvers. The surrounding three towns are within a 12 mile radius to Beverly Hospital. Existing patients at the Beverly Hospitals will be contacted via telephone to update them on the changes coming to the Beverly Hospital.
  14. 14. Beverly Sports Medicine Center 14 Marketing Mix Beverly Sports Medicine Center’s marketing mix is comprised of the following approaches to pricing, distribution, advertising and promotion, and customer service. Pricing The pricing for a specific procedure will be based on the allocation of professional staff members’ time. Competitive pricing will be offered to patients that utilize the Lahey Health System hospitals for their primary care. Pricing of services will be minimal, the first three years, in order to attract patients to seek care at Beverly Sports Medicine Center. Pricing strategy is key to developing a loyal, customer base. Distribution Distribution will occur through the use of Beverly Hospital’s direct marketing program. Exclusive distribution will be utilized by the Center. Exclusive distribution limits distribution of sports medicine and related services to only Beverly Hospital. This type of distribution was chosen in order to sustain the quality of the services being provided by the Beverly Sports Medicine Center and to centralize the disbursement of services to Beverly Hospital. Promotion Beverly Sports Medicine Center will be using a multi-pronged marketing strategy to develop brand awareness and achieve market penetration.  Media relations. Design a comprehensive plan for contacting and maintaining relationships with select members of the media including newspaper, magazine and TV broadcasts.  Print advertising in medical journals and newspapers.  Other advertising such as billboards and broadcast advertising on radio, TV, and cable TV.  Public speaking and conferences – Beverly Sports Medicine Center’s medical staff will participate in panels at professional association meetings, conferences, and other events to make the public aware of the services that the Beverly Hospital has to offer.  Marketing collateral such as newsletters, brochures, and fliers will be distributed throughout the Beverly Hospital and to other Lahey Health Clinic hospitals. Customer Service The entirety of Beverly Hospital operates on a customer-centric business model, ensuring exceptional customer attention. With its longstanding culture of specialized teams directly available to individual patients, and a work ethic that combines the highest competence with the utmost compassion, Beverly Hospital is unique among medical centers because the Beverly Hospital team does more than care for the patient. They treat the patient right. Industry Analysis & Industry Trends
  15. 15. Beverly Sports Medicine Center 15 Perceived as a luxury service for elite athletes in the past, sports medicine has gained wide public acceptance and has become more accessible to most Americans in recent years. Sports medicine focuses on the diagnosis, treatment and prevention of injuries and illnesses resulting from sports, exercise or recreational activities. The Sports Medicine Practitioners industry has been relatively resilient even during the recession. Annual revenue for the Sports Medicine Practitioners industry is $21 Billion with 21,301 businesses practicing the medicine. Nearly 140,932 Americans are employed by the Sports Medicine Practitioners industry. Rising sports participation will further boost industry performance contributing to an annual growth rate of 2.8%. Barriers to entry into the Sports Medicine Practitioners industry are medium. The most notable entry barriers include educational and training requirements, residency review committees and regulation. In addition, operators must develop a critical mass of patients to be viable competitors. Depending on the specialty and location, it can be difficult or take considerable time for new entrants to establish a referral base and other relationships with other physicians, hospitals and the local community. Although several barriers exist to new entrants, the large number of small establishments in the industry indicates that barriers are not extreme. This may be due to low levels of fixed capital costs in the industry and the high demand for sports medicine services. Beverly Hospital’s venture into the Sport Medicine industry will be advantageous and profitable. First, the industry trends depict the positive growth annually for the coming decade. Second, the benefits of the Beverly Sports Medicine Center outweigh the costs. Beverly Sports Medicine Center will develop a customer base far quicker than the industry average; the Center will immediately generate revenue from the current patients of Beverly Hospital.
  16. 16. Beverly Sports Medicine Center 16 SWOT Strengths  Sports Medicine is a growing industry  Beverly Hospital has a loyal customer base  Increase revenue for the Beverly Hospital  Low start-up costs  Location – Beverly, MA makes it convenient to serve the North Shore Communities  Beverly Hospital has the capital to invest in a Sports Medicine Center  Philanthropic donations to Beverly Hospital  Affiliation with the Lahey Health Systems  Low competition Weaknesses  New venture for the Beverly Hospital  For the first three years Beverly Hospital will spending portions of its revenues to make the Center profitable  Management may be ill prepared for the venture  Hiring qualified medical professionals Opportunities  Sports Medicine industry is growing rapidly at 2.8% annually  Sports Medicine industry is a $21 B industry  Sports participation is on the rise  Lahey Health System has other hospitals with Sports Medicine Centers  Beverly Hospital has the capital for investment  Lahey Health Systems has a loyal customer base  Beverly Hospitals is within 12 miles of Danvers, Salem, Peabody, Marblehead, Swampscott, Lynn, Middleton, Ipswich, Lynnfield, Saugus, North Reading, Wakefield, Reading, Melrose, and Gloucester Threats  Competitive industry  Sports Medicine North is a longstanding competitor – locations in Peabody, Newburyport, Middleton, Manchester, and Gloucester  Limited space availability in Beverly Hospital for the Sports Medicine Center  Hefty investment  Risky venture – using the Beverly Hospital revenue for the first three year to sustain the Center
  17. 17. Beverly Sports Medicine Center 17 The Financial Plan Balance Sheet 2015 2014 Assets Current Cash and cash equivalents 1,500,000$ 1,000,000$ Short term investments 300,000$ 250,000$ Patient accounts receivable, net of allowance for doubtful accounts 154,500$ 150,000$ Other receivables 25,000$ 25,000$ Prepaid expenses 350,000$ 500,000$ Total Current Assets 2,329,500$ 1,925,000$ Long-Term Investments 45,000$ 65,000$ Assets limited as to use, held by trustee, net of current portion 1,060,000$ 1,200,000$ Property and equipment, net 2,500,000$ 1,750,000$ Other assets 25,500$ 15,000$ Total Assets 5,960,000$ 4,955,000$ Liabilities & Net Assets Current Liabilities Accounts payable & accurued liabilites 375,000$ 450,000$ Accurued salaries and related benefits 400,000$ 350,000$ Third-party payor settlements 55,000$ 75,000$ Self-insurance reserves 175,000$ 150,000$ Total Current Liabilities 1,005,000$ 1,025,000$ Long-Term Liabilities Notes Payable 2,500,000$ 2,600,000$ Self-insurance reserves, net of current portion 300,000$ 250,000$ Long-term debt, net of current portion 100,000$ 125,000$ Total Long-Term Liabilities 2,900,000$ 2,975,000$ Total Liabilities 3,905,000$ 4,000,000$ Net Assets Unrestricted 1,750,000$ 750,000$ Temporary restricted 250,000$ 150,000$ Permanently restricted 55,000$ 55,000$ Total Net Assets 2,055,000$ 955,000$ Total Liabilities & Net Assets 5,960,000$ 4,955,000$
  18. 18. Beverly Sports Medicine Center 18 Income Statement 2015 Operating revenues: Net patient service revenue 2,500,000$ Provision for doubtful accounts (55,000)$ Net patient service revenue less provision for doubtful accounts 2,445,000$ Premium revenue 90,000$ Other revenue 35,000$ Net assets released from restrictions used for operations 2,500$ Total operating revenues 2,572,500$ Operating expenses: Salaries and benefits 1,500,000$ Professional services 70,000$ Supplies 100,000$ Purchased services 20,000$ Depreciation and amortization 5,000$ Interest 50,000$ Expense recoveries from related parties (25,000)$ Total operating expenses 1,720,000$ Income from operations 350,000$ Interest and investment income 50,000$ Excess of revenues over expenses 400,000$ Other changes in unrestricted net assets: Net assets released from restrictions used for: Purchase of property and equipment 10,000$ Noncontrolling capital distribution, net (5,000)$ Increase in unrestricted net assets 5,000$ Changes in temporarily restricted net assets: Contributions and other 25,000$ Investment income 1,500$ Net assets released from restrictions for: Operations (4,500)$ Purchase of property and equipment (7,000)$ Increase in temporarily restricted net assets 15,000$ Changes in permanently restricted net assets: Increase in permanently restricted net assets 100,000$ Increase in net assets 1,000,000$ Net assets, beginning of the year 955,000$ Net assets, end of the year 2,055,000$
  19. 19. Beverly Sports Medicine Center 19 Statement of Cash Flows 2015 Cash flows from operating activities: Increase in net assets 1,100,000$ Adjustment to reconcile increase in net assets to - net cash provided by operating activities (6,500)$ Depreciation and amortization 5,000$ Provision for doubtful accounts 55,000$ Change in fair value of interest rate (60,000)$ Unrealized (gains) losses in investments (101,000)$ Realized gains on investments (500)$ Contribution received for long lived assets or endownment and net equity (75,000)$ Changes in operating assets and liablities: Patient accounts receivable (200,000)$ Due to related parties 25,000$ Other receivables, inventory, other assets - prepaid expenses 20,000$ Accounts payable, accrued liabilities and pension liablities (65,000)$ Accrued salaries and related benefits 50,000$ Third-party payor settlements (20,000)$ Self-insurance reserves (25,000)$ Cash provided by operating activities 702,000$ Cash flows from investing activities: Purchases of investments (75,000)$ Sales of investments 55,000$ Increase in assets limited as to use (4,000)$ Purchases of property and equipment (200,000)$ Cash used in investing activities (224,000)$ Cash flows from financing activities: Payment of long-term debt and capital lease obligations (40,000)$ Contributions received for long lived asstes or endowment - and net equity transfers to/from related parties 62,000$ Cash provided by financing activities 22,000$ Net (decrease) increase in cash and cash eqivalents 500,000$ Cash and cash equivalents, beginning of year 1,000,000$ Cash and cash equivalents, end of year 1,500,000$
  20. 20. Beverly Sports Medicine Center 20 References Guerrilla Marketing. (n.d.). Retrieved April 1, 2014, from http://www.gmarketing.com/articles/149-do- you-have-a-promotion-plan Home Health Care Services Business Plan. (n.d.). Retrieved April 5, 2014, from http://www.bplans.com/home_health_care_services_business_plan/management_summary_fc.ph p Marketing Mix (4p's): Place/Distribution Strategies. (n.d.). Retrieved April 5, 2014, from http://www.learnmarketing.net/place.htm Massachusetts General Hospital. (n.d.). Retrieved April 6, 2014, from http://www.massgeneral.org/ortho/services/treatmentprograms.aspx?id=1290 Massachusetts Hospital & Medical Centers | Beverly Hospital. (n.d.). Retrieved April 6, 2014, from http://www.beverlyhospital.org/ NEWS ADVISORY. (n.d.). Retrieved April 6, 2014, from http://www.olmmed.org/about/news/2013/smap-construction/ Sports Medicine Practitioners in the US: Market Research Report. (n.d.). Retrieved April 6, 2014, from http://www.ibisworld.com/industry/sports-medicine-practitioners.html

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