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IHP450 Final Project.pptx
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- 2. SNHU IHP450 Healthcare Mgmt &Finance SHERYL HAYMAN FEBRUARY 2023 RONALD BUCCI
- 3. Venice Family Clinicsituated in Los Angelos, California Founded in 1970 Offers low-cost healthcare to individuals and families that are low-income, homeless, and uninsured. Vision- To improve the health of people and communities through accessible, quality care. Mission- Provide primary, quality healthcare to those in need. • Financial Condition Total current assets 2021 2022 $44,985,392 $46,290,113 • Healthcare Trends Introduction:
- 4. Proposal: • Develop atransportation program. • Necessary expenditures for a transportation program: • Vehicle Purchase • Wheelchair Lift • Driver’s annual pay • Driver Training • Insurance • Maintenance of vehicle
- 5. Strategic Goals • TheVenice Family Clinic is looking to boost earnings while also adding to the community's resources. This is a necessity for this vulnerable group with incomes below the poverty level. The proposal keeps the clinic aligned with its mission. The acquisition of a vehicle would help patients and bring in revenue for the clinic. Transportation issues can be a significant obstacle for people seeking medical care. When it boils down to choosing to pay for a meal or paying for a ride to the doctor, that is a tough choice and many will opt to feed their families and themselves over making a trip to the doctor. • A transportation program will be very helpful to the Venice Family Clinic, but it will require a substantial amount of money upfront. Microsoft Excel® was used to generate a breakeven analysis to evaluate this investment. This excel spreadsheet would also include operating and capital budgets as well as a 5-year return on investment to show how the program will generate income that will outpace costs rather than just cover costs.
- 6. • 2023 FordTransit Connect XL Passenger Wagon- seats 7 passengers, front-wheel drive, and several design options to choose from. $43,000 • 2023 GMC Savana 2500 Passenger Van- seats 15 passengers, lane assist technology, and many design options available. $42,000 • 2023 Kia Carnival- seats 6 passengers, collision avoidance, smart cruise, multiple design options to choose from. $33,000
- 7. Organizational Resources: * Dependingupon the option chosen, the cost for the van is between $33,000 and $43,000. * The organization would need to cover this cost at start-up. * The driver will need to be trained and certified, a wheelchair lift will need to be installed and insurance taken out on the vehicle, totaling $11,000.
- 8. Communication: Written communication viaemail will be utilized to inform departments within the business and will be used during proposal implementation. With this style of communication, the proposal can be distributed in a clear and succinct manner while also allowing for discussion and input on the plan.
- 9. Budget: Statements: Necessary goods includedin the budget: * Cost of vehicle * Automobile Insurance * Driver Education / CDLs * Maintenance of vehicle * Gasoline to fuel the vehicle The project will add value and boost earnings for the clinic as well as add to community resources.
- 10. Expenses Depending on theoption chosen- cost of the vehicle ($43,000-$53,000) additional wheelchair lift installation ($2000), driver orientation and training ($8,000)= total initial outlay of $53,000-$63,000 Annual costs include salary for the medical transport driver ($27,000) fuel ($8,000) insurance ($6,000).
- 11. Budgetary Accounts Purchasing atransportation van will have an influence on the budgetary accounts in the following ways: • assets • expenses • program services • salary • employee benefits • insurance
- 12. Reasoning: These accounts wereselected because they were the most pertinent to the plan based on the Venice Family Clinic's budget for the previous year.
- 13. Ratios & RatioCalculations: Liquidity Ratios: Total current assets: $39,749,811 Total current liabilities: $1,101,514 Asset Efficient Ratios: Total operating revenue + other income:$48,224,993 Total assets:$39,749,811 Projected Departmental Budget: The projected budget for the upcoming year that incorporates the costs of the proposed changes is $46,576,296
- 14. Short-Term Impact: • Largestimpact short term is the cost of vehicle = $43,000 to $53,000 upfront costs • Other costs do not so much affect short term • Investment keeps clinic aligned with its mission and vision in short and long term
- 15. Long Term Impact: ThisPhoto by Unknown Author is licensed under CC BY-ND Overall cost of project: $116,000 - 53,000 upfront cost for a vehicle $63,000 Long-Term Impact Increased revenue from third-party billing and Increased revenue from grant proposals for the project may facilitate the expansion of the project/program, further adding to the vision and mission of the clinic.
- 16. Projected Departmental Budget: ThisPhoto by Unknown Author is licensed under CC BY-SA Capital Budget Specific Department IT Department FY 2022 ITEM REQUESTED PURPOSE / USE ITEM COST INSTALLATION TOTAL COST • Van -Pt. transport 51,000, 2000 WC lift =53,000 • Driver Salary Drive the van 27,000 • Gas yearly Fuel van $ 8,000 • Insurance yearly w/ collision and comprehensive $ 13,000 • Maintenance yearly Van maintenance & upkeep $ 8,000 • Driving school Driver education, CDLs $ 8,000 TOTAL $ 116,000
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- 18. Cost Benefits: Cost ofthe entire proposal: $116,000 Benefits: Fewer no-shows = Increased revenue Fewer canceled appointments = Increased revenue Ability to bill 3rd party payers for transportation = Increased revenue Availability of government grants to start this program = Increased revenue Aligns with the mission and vision of the clinic.
- 19. Strategic Planning: •Provide cost-effectivecare to those in need in our community •ROI has the potential to expand the department with additional vehicles and drivers. Prepare rather than React
- 20. Conflicts: This Photo byUnknown Author is licensed under CC BY • Potential for staffing problems • Transportation is underutilized • Possible unaccounted-for expenses
- 21. References: (2023). Cdl.com. CDLPro. https://cdl-prep.com/References (2023). Ford.com. XL Passenger Wagon. https://www.ford.com/commercial-trucks/transit-connect-cargo- van/models/transit-connect-xl-passenger-wagon/ (2023, ). Gmc.com. 2023 SAVANA PASSENGER. https://www.gmc.com/vans/savana/passenge (2023). Kia.com. 2023 Carnival MPV. https://www.kia.com/us/en/carnival-mpv 43Nowicki, M.,(2022). Introduction to the financial management of healthcare organizations, (8th Ed.). Gateway to Healthcare Management. Michael Nowicki. (2022). Introduction to the financial management of healthcare organizations, Eighth Edition: Vol. Eighth edition. Gateway to Healthcare Management Venice Family Clinic. (2018.) Venice Family Clinic Consolidated Financial Statements. https://www.venicefamilyclinic.org
Editor's Notes
- #4 Venice Family Clinic’s budget looks healthy, they have been and continue to operate in the black. They are a non-profit business whose financial statement looks like this is true. As expected, they do not have large amounts of money, yet they are operating within their budget. The total revenue in the annual report for 2022 was $53,164,116 with expenses totaling $49,239,117. Trends Also appearing more during the pandemic is the trend toward telehealth. Although it has its challenges, this can solve many problems for patients and save healthcare dollars for facilities (National Council, 2023). With inflation, many people find themselves doing more with less. There is an increased demand within communities due to limited resources (National Council, 2023). Therefore, there is a trend toward an increase in demand for nonprofits as well as a trend toward workforce shortages. Nonprofits around the country are reporting difficulty retaining staff and fulfilling vacancies to the point that it is being considered a crisis according to the National Council of Nonprofits (2023). The lack of adequate staffing can mean the public will suffer a delay in or loss of necessary services. In light of the Affordable Care Act put in place in the U.S., there may be more of this clinic’s patients with insurance as time goes on. This could help them financially as they would then stand to be reimbursed through Medicaid for this care, allowing them to use these dollars to reach the neediest patients. Mission The Venice Family Clinic’s mission is to provide quality care to those that need it. Staffing shortages could potentially put their mission in jeopardy. In light of the Affordable Care Act put in place in the U.S., there may be more of this clinic’s patients with insurance as time goes on. This could help them financially. Although there may be challenges in staying afloat in the future, it looks as if Venice Family Clinic will be successful as always if they proceed carefully like they have in the past. By understanding financial concepts like working capital, utilization trends, and cash flows, the clinic can adopt this plan with confidence (Nowicki, 2022).
- #7 Financial Research A breakeven analysis was created using Microsoft Excel® to assess this investment. An operating budget, capital budget, and 5-year return on investment are also included in this excel spreadsheet to demonstrate how this program will create revenue to exceed expenses, not just break even.
- #10 Specific goods would be needed to develop a transportation program for Venice Family Clinic. This budget covers the price of the car, auto insurance, maintenance, gasoline costs, a driver's wage, and driver training expenses. Strategic Objectives The Venice Family Clinic is looking to boost earnings while also adding to the community's resources. The Clinic's strategic plan states that it will take a "revolutionary approach to care," and one of the key ways it can expand is by offering its population complete care (Venice Family Clinic, 2018). The acquisition of a vehicle would help patients and bring in more money for the clinic. Transportation issues can be a significant obstacle for people seeking medical care. Transportation service will be very beneficial to the Venice Family Clinic
- #12 Purchasing a transportation van will have an influence on the budgetary accounts for assets, expenses (program services, salary, and employee benefits), and insurance. Once purchased, the vehicle will affect Venice Family Clinic's assets account as an asset. Due to the requirement to hire and train drivers to operate the transportation van, the budgetary accounts for salaries and employee benefits would be impacted. As the costs of gasoline and maintenance fall under the transportation program that will need to be designed, the program services budgetary account will be impacted. The need for insurance for the vehicle and its drivers will have an influence on insurance.
- #14 Liquidity ratios and asset efficiency ratios will be used to evaluate the financial statements for the proposal items. According to Nowicki, liquidity ratios gauge an organization's capacity for achieving short-term objectives (2022). When assessing the financial performance of Venice Family Clinic, these parameters are crucial for gauging its liquidity. The asset efficient ratios compare revenue to assets to gauge efficiency. It will be crucial to keep an eye on the link between revenue and assets because the transportation van will be added to the organization's assets.
- #15 The purchase of a van to transport patients has most of its cost upfront. The cost of the van itself is $43,000 to $53,000 depending upon the option. Payments for insurance, driver training, driver’s salary, and gasoline would be on a monthly or less basis, therefore not having such a large impact on the short-term. However, this purchase will help this clinic stay aligned with its mission for years to come. By funding this initiative, The Venice Family Clinic won't have to give up any of its cash flow or working capital. Organizations must examine the rate of return a possible investment will provide as well as the investment's computed weighted average cost of capital before choosing an investment or project (Nowicki, 2022). The rate of return on the acquisition of this capital asset exceeds the weighted average capital costs of the Venice Family Clinic. This indicates that the clinic should fund this initiative because it will help it achieve its immediate objectives. The clinic will be able to offer a new service, which will raise the standard of treatment given, as one of the immediate effects of funding this project.
- #16 The overall cost of this purchase is approximately $116,000 which will impact the long-term budget in this amount, $53,000 in the short-term, and the balance in the long term. This will have the largest effect on the equipment budget for the clinic. The organization should convene at least twice a year after deciding on a strategic plan to review the set goals and objectives. This will be done to analyze the data and, if necessary, make new adjustments. The Venice Family Clinic will receive significant financial benefits from the passenger vehicle, which it will use to expand its current initiatives. The additional acquisition of more passenger vans or even buses that are more modernized and offer the patients more comfort, as well as the hire of more people to manage them, are expected to have long-term effects.
- #19 This capital item acquisition is anticipated to cost a total of $53,000, including wheelchair lifts. Driver's annual wages of $27,000, annual insurance of $13,000, a one-time fee for driver training of $8,000, and annual maintenance projected at $8,000 make up the remainder of the overall cost. When patients don't cancel their appointments or become “no shows”, a total of $10,000 will be made. Due to the Affordable Care Act, more patients will be insured, and the clinic will see more insured clients. This will result in a projected increase of $10,000 over previous years, which will also mean a significant increase in revenue. This shows the benefits of this investment will outweigh the costs. This cost-effective plan will be completed while Venice Clinic remains aligned with its mission.
- #20 Before approving the proposal, the cost and benefit analysis of the financial flows must be taken into account. To ensure a return on investment (ROI), an estimate of cash flows for at least five years has been made. The project's strategic planning outlines the aims and objectives that must be met for the proposal to be accepted. When strategic planning is successful, the clinic will be prepared for rather than reacting to what is coming in the next three to ten years (Nowicki, 2020). Finding vendors that will provide the greatest supplies within the project's budget requires study and comparison, which is one of the objectives that must be met. Finding training programs for drivers is another objective. Additionally, these courses must stay within the allocated budget. It is crucial to keep the clinic’s vision in mind during strategic planning (Nowicki, 2022).
- #21 As previously indicated, it is crucial to hold meetings and conversations to examine the data collected so that fresh approaches to problems that will develop in the coming year can be found. Due to the nature and expense of the healthcare service supplied, conflicts may arise while collecting payment from third-party payers like commercial or government insurance. It is crucial to properly manage the revenue cycle, have patient service standards and processes in place, and record charges accurately and promptly. There may be a need for an increase in staff and there could be expenses that were unaccounted for.