Implementing a Plan for New Economic Opportunity

Introduction

Access to medical facilities is a key and vital component in the society and its services are needed regularly. After research carried out at the city, it was realized that the medical facilities in the city are not sufficient to meet the need in the society, therefore Whilborne Medical Center decided to take this as an economic opportunity which was feasible to venture. Before reaching into this conclusion, there were several reasons which necessitated the setting up of this system, they include; need to provide medical services to the city, improve service delivery to patients, reduce the distance travelled to access medical services, and boost the image of the facility in public domain thus fostering their competitiveness in the medical field.

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Before reaching into the conclusion of setting up a new medical facility, Whilborne Medical Center conducted the research about the project to determine its feasibility, cost-effectiveness, and profitability of the economic opportunity (Agency for healthcare research and quality, 2001). The report was forwarded to the management to give their final verdict basing on the results of the research. They reached into a conclusion that the opportunity was profit promising and worth to be invested. The project is expected to have a five-year plan which will be used to project the impact it will have on WMC at the end of five years.

The Budget for the Proposed New Medical Facility in the City

In setting up every business opportunity, it is always prudent to have a sound budget plan for the implementation of the business as this will go a long way to ensure that the project is budget worth and the promise of profit at long last. For the project budget to be sound and ensure that it is profit making, it should provide all steps to be followed in implementation and give room for post audit of the facility after a certain interval of time to determine how the facility is coping up with the society and to show its profitability. The budget plan has been made with the consideration that plan will start being operational as from the start of January 2020, therefore, the plan contains the projected expenditure and revenue for five years; that is from 2020 to 2015 (Mukherjee, Al Rahahleh, & Lane, 2016).

The expenditure to be incurred by the WMC is divided into, cost of acquiring medical equipment, salaries of the employees, insurance cost, stationary cost, buying of the structures, and cost of installing EMR system. With all these in consideration, it is expected that the facility will be able to make a profit after the end of four years, that is to mean that WMC will have recovered the amount spent in setting up the facility.

The facility will be set up in a land bought in the city, the cost of buying land is $545,700 and the building of the structures will cost $2.3million, there was an option of hiring structures to set up the facility at a lower cost than this but after a deliberation on this by various stakeholders, it was decided that it is a wise idea to buy land and develop it since it will be profitable at long last, and there was a ready source of funds. Bank of America would offer a loan to build the facility which the facility will start servicing after two years. The loan will be paid with an interest of 3.5% per annum.

The cost of installing an EMR system in the facility is projected to be $131,670. The system will be installed with a discount since WMC have been installing the same systems in their facilities and the installing farm decided to give a bonus in this facility since it's new and WMC have been their reliable customer, hence this is a positive reward to the facility (Mukherjee et al, 2016)

Salaries for the employees. It is expected that twelve nurses will be serving in the facility and each one of them will be paid $74,000, hence they in total they will be paid $888,000, two doctors will be serving in the facility each being paid $80,000. Two physicians receiving $60,000 monthly. It is expected that the number of patients to be served at the start of the facility will be low and after approximately one and a half years, the number of patients to be served in the facility is expected to rise by half, hence more nurses and physicians will be employed in the facility after one and half years thus increasing the amount to be paid as salaries, but this will not strain the facility financially since by the end of one and half years facility will be serving more patients hence more profit. The facility is expected to incur a total of $1.16 is paying salaries.

Medical equipment cost. It is projected that the cost of buying medical equipment plus drugs will be $750,000. The maintenance cost for two years is $30,000 and the insurance cost of equipment and the whole facility is $500,000 for two years (Wright, 2015). The insurance cost was budgeted for two years since with the current trend of emergence of new insurance firms, there is the likelihood that the cost of the insurance will be lowered as a result of competition by the insurance firms to attract customers.

Miscellaneous. In the budget, there is an inclusion of $200,000 as emergency funds. This amount does not have a specific function but it is meant to gather for any emergency which might arise.

It is expected that the facility will serve 380 patients per week and each one of them will be charged $155 hence total revenue per week will be $58,900, this is initial projection but after one and half years the number of patients to be served in the facility is expected to increase to approximately 500 patients per week thus the revenue will be increased to $77,500 per week.

The total cost of the facility is $6.784 million and the two-thirds of this initial cost will be funded by a loan from Bank of America. The remaining will be funded by WMC. With the bank charging its loan at the rate of 3.5% per annum, it is expected that the facility will be paying $0.9 million per year in servicing loan after 3 years. As per the budget projection, it is expected that the facility will start making a profit after three years of rolling out.

Rolling Out of the Economic Opportunity

It is expected that the facility will be in full operation after 9 months from now. One week will be used to advertise for a tender to choose an appropriate contractor to build structures, one week to seek a permit from the government authorities to approve the construction of the facility. Bank of America will deliver their loan to fund the facility after one month and the contractor will use approximately 8 months to construct buildings for the facility.

The rollout of the facility will be done in a manner which will ensure that the surrounding community is well served and the facility is culturally sound as expected by the dominant culture of the community set up (Khanna, Cheyney, & Engle, 2009). People within the city are the key stakeholders of the facility, therefore it is important to ensure that they get the best services from the facility, this will ensure that they make this facility their preference in seeking medical services. For this to be achieved, reception in the health facility should we encouraging and welcoming, service delivery should be timely, and the quality service is paramount.

As the facility construction is expected to be started soon, it is speculated that if by chance the right contractor to construct the facility is not found in time, then the time for the facility to be operational will be affected, also if the acquisition of funds from the bank is delayed due to protocol to be followed, the facility will delay (Mukherjee et al, 2009. According to the architectural plan of the facility, the structures to be constructed are expected to accommodate 100 patients, this might change in the future. It is expected that the facility will attract more clients in the future thus might end up straining the facility, forcing the management to put up more structures in the future.

With the keen execution of the plan, being led by qualified personnel, it is expected that the facility will prosper and yield positive results. This will make it a profitable venture of WMC as their other facilities have proofed to be successful thus assumption is that this facility will be successful. The profit realized will be used in improving the facility service delivery according to technological changes which will have arouse in the future. Technology is dynamic, so is the service delivery in medical facilities, therefore WMC should consider to have the plan to cope up with the changes in future (Making economic evaluations more assessable to health care decision-makers, 2003).

Strategies to Ensure the Success of the Facility

Upon the set up of the facility, there is anticipation that it will face competition from other medical health facilities within the city. For WMC to ensure that the new facility gains success it had to put down in paper strategies to ensure that they outcompete the potential competitors (Making economic evaluations more assessable to health care decision-makers, 2003).

The inclusion of EMR is so vital in the premise. Other facilities within the city have not adopted this system hence it will be seen that the new WMC facility will avail quality service delivery to patients hence they will prefer this facility (Khanna et al, 2009). EMR system will ensure that there is fast service delivery at the facility thus patients will always prefer this facility as they will be treated faster and their medical record kept in the facility making it easy to access it during the next visit to the facility.

Conclusion

In conclusion, the step taken by WMC to establish a new facility in town is a good idea. This facility will serve many people who have been going for long distance in seeking medical care. The facility is expected to promote the good reputation of the health facility, this is because the services to be offered are of high quality thus boosting their image in public domain. This business opportunity is viable and it is expected to earn a profit at the end of two years.

References

Agency for healthcare research and quality. (2001). International Journal Of Health Care Quality Assurance, 14(4). doi: 10.1108/ijhcqa.2001.06214dag.001

Khanna, S., Cheyney, M., & Engle, M. (2009). Cultural Competency in Health Care: Evaluating the Outcomes of a Cultural Competency Training Among Health Care Professionals. Journal Of The National Medical Association, 101(9), 886-892. doi: 10.1016/s0027-9684(15)31035-x

Making economic evaluations more assessable to health care decision-makers. (2003). The European Journal Of Health Economics, 4(4), 246-247. doi: 10.1007/s10198-003-0221-2

Mukherjee, T., Al Rahahleh, N., & Lane, W. (2016). The Capital Budgeting Process of Healthcare Organizations: A Review of Surveys. Journal Of Healthcare Management, 61(1), 58-76. doi: 10.1097/00115514-201601000-00011

Wright, D. (2015). Soft Budget Constraints in Public Hospitals. Health Economics, 25(5), 578-590. doi: 10.1002/hec.3174