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    Rural Urgent Care Centers Business Plan

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    Background and Financial Data for Investment
    in the Rural Urgent Care Center

    Background

    Urgent care is the delivery of ambulatory care in a facility dedicated to the delivery of unscheduled, walk-in care outside of a hospital emergency department. Development of the Rural Urgent Care (RUC) facility will facilitate access to care providers through extended service hours within closer geographic proximity to patients, families, and caregivers. The Director of Emergency Services will provide clinical monitoring to ensure quality service provisions. The RUC facility will act to alleviate demand for emergency department (ED) services by shifting lower acute patients to a less resource-intensive environment.

    I. Market Opportunities and Utilization Patterns

    The RUC will provide treatment to patients suffering from non-life-threatening conditions that require quick attention, including bone fractures, pneumonia and flu, and minor lacerations. Since the late 1980s and early 1990s, hospitals have looked to facilities such as RUCs as a means to reduce rates of inappropriate ED utilization by triaging non-emergent patients to less acute settings. The ED is not the most appropriate care setting for many patients. Non-urgent patients account for well over 10 percent of the average ED's caseload, and semi-urgent cases account for another 20 percent (refer to Figure 1) . At the other end of the acuity spectrum, most emergent patients would be better served in an inpatient unit, but many are forced to board in the ED because beds are unavailable.

    Figure 1

    Triaging patients to an appropriate site of care properly allocates resources to meet patient acuity and results in better clinical outcomes. RUC staffing and treatment approaches are fundamentally different from those in an ED; patients get more abbreviated and pointed clinical work-ups, which provides care more efficiently by clinicians who are oriented to less intense discovery and intervention.

    The RUC will also address community needs for convenient, reliable access to care. Current alternatives to RUCs include the ED, which like other comparable U.S. and U.K. EDs, has long wait times and potentially stressful patient environments. Decreasing wait times is positively correlated with better outcomes.

    Figure 2

    Services

    To meet the needs of the community and provide the appropriate level of care without unnecessary duplication of a resource-intensive emergency department, the RUC will provide basic emergent procedures, diagnoses, and treatments.

    • Nursing triage
    • Physician assessments
    • Minor procedures
    • Basic lab services
    • Basic diagnostic imaging
    • Vital signs
    • IV therapy
    • EKG
    • Wound care

    The potential to house ambulance services out of the RUC provides additional requirements and opportunities. To accommodate the needs of the EMS crew, multiple waiting room/bunk rooms will be added to the facility, as well as a separate entry point for the ambulance service. Supplies will also be warehoused at RUC for easy restocking of ambulances. The RUC can also be part of the disaster-planning strategy by providing easy access to needed equipment and supplies during emergencies.

    Other Potential Offerings

    The RUC could offer opportunities to leverage the convenient retail setting to provide additional revenue-generating clinical services. For example, Occupational Safety Testing could be provided utilizing a secure bathroom to provide basic drug testing. Currently, the service is offered at the hospital, but is much better suited for a freestanding center.

    The RUC's diagnostic lab and x-ray services could also be offered on a referral basis for local GPs, providing a more convenient location for these services than the hospital and creating greater access to care.

    Yearly Staffing Costs by Clinical Lead Model

    STAFFING
    FTE Salary Total
    ED Physicians 2.0 $ 200,000 $ 400,000
    Subtotal $ 400,000
    Benefits as Percentage of Salary 20%
    Housing Allowance $ 48,000
    Total Wage and Salary Cost $ 528,000
    Hourly
    Rate Total
    Hours Total
    Locum Tenens Physicians $ 120 60 $ 374,400
    Subtotal $ 374,400
    Travel Allowance $ 24,000
    Housing Allowance $ 96,000
    Total Wage and Salary Cost $ 470,400
    FTE Salary Total
    Nurse Practitioners 2.0 $ 100,000 $ 200,000
    Subtotal $ 200,000
    Benefits as Percentage of Salary 20%
    Total Wage and Salary Cost $ 240,000

    Staffing Model per Shift

    Position FTEs
    Clinical Lead 1.0
    Nurse 1.0
    Physician Assistant 1.0
    Radiology Technician 1.0
    Medical Assistant/Receptionist 1.0

    Facility

    Facility design must meet the needs of clinicians and consumers. Consumers invariably associate the quality of healthcare services with the aesthetics of the site of care. The facility will be designed to blend into the local architecture to be a part of both the eastern and western communities.

    The RUC will have the following basic space layout:

    Facility Description

    Space Description Quantity Square Feet Per Room Total Space
    Central nursing/Physician station 1 500 500
    Exam rooms 5 100 500
    Treatment room 1 150 150
    Radiology room 1 200 200
    Staff offices 2 100 200
    Reception/waiting area 1 400 400
    Employee break room 1 250 250
    Medical records 1 250 250
    Laboratory 1 200 200
    Restrooms 3 50 150
    EMS facilities 2 80 160
    Utility rooms 2 150 300
    Subtotal Usable Sq. Ft. 3260
    Circulation, mechanical, telecom/IT, other space 915
    Total Facility Size 4,175

    Operating Model

    The RUC will open after the normal working hours of local physicians. These operating hours also align with the peak ED visit times, which significantly trail off after midnight.

    II. Market Profile

    Market Overview

    Define your service area.

    RUC Service Area

    Area 3 years ago 2 years ago 1 year ago
    Number of people in the RUC service area Total 64,009 64,209 64,395

    Demand Forecasting

    Adjusted Demand of Services Forecast

    Service Area Visits Year 1 Year 2 Year 3 Year 4 Year 5

    Year 4,882 4,914 4,946 4,979 5,012
    Month 407 410 412 415 418
    Week 94 95 95 96 96
    Day 13.4 13.5 13.6 13.6 13.7

    III. Financial Analysis

    Capital Requirements

    To estimate the total funds required for launch prior to commencement of operations, the hospital has developed the following assessment of anticipated expenses related to the building of a single RUC with 3,260 sq. ft. of usable space and 4,175 gross sq. ft., as described in an earlier section relating to facility design and a basic review of expected equipment costs.

    Capital Requirements per RUC Site

    Total Construction Cost $ 3,246,605
    Contingencies,
    Professional Fees,
    Management & Overhead,
    Equipment $ 2,216,341
    Total Project Costs $ 5,462,946

    Construction Costs per Square Foot $ 777.63
    Project Costs per Square Foot $ 1,308.49
    Square Footage 4,175

    Reimbursement Model

    The RUC will charge a flat per-visit fee of $262, based on similar current hospital ED visit charges. This averages the costs of Level 1-Level 3 visits, with expected fee growth of 5%. The reimbursement would remain consistent with similar visits at the current ED, thus local payers should be willing to accommodate the fee.

    Break-Even Analysis per RUC Site

    Revenue per Case $ 262.01
    Cost per Case $ 13.47
    Contribution Margin $ 248.54

    Direct Costs $ 1,914,607
    Indirect Costs $ 118,840
    Total Costs $ 1,976,647

    Pro Forma

    Services Offered

    Nursing Triage
    Physician Assessments
    Potential Diagnoses

    • Common illness
    • Respiratory illness
    • Allergies
    • Bladder infections
    • Eye/ear/sinus infection
    • Strep throat
    • Mononucleosis
    • Pregnancy testing
    • Skin rashes
    • Sport injuries/sprains/strains
    Services • Emergency transfer to KEMH
    • Vital signs
    • IV therapy (antibiotic, hydration)
    • EKG
    • Wound care
    • Immunizations, TD, Pneumovax, Flu Vaccines
    Minor procedures

    • Incision and draining of abscess
    • Excision of skin
    • Aspiration of cyst
    • Sutures
    Lab services

    • Blood
    • Urine
    • Other
    Diagnostic imaging

    • Ultrasound
    • X-ray
    Operating Model — Phased Operating Hours
    Phase I Phase II Phase III Phase IV
    Monday-Friday Hours 8 16 20 24
    Saturday & Sunday Hours 10 16 20 24
    Hours of Operation per Week 5 PM-1AM (M-F)
    10AM-8 PM
    (Sat. & Sun)
    Total Operating Hours 60 112 140 168

    Financial Analysis — Detailed
    RUC
    OPERATING HOURS
    Monday-Friday Hours 8
    Saturday & Sunday Hours 10
    Hours of Operation per Week 5PM-1AM M-F
    10AM-8PM Sat. & Sunday
    Total Operating Hours 60
    REVENUE

    FORECASTED VOLUME
    Adjusted Demand Forecast 4,881.84
    Visits per Month 406.82
    Visits per Week 93.88
    Visits per Day 13.37

    PATIENT REVENUE
    Payer Reimbursement $
    1,279,043
    Fee per Visit $
    262

    ADJUSTMENTS
    Government Grant $
    820,155

    Total Revenue $
    2,099,197

    RUC

    STAFFING
    FTE Salary Total
    Physicians 2.0 $ 200,000 $ 400,000
    Nurses 2.0 $ 80,000 $ 160,000
    Physician Assistants 2.0 $ 80,000 $ 160,000
    Radiology Technicians 2.0 $ 63,000 $ 126,000
    Medical Assistants/Receptionists 2.0 $ 55,000 $ 110,000
    Medical Director 1.0 $ 25,000 $ 25,000
    IT Support 0.5 $ 80,000 $ 40,000
    Subtotal $ 1,021,000
    Benefits as Percentage of Salary 20%
    Housing Allowance $ 48,000
    Total Wage and Salary Cost $ 1,273,200

    OCCUPANCY COSTS
    Utilities $ 208,750
    Repair/Maintenance $ 40,500
    Housekeeping $ 20,000
    Communication
    Internet $ 240,000
    Telephone Service $ 16,806
    Miscellaneous/Other $ 20,000
    Total Occupancy Costs $ 546,056

    SUPPLIES
    Variable Medical Supply Costs $ 65,767
    Other Non-Personnel Costs $ 95,351
    Total Supply $ 161,119

    Direct Operating Expense $ 1,980,375

    INDIRECT EXPENSE
    Management Overhead $ 118,822.49

    Total Expense $ 2,099,197
    Costs per Visit $ 430
    PROFITABILITY
    Operating Income $ - $ s -

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    https://brainmass.com/business/business-management/rural-urgent-care-centers-business-plan-617647

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    Solution Preview

    Rural Urgent Care Centers Business Plan
    I. Executive Summary
    Urgent care centers provide emergency and non-emergency medical care facilities. Usually not all patients require services of ED , they may be better served by inpatient unit but because of lack of availability of beds, they are forced to board in the ED. Development of Rural Urgent Care (RUC) centers will facilitate access to care providers through extended service hours within closer geographic proximity to patients, families, and caregivers. The facility will help in reducing load on the Emergency Department services by ...

    Solution Summary

    Financial analysis for Rural Urgent Care Centers are examined.

    $2.19