GYou are the chief financial officer (CFO) at a community hospital. One of the comments that has come back from patient surveys is the need for a commercial 24-hour pharmacy within the hospital. In this way, patients or their families will be able to fill prescriptions and begin taking ordered medication right away instead of waiting until the following day. The chief executive officer (CEO) wants you to create a proposal for the first 3 months of operation utilizing time value of money tools for the development of this new revenue-generating department. The following points must be covered in your proposal:
Include and discuss the need for working capital to include 2 months of startup drug inventory, vendor financing arrangements, personnel costs including salaries and benefits, renovations, disposable supplies, and cost of equipment
Provide 2 viable options to measure the rate of return to optimize financial performance of the department based on time value principles with rationale and justification.
Include a profitability analysis for 3 years.
Include a schedule of assumptions for your proposal. What questions might the board ask regarding feasibility of this proposal?
How might current changes in federal, state, and local policies influence decisions to be made?
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Healthcare Financial management and decision making-Proposal for a 24 hour pharmacy
1. Mission statement-
The mission of this 24 hour service pharmacy within X community hospital is to become the recognized leader in its market segment for providing medicines to patients and their relatives in the community hospital. These comprehensive services to patients and their families include filling prescription drugs, over the counter drugs and general medical supplies, so that they can begin taking their medications immediately instead of waiting until the next day.
2. Products and Services
The primary business of the pharmacy will be to distribute medicines to patients who seek services from the community hospital. The hospital will earn approximately 20 % of all the gross margins. At the beginning of the business, it will employ one full time pharmacist and a pharmacy technician to assist in the management of dispensing of medicines to patients. Besides making profits from medicines, the business will sell general medical supplies and other merchandise including candy, ...
Starting a pharmacy business requires a business proposal that takes into account a combination of technical, financial and community factors. The attached solution highlights the key components of a business proposal for a 24 hor pharmacy in a community hospital that is established to meet the needs of patients based on their survey responses.
References have been cited for further reading.