BusinessPlan_FinaFinallEdit

Trajectory Infusion CenterBusiness Plan

Gerardo Flores, Conrad Virgo, Trinity Marquez, Amanda Romano, Anh Ngoc Nguyen, Carly Knight

Trajectory Infusion Center

Cancer Treatment Center: Infusion Center

Executive Summary This is the business plan for a for-profit Infusion Center, with a special focus on ambulatory infusion treatments for Cancer patients. This plan will include information on the profile of our company, an industry and service overview, a competitive analysis, a service delivery plan and a human resources plan, and various financial statements (Berkowitz, 2011). Our goal is to make infusion therapy accessible and affordable to all of our patients. We have a highly trained staff of nurses, physicians, and pharmacists ready to provide the best quality care for the wellbeing of our patients. The Trajectory Infusion Center provides current methods of infusion therapy on an outpatient level, and offers state-of-the-art equipment that may decrease or eliminate hospital stays for our patients.

2. Marketing Highlights

The Trajectory Infusion Center provides a myriad of services, including infusion therapy, which will eliminate the need for patients to visit hospitals and allow for a better outpatient experience. Treatment at an infusion center is more cost effective than receiving the same treatment in a hospital setting. We also save costs as a for-profit organization, as we are not required to provide educational services to the community. Our infusion center is constantly seeking out newer and more effective methods to prevent, treat, and diagnose multiple forms of cancer, as well as supporting basic and clinical research of blood cell development and stem cells, amongst other things. 3. Target Market Summary

Our target market is cancer patients who require chemotherapy treatment. We are located at Signal Hill, California, which is the most central location to people who are patients at Long Beach Memorial, Community Hospital, and Los Alamitos Medical. Having an ambulatory service gives us an advantage over other organizations that are not willing to travel to their patients to provide care. Cancer patients who require our treatment benefit greatly from our plan, as we provide closer locations and lower rates than existing hospitals. 4. Competitive Analysis

There are other hospitals near our location who offer trajectory infusion for their patients that operate under the same business hours. This can be viewed as competition to our business, as the hospitals are large and have been thriving for many years, and have multiple investments that

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allow them to upgrade their technology and procedures to better suit their patients. Other competitors may also offer chemotherapy, diagnostic radiology, radiation therapy, and surgery.

5. Key Marketing Strategies

The Trajectory Infusion Center will be implementing a number of key marketing strategies to ensure our company’s success. Our internet based strategy includes creating an online website that showcases the basic information and features of our Infusion Center, such as location, contact information, and business hours, as well as placing advertisements on the internet. The Infusion Center will also be developing contracts with a variety of nursing homes, hospitals, and assisted living facilities (The Finance Resource, n.d.). Our Infusion Center must also be well involved with the community to make ourselves more appealing to our target market. To do this we can assist in local blood drives or sponsor a local sports team, or help out at other local community events. Our marketing strategy must properly target our demographic by being active online and in the community.

6. Operational Highlights

It is important that we protect our business against potential lawsuits in the form of insurance. This includes insurance coverage for malpractice, liability, business, and workers compensation. We are also required to have voluntary regulation so as to be recognized by the state. We must have accreditation for our rendered services, meaning that we comply with the state and federal government professional standards of practice, in order to be reimbursed by insurance carriers. We must also adhere to other standards provided by JCAHO and OSHA.

7. Intermediary Concerns or Issues

Because our Infusion Center will be brand new to the community, our business will be largely unknown. It is important that we market strongly to the target demographic surrounding our community as well as appealing to those in the immediate area as well. 8. Management team Overview

Our highly trained staff of nurses, physicians, and pharmacists work collaboratively to evaluate the needs of our patients and provide the best possible plan customized to our patient’s needs. It is important that our staff is in fit condition to provide the best possible care to our patients. Employees are given a competitive benefit package that includes health insurance and a 401K plan. The employee wellness program helps maintain a healthy workforce for our company. 9. Financial Highlights

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One of our main financial requirements is a startup loan to ensure that our business can sustain itself for the first few months of practice. We can obtain a loan from CapitalOne healthcare financing for $3,000,000 with a 4% interest rate for 20 years. As a for-profit organization, we are subject to property tax and business tax, but Signal Hill has no utility tax. We will also have expenses for labor costs, overhead, benefits, employee salary, and equipment.A majority of our income will be from co-payments, insurance payments, and publicly funded sources, such as Medicare and Medicaid (The Finance Resource, n.d.).

Company Profile

1. Type of Organization

This business is a limited liability company organization. With a specialty focused on ambulatory infusion treatments for Cancer patients. 2. Name of Organization

Trajectory Infusion Center 3. Hours of Operation

Monday 8:00 a.m.-5:00 p.m.

Tuesday 08:00 a.m.-5:00 p.m.

Wednesday 8:00 a.m.-5:00 p.m.

Thursday 08:00 a.m.-5:00 p.m.

Friday 8:00 a.m.-5:00 p.m.

Saturday 09:00 am- 4:00 p.m.

Sunday closed.

4. Scope of Service Line

Trajectory Infusion Center primary focus is the treatment of cancer patients, along with other types of infusion therapy to treat patients. The services offered by Trajectory Infusion Center include, chemotherapy, blood transfusions, immunoglobulin treatments, autoimmune disease drug treatment, enzyme replacement therapy, as well as specialty intravenous fluids.

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Our infusion center is equipped with registered nurses who have expertise with a wide range of access sites, in order to provide the best treatment options for patients. The staff at Trajectory Infusion Center are able to work with patients who have central venous devices such as port-a-catheters, which is the best method of administering infusion therapy.

5. Clients Served

Trajectory Infusion Center mostly specializes in providing care to cancer patients that require chemotherapy treatment. This is why most of the nurses at our infusion center are trained in oncology. We also provide infusion treatments for patients suffering from other illnesses. 6. Location of Clinics

Our infusion center will be located in areas of need. We want to make sure that patients can go for infusion treatment outside of the traditional environment such as a hospital. That is why we decided having ambulatory centers would best serve our demographic. The location of our first center will be in Signal Hill, California. This way patients from hospitals such as Long Beach Memorial, Community Hospital, and Los Alamitos Medical will have a place to go for treatment. Signal Hill is a well-developed community. It is centrally located and is easily accessible. 7. Description of Business

Trajectory Infusion Center brings to Signal Hill, California a cost saving alternative to infusion treatment. Many healthcare providers might view using hospitals as a way of treating patients, however with our ambulatory treatment facility costs are lowered because our primary focus is providing infusion therapy. The goal of Trajectory Infusion Center is to meet the needs of our patients in any way that is medically safe for them. Whether it is simple infusion treatment for a wide range of illness, or long term infusion treatment. Our trained staff is knowledgeable, and is dedicated to providing the best treatment outcome. 8. Profit Status (nonprofit or for profit)

Trajectory Infusion Center is a for profit institutions. We take a wide range of payment options that include insurance as well as cash prices for our patients. Our aim is to make treatment affordable and accessible.

Industry Overview 1. Social Changes

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We are in the business of helping patients that are going through one of the most difficult things that one can. Not only are we aware of the need to help patients that come to our facility, we are also dedicated to making a change overall. One of the things that Trajectory Infusion Center is dedicated to is providing social change. We see an opportunity to do this in our community. We realize that the needs to be more awareness placed on the fight against cancer. We are committed to helping the community to do just that. Our organization will partner with various charities that help with providing services to patients that are battling with cancers such as breast cancer, and childhood leukemia. For example we plan to be a part of the Avon walk for breast cancer. The community around the Signal Hill area is in desperate need of providing health related services and counseling for those battling the disease. The Avon walk for breast cancer has managed to raise and astounding 3.6 million dollars for local breast cancer organizations in the Long Beach area. We at Trajectory Infusion Center are happy to be a part of this social change. Awareness starts with taking action which is our motto. Our staff and patients join the walk which brings approximately 1,700 participants over a weekend to raise money for this much needed health crisis. We are dedicated to finding a cure.

2. Economic/reimbursement Changes

In order to make sure that we are meeting industry standards. Our institution is dedicated to provide the best cost for patients. This means that we accept all forms of payment that are provided. This includes payment from Medicare as well as private insurance plans. We work with insurance plans to make sure that reimbursement is done appropriately. We use DRG system to ensure that drugs that are given in our facility are coded properly. This not only ensures the financial viability of our infusion center, but also eliminates charges that patients might have due to improper billing.

3. Demographic Changes

First and foremost Trajectory Infusion Center is dedicated to being an equal opportunity employer. Our staff are highly specialized in oncology. Furthermore we pride ourselves on having a diverse staff. We believe that hard work should pay, this is why we have a competitive benefits package for all our employees. This includes paid time off, health insurance, and 401K. The health of our employees is also of importance to our organization. A healthy workforce is a more productive workforce. At Trajectory we have an employee wellness program, this program assists employees with various health concerns such as weight management, regular screening for diabetes and high blood pressure. For employees to take advantage our wellness program, they are rewarded by a reduction in the cost of health benefits. We use the Healthyroads system to help employees. Healthyroads provides population health programs nationally for health plans and employer groups, serving more than 5 million individuals across the United States (Healthyroads, 2016).

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It also important to highlight the size population of the area Trajectory Infusion Center will be located. There are 11,585 people living in the Signal Hill Area. Population under 20 years is 26.3%, 21 to 34 years is 22.1%, 35 to 44 years is 16.1%, 45 to 54 years is 14.9%, and 55 years and over is at 20.3%. Based on these figures Signal Hill, California is an area that is ideal for growth.

4. Health Care Delivery Changes

Trajectory Infusion Center is a patient centered organization that provides continuous quality care for a patient over the necessary time needed. By providing in home and ambulatory care we can offer quality care at a lower cost which allows patients who are in need the option to seek help outside of a hospital setting. The patient centered organization helps us to assure that patients get the indicated care when and where they need and want it in a culturally and linguistically appropriate manner.

5. Regulatory/Political Changes

Trajectory Infusion Center is a third-party center. Therefore we are required to have voluntary regulation in order for our services to be recognized by the state. Most insurance carriers will not reimburse us for services rendered unless we have accreditation.

This accreditation means that we are compliant with the state and federal government in areas such as professional standard of practice and the clinical manner in which we provide infusion therapy. We are accredited by the Healthcare Quality Association on Accreditation (HQAA). This means that we have accreditation in areas such as IV compounding, Medical Practice, and third-party billing.

6. Key Success Factors in your segment of the Industry

For our infusion center to have success in our market we need to make sure that we are running our operation differently than our competitors. In order to do this patient satisfaction has to be our top priority. We also need to make sure that we adhere to the standards of regulatory bodies such as JCAHO and OSHA.

Some of the key strategies for success are:

● Authorizations for all patients- This will reduce the hassle patients may encounter to receive treatment.

● Access to labs services, infusion services and rapid times for lab results.

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● There are no barriers to service- we specialize in providing infusion therapy, this is the primary focus of our organization.

● We always have a physician on call in case any issues arise with patients.● Trajectory Infusion Center Communicates with referring physician about and problems or

issues administering care to patients.

7. Barriers to entry in your segment of the industry

There are many barriers that can be found in any healthcare organization that is trying to conduct business. Some of these barriers that we predict that Trajectory Infusion center will face are the sources of referral for our infusion center. We are entering a market that is dominated by patients being seen in the hospital setting for infusion treatment. In order to overcome this we have to market our infusion services to doctors that treat patients for various cancers as well as patients that need other forms of infusion.

Another barrier that will hinder our entry to this industry, is the recruitment and retention of our clinical staff. It is important that the staff we attract are not only highly specialized in infusion therapy, but they also need to be compensated by industry standards. Brand recognition is another area that needs to be considered as a barrier. We have to make sure that Trajectory Infusion Center has a brand that is easily recognized by patients and healthcare providers.

8. Barriers to exit in your segment of the industry

The exit barrier for our segment of the industry are low. This means that there are not a lot of infusion centers that are exiting our industry. This is good for the healthcare industry. There will not be much turnover, hence the longevity of Trajectory Infusion Center is good. This is due to the rising amount of patients that require infusion therapy.

Service Overview

1. What is the proposed new service proposal’s unique features/benefits?

It offers the latest technology and new antibiotic therapies. The latest technological improvements have led to improved vascular access devices, equipment, and infusion to ensure a safer and more reliable experience. Trajectory infusion center allows for accessibility for all patients with little to no hassle to receive treatment. Patients will be able to have easy access to labs services, infusion services and rapid times for lab results. There are no barriers to service.

2. What values does it provide to key target markets?

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For outpatient candidates, the Infusion Center is the most convenient alternative to an inpatient stay. It recognizes and caters to the schedules of its patients. The center offers flexible appointments and is able to administer treatments promptly and efficiently to lessen the time patients will need to be absent from their daily obligations such as school or work

3. What are the benefits of this new service proposal?

Infusion therapy eliminates the necessity of a hospital visit and allows for a better outpatient experience. This method of cancer treatment is cost efficient, high quality, and promotes patient morale. Because the patient agrees to the plan of care, there would be no increased risk for therapy to be administered as an outpatient.

4. How is this new service positioned against existing services by others?

As far as outpatient services are concerned, infusion center therapy is much more cost effective than the same treatment administered in a hospital setting. Trajectory provides ambulatory services in a comfortable environment which enhances the patient experience comparatively to other forms of cancer treatments for a more feasible price

5. What are you doing differently?

Highly trained and knowledgeable staff comprised of nurses, physicians, and pharmacists provide the best individualized customer service. They collaboratively work together to evaluate needs of the patient and produce a customized plan of comprehensive care. This reflects our mission of placing the highest priority on the patient experience and level of comfort as the epicenter of the healing process.

Competitive Analysis

1. Describe your competition’s services

Bioscrip infusion services include: ACHC accreditation for all BioScrip services, Specially trained Infusion Pharmacists, National Nursing Coverage with experienced nurses who specialize in IV infusions, Clinical Dietitian support for parenteral and enteral nutrition, Clinical Respiratory Care Services, Home Medical Equipment delivered and set up, USP 797 compliant sterile product compounding facilities, Infusion medications, supplies and pumps to meet all clinical requirements, Written policy and protocols for the safe administration of infused drugs, Free-Standing Ambulatory Infusion Centers, Externally qualified Centers of Excellence in the core infusion therapies, Expertise in clinical trial management and execution

2. What is their point of differentiation

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They offer a large quantity of services that are not encompassed in other infusion centers and their professional support program includes 24/7/365 access to Clinical Pharmacists, Dietitians, and Infusion Nurses.

3. What real value do they deliver to the customer that others do not

Bioscrip provides a wide array of products, services and condition-specific clinical management programs tailored to improve the care of individuals with complex health conditions. At the user’s discretion, they can choose where their care takes place: in their home, physician office, ambulatory infusion center, skilled nursing facility or other alternate sites of care.

4. Describe their customer profile

Their customer profile is primarily geared toward the wealthy older population of cancer patients. This can be inferred by the fact that they provide highly innovative technology with the comfort of an outpatient experience that would not be accessible to all budgets. In addition, there is no mention of pediatric services which leads us to determine their marketing is not geared toward children, but adults instead.

5. Detail the pricing strategy

It is not possible to determine exactly how Bioscrip sets their prices because that information is not accessible online. They accept insurance including Medicare and Medicaid which demonstrates the concept that contracts are made based on the reimbursements they receive. They offer worry-free financial services by providing patients with a dedicated BioScrip manager to handle insurance coverage and reimbursement, and design customized Pro Forma financial modeling or payment terms.

6. What is their marketing/advertising approach

BioScrip’s mission statement “Our mission is to enhance the lives of those we care for each day” demonstrates their intention of portraying to potential users that their company operates with a commitment to bring cost-effective care that is customer focused and individually specialized. Furthermore, they emphasize the fact they are dynamic in providing care in a variety of locations including homecare or an alternate-site setting. In addition, BioScrip utilizes the fact that they provide infusion and home care services from over 70 locations across 28 states as a marketing strategy.

7. Why do customers/referral sources buy or use them

They provide 24-hour Emergency Service, take all types of insurance including Medicare and medical, and provide a large quantity of services, all with the benefits of an outpatient experience.

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8. What are the opportunities or threats to your organization

Due to the fact Bioscrip has been a thriving company for years, they are well established and have the capabilities to expand their services and provide a larger variety of services at a cost efficient price. They also provide a 24-hour emergency services which is marketable to potential patients.

Place

1. Where will the service be delivered?

Our home infusion center is located in Signal Hill, California however since the goal of our infusion center is to cater to the patients who wish to receive treatment outside of the traditional hospital setting our services will be delivered in the immediate areas we are surrounded by. By providing ambulatory services we can easily attain access to patients who are not wanting or willing to receive treatment in a hospital setting.

2. What are the costs associated with this manner of distribution?

The Trajectory Infusion Center we are associated with offers cost friendly services that are provided by experienced and educated staff. Patients that are not covered by health insurance are typically paying $5,000-$10,000. This cost includes a drug administration fee, drug cost and facility fee. The total cost depends on the type of cancer, the individual case, drug regimen used, and the method used to administer the drug. For patients who are covered by health insurance chemotherapy is covered by most insurance plans therefor they are usually paying an out-of-pocket fee that consists of doctor visit, lab and prescription drug copays or coinsurance.

3. What is the marketing importance/advantage of this location?

Having our organization based out of Signal Hill we are able to reach out to a mix of strong, diverse neighborhoods that are contained within the city. Long Beach has maintained a strong sense of community, which is where our passion to provide services to patients who are struggling comes into play (lbadvantage.org). Being surrounded by such a diverse community allows us to partner with multiple charities so we are able to create a name for our organization and give back to other organizations who are looking to provide quality care to the community. Having a marketing team that contributes to the success of charities and various organizations around us allows us to receive the support we need to keep our organization going. Some of these outside organizations include:

Avon walk for breast cancer Assistance League of Long Beach Long Beach Ronald McDonald House The Nonprofit Partnership, etc.

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With Signal Hill and the surrounding communities being so diverse when marketing for our organization we must ensure that the ads are representing the various ethnicities and age groups adequately.

4. Does the location provide any competitive advantages?

Being located in Signal Hill provides easy access to all patients who are located within our community or who are or have received treatment from any of the local hospitals such as Long Beach Memorial, Community Hospital, and Los Alamitos Medical Center. Having an ambulatory service gives us an advantage over other organizations that are not willing to travel to their patients to provide care.

5. Are there exit issues with this distribution strategy?

The scope of Trajectory Infusion Center is to provide cost efficient, quality care to a significant portion of the population. By offering in home and ambulatory services we are easily accessible to patients who wish to receive treatment outside of a hospital setting no matter what portion of the population they fit into.

Pricing

1. Labor costs of FTEs

According the the HR plan the labor salary cost is $950,000 dollars a year which means it costs $2,603 to have our infusion center run per day. These labor cost includes our full-time employees benefits and expenses. Employee’s benefits include a 401k plan, and insurance for health, life, vision, and dental.

Labor costs of FTEs

Employees Salary Per Year Total Salary

Nuclear Medicine Technician

2 $85,000 $170,000

Physician 1 $150,000 $150,000

Pharmacist 1 $100,000 $100,000

Medical Assistant 2 $35,000 $70,000

Infusion Nurses 2 $80,000 $160,000

Health care Administrators 1 $65,000 $65,000

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Counselors 1 $65,000 $65,000

Managers 2 $60,000 $120,000

Janitor 2 $25,000 $50,000

Medical Biller 1 $15/hour

Total 15 - $950,000

At our organization our infusion nurses typically work 40 hours per week leading to an average salary of $80,000 per year. Using the LeanTaaS ROI Calculator in order to improve our operations if we have 30 infusion chairs, $300 reimbursement per treatment, 70 treatments per weekday, 8 nurses, on average 20% overtime, $80,000 salary per year per nurse, and a 10% growth in projected patient volumes per year implementing improvements will create a 20% higher patient volumes, $546,000 increase in revenue, $128,000 reduced labor costs leading to a total savings of $674,000 (businesswire.com).

2. Overhead

According to Health Affairs, administrative overhead is expected to reach a quarter of a trillion dollars by 2022 (Himmelstein & Woolhandler, 2015). Since our facility is new and our services will be costly for most patients to pay out-of-pocket, we will see most of our overhead costs go toward administration and insurance billing. This will take a large amount of financing especially if our facility is getting patients from different health insurance plans. To keep overhead low we will staff half of our nurses on a per-diem model. According to Bryan Soronson, this keeps costs low since we only use nurses when we need them (Versel, 2005).

3. Margin

There are two main margin ratios we need to focus on when we consider our businesses profitability. These two ratios are the total margin and the operating margin ratio. These will help us see if our organization is making sufficient money to stay in business. Since we are a for-profit organization, we need to make a profit to please our shareholders and stakeholders. Across the healthcare industry margins tend to be low. They can run anywhere from 0% to just 15%. According to Modern Healthcare, “the average operating margin in 2013 was 3.1%, down from 3.6% in 2012” (Kutscher, 2014). To make our facility profitable in the long run we need to run a total margin of 5% and an operating margin above average at 4%. This will ensure that we meet our financial obligations and succeed at giving our patients the best care.

4. Low, medium, high (relative to competing service providers)

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Part of our mission is to provide cost saving treatments so we are considered to be a low cost organization. The cost of running an organization such as Trajectory Infusion Center, has many factors to consider. We have to look at how much it will cost for insurance for our clinical personal. Our infusion center will consist of primarily oncology nurses. The average cost for malpractice insurance for nurses in California is approximately $90 per year. This covers liability from $1million to $6million per year. This cost is assumed by our infusion center because, we want to make sure that our nurses and patients are protected from injury caused at our infusion center.

The cost of malpractice insurance for nurses in California is roughly the same for other states such as Arizona and Texas.

Service Delivery Plan

1. Service delivery methodology

Trajectory Infusion Center offers clinical trials, patient care, and research. We offer a full range of specialty that diagnose and treat most forms of cancer: chemotherapy, blood transfusions, immunoglobulin, antibiotic therapy, and other intravenous fluids.

2. Clinical protocols and description of best practices

The infusion center works with patients and physicians, by educating them on the best course of action for treatment. Patients get to have treatment in a comfortable environment. We find that due to the extensive time it takes for treatment, it is best for our patients to have access to amenities such as television and internet access. This makes the length of infusion treatments more bearable, and provides less hindrances to our patient’s lives.

3. Cost analysis (direct and indirect overhead)

Direct Cost: Medical materials and supplies Employee salaries and wages Advertising

Indirect Cost: Building and equipment depreciation Utilities (gas, rent, electric, water) Malpractice insurance

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5. FTE requirementsAccording to the Internal Revenue Service (IRS), a full-time employee is determined by 40 hours of service per week, or 130 hours of service a month.

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6. Space requirementsTrajectory Infusion Center will be 4500ft². We have diagnostic and treatment function which requires a laboratory; other functions dealing hospitality care includes food service and housekeeping. A simple method of computing space requirement for hospitals is on the basis of beds the hospital will have. According to Kunders, the normal space that is occupied by the bed itself and access is about 100 ft² while laboratory test space requires at least 900 to 1200 ft².

Human Resources Plan

Organizational structure/staffing plan

1. Clinical (full-time vs. part-time)

Nuclear medicine technician (2 Full-time) Physician (1 Full-time) Pharmacist (1 Full-time) Medical Assistant (2 Full-time and 1 part-time) Nurses (RN, LVN, LPN) (2 Full-time) Physician’s assistant (1 Full-time)

2. Non-clinical (full-time vs. part-time)

Healthcare Administrators (1 Full-time) Counselors (1 Full-time) Managers (1 Full-time and 1 part-time) Janitor (2 Full-time) Medical biller (1 full-time) Social services (contracted)

Compensation

1. Rate

Nuclear medicine technician ($85,000 annual salary) Physician ($150,000 annual salary) Pharmacist ($100,000 annual salary) Medical Assistant ($35,000 annual salary) Infusion Nurses ($80,000 annual salary) Healthcare Administrators ($65,000 annual salary) Counselors ($65,000 annual salary) Managers ($60,000 annual salary) Janitor ($25,000 annual salary) Medical biller ($15 hourly) Social services (contracted)

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Depending on the occupation, rates will be varied according to professionals and years of experience. According to the American Medical Association, most technicians and therapist starting salaries range from $45,000 to $55,000 annually; nurse practitioners and physician’s assistant start from $100,000 annually. Specialty physicians’ salaries will depend on years of practice but the median starting range is from $150,000 annually.

2. Benefits

Benefits at our Trajectory Infusion Center will only be available to all regular and probationary employees working 40 per week. Medical insurance coverage begins on first day of employment.

o Medical insuranceo Dental Insurance o Paid Time Off

Paid time off will be for holidays, vacation, illness, family need or personal business. Time is accrued each pay period based on length of service, employment status, and FTE.

3. Job descriptions (detailed listings)

Nuclear medicine technician ($85,000 annual salary)-Operate emission tomography diagnostic equipment and effective communicate with patients

Physician ($150,000 annual salary)-Evaluating the need of medicinal therapy and prescribing the relevant medicines

Pharmacist ($100,000 annual salary)-Prepare medications and review physician’s orders

Medical Assistant ($35,000 annual salary)-Make sure administrative and clinical duties are running smoothly

Infusion Nurses ($80,000 annual salary)-Prepare radioactive drugs and administer to patients

Healthcare Administrators ($65,000 annual salary)-Organize and coordinate medical and health services in relation to policies

Counselors ($65,000 annual salary)-Assess with patient of care and treatment plans

Managers ($60,000 annual salary)-Recruit, hire and evaluate assistant administrators, and clinical staffs

Janitor ($25,000 annual salary)-Perform heavy cleaning duties

Medical biller ($15 hourly)-Verify patient’s insurance and answer common billing questions

Social services (contracted)-Work closely with patients to support them through difficult times

4. Roles and responsibilities

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Nuclear medicine technician Administer radiopharmaceuticals and medications for patient imaging and

therapeutic procedures Physician

Monitor response when necessary to revise the therapeutic plan Pharmacist

Ensure of safe procurement, adequate storage and dispensing of medicines Medical Assistant

Verify patient information and prepare them for examinations Infusion Nurses

Assess patient health by performing physical examinations; obtaining, updating, and studying medical histories

Healthcare Administrators Act as liaisons among governing boards, medical staff and department heads.

Counselors Instruct and counsel patients by describing therapeutic regimens; promoting

wellness and healthy lifestyle Managers

Making sure practice is running smoothly and the facility is running efficiently Janitor

Keep facility and work space clean and sanitized Medical biller

Compile data and submit claims to insurance companies and bill patients Social services

Liaising with other agencies about assessments

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Balance Sheet and Income Statement

Cash Flow Statement

Annual Cash Flow Statement *Preliminary NumbersRevenue ###

SalaryFull-time Employees $650,000 Part-time Employees $300,000 Total: $950,000

UtilitiesElectricity $2,000 Internet & Phone $4,500 Water & Trash $1,000 Total: $7,500

ExpensesMedical Supplies $15,000 Office Supplies $3,000 Repairs & Maintenance $3,000 Total: $21,000

Start-up CostRemodeling ($140/ft²) $200,000 Large Equipment $100,000 Small Equipment $75,000 Total: $375,000

Advertising (Educational) ExpensesOnline Ads $1,000 Newspaper Ads $1,500 Magazine Ads $1,000 Total $3,500

1. Billings

One of the most important processes to ensure consistent cash flow is billing. Billing accurately and on-time is crucial to any businesses success. This is done to make sure that we are being reimbursed for our services. According to one article, “with uncollected medical bills running as high as 50 percent nationwide, collections must also be made priority at the time of visit”

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(Ehrhardt, 2012, p. 1). This makes consistent billing crucial to the success of our infusion clinic. We will utilize the weekly cycle billing schedule to optimize our cash flow. According to Ehrhardt, this allows monies to be collected throughout the month and not just one day out of the month (Ehrhardt, 2012, p. 16).

2. Loans

Considering we are already cash strapped and the fact that our practice will be in the red for the first couple of months, we will consider taking a loan to start our business. There are a plethora of creditors on the market. Most of these creditors lend money to nursing homes, acute care hospitals, and even pharmaceutical companies. We will obtain a loan from CaptialOne healthcare financing for $3,000,000. This will cover our start-up expenses and the first few months of operation. Our loan will have a 4% interest rate for 20 years. Our total cost for this loan will be $6,573,369.43 with $3,573,369.43 coming from the interest expense.

3. Expenses paid

Since we are a for-profit organization, we will be subject to several taxes. The first one is property tax. This tax is currently 1.114851% in Signal Hill. If our total property value is $1,000,000 and the building is valued at $2,000,000, our total tax will be $33,445.53 per year. There are no utility taxes in Signal Hill and the business tax rate is one of the lowest in the county. We will also have an interest expense on the loan we borrowed which will be in total around $3,500,000. Other expenses will be the labor costs, overhead, and benefits.

4. Start-up costsStart-up costs can hit a medical practice hard, especially when they are low on available cash. According to one article, start-up costs for an infusion center can range from $10,000 to $15,000 (Staff, 2012). This estimate is just for equipment, however. There are other fixed costs like space rental, staff salaries, and health benefits (Staff, 2012). These numbers could vary but if we have 2 physicians, 2 nurses, and a receptionist and a biller, we can be looking at around $75,000 to $100,000 just for the first month in terms of salaries. In total, the start-up cost for our infusion center would be around $200,000, including everything from capital to salaries.

5. Promotional (educational) expenses

Since we are a for-profit organization, we do not need to give educational services to the community. This cuts out the community benefit reporting that many organizations need to produce. In place of this we will consider running a promotion to draw people to our business. One promotional expense could be free screenings for first time customers. Screenings are cheap and they let us connect with the patient when they use the facility. This will entice people to use our services and continue to come back. We can also put these promotional expenses as tax deductible in our IRS forms.

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6. Insurance

We will need to insure our facility against any lawsuits. This is the first insurance we need for our practice. Malpractice insurance in California could range anywhere from $24,000 to $34,000. There are also many other forms of insurance we need to purchase. We would need liability insurance, business insurance, and workers comp insurance. In total we could be paying around $100,000 to $150,000 on insurance alone.

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References

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