Preparing a Business Plan
Assumptions
Types of assumptions required for the financial portion of a business plan typically include answers to the following questions:
Example of Typical Income Statement Assumption Information Requirements:
- What types of revenue?
- How many services will be offered to produce the revenue (by month)?
- How much labor will be required (FTEs)?
- What will the labor cost?
- How many and what type of supplies, drugs, and/or devices will be required to offer the service?
- What will the supplies, drugs, and/or devices cost?
- How much space will be required?
- What will the required space occupancy cost?
- Is special equipment required? If so, how much will it cost?
- Is staff training required to use the special equipment? If so, how much time is required, and what will it cost?
Refer to the course project to add a nuclear cardiac stress lab.
Identify how many of the assumption items listed in the example above can be found in the project worksheets.
Use of Excel is strongly encouraged!
>PRO FORMA INC STMT PRO FORMA INCOME STATEMENT
REVENUE
S:
Gross revenue $ 3,000,000 Less contractual allowances $ (9
41,223) Net patient revenue $ 2,0
5 8,777
EXPENSES
:
Salaries $ 388,080 Benefits $ 93,139 Medical supplies $ 3 6,000 Radiopharmaceuticals $ 456,000 Nuclear license $ 425 Radiation safety consultant $
3,500 Radiation exposure monitoring $ 13, 200 First-year marketing expense $ 20,000 Clinician education (one-time) $ 40,000 Equipment insurance coverage $ 800 Liability insurance coverage $
24,000 Patient education materials
$ 800
Interest expense
$
0,000 Depreciation
expense $
127,000 Bad debt expense $ 149,363 Total Expenses $ 1,452,
307 Net Income Before Taxes $ 606,470
INCOME TAX
ES:
Federal $ 200,135 State $ 30,323 Local $ 12,129 Total Taxes $ 242,588 Net Income After Taxes $ 363,882
CONT MGN and BREAK-EVEN
PRO FORMA INCOME STATEMENTGross revenue
,000
Less contractual allowances $ (941,223)
Net patient revenue VARIABLE Salaries $ 388,080 Benefits $ 93,139 variable
.00
variable
.00
variable
fixed
First-year marketing expense $ 20,000 fixed
Clinician education (one-time) $ 40,000 fixed
Equipment insurance coverage $ 800 fixed
Liability insurance coverage
semi-variable
fixed
fixed
$ 328,925 Total Fixed Expenses
Federal $ 200,135
State $ 30,323
Local $ 12,129
Total Taxes $ 242,588
Net Income After Taxes $ 363,882
CONTRIBUTION MARGIN | |||||||||||||
BREAK-EVEN ANALYSIS | |||||||||||||
VOLUME | 2,400 | ||||||||||||
REVENUES: | PER EXAM | TYPE OF EXP | |||||||||||
$ 3,000 | |||||||||||||
$ 2,058,777 | $ 857.82 | Net patient revenue per exam | |||||||||||
EXPENSES: | |||||||||||||
$ 161.70 | variable | ||||||||||||
$ 38.81 | |||||||||||||
$ 36,000 | $ | 15 | |||||||||||
$ 190 | |||||||||||||
$ 0.33 | semi-variable | ||||||||||||
$ 62.23 | |||||||||||||
Total Variable Expenses | $ 1,123,382 | $ 468.08 | Total Variable Expense per exam | ||||||||||
Contribution Margin | $ 935,395 | $ 389.75 | Contribution Margin per exam | ||||||||||
FIXED EXPENSES: | |||||||||||||
fixed | |||||||||||||
$ 3,500 | |||||||||||||
$ 24,000 | |||||||||||||
$ 100,000 | |||||||||||||
$ 127,000 | |||||||||||||
Total Fixed Expenses | $ 328,925 | ||||||||||||
8 | 44 | BREAK-EVEN POINT | |||||||||||
INCOME TAXES: |
INCOME TAX
INCOME TAXES: Federal $ 200,135
$ 30,323
$ 12,129
$ 242,588
RATES | AMOUNT | |||||
3 | 3% | |||||
5% | ||||||
2% | ||||||
Total taxes | 40% |
REVENUE
5%
40% 3%
6%
6%
4%
4%
5%
2%
3%
1%
2%
40%
1% Gross charge 100%
0
.84
MEDICARE FEE
5%
5% 10% 20%
3,500 5% 10% 20%
caseload
3,000
8
10%
2,400
$ 987.39
Medicaid Blue Cross/Blue Shield Aetna$ 113,747
Cigna 96,000
United Healthcare 120 Other commercial 48 Workers’ Comp 24 Self pay 48 $ 60,000 $ 1,250.00 $ 60,000 $ 24,000
2,400 $ 3,000,000
$ 2,058,777 $ 149,363
PAYOR | % OF PATIENTS | % OF MPFS | BAD DEBT % | ||||||
Medicare | 5 | 1% | 100% | ||||||
Medicaid | 12% | ||||||||
Blue Cross/Blue Shield | 1 | 6% | 85% | 4% | |||||
Aetna | 80% | ||||||||
Cigna | 82% | ||||||||
United Healthcare | 70% | 8% | |||||||
Other commercial | 75% | ||||||||
Workers’ Comp | 60% | 7% | |||||||
Self pay | Gross charge | ||||||||
Charity care | |||||||||
DESCRIPTION | CPT CODE | BALTO MD RATE | |||||||
Radionuclide | various | $ 265.00 | estimate per patient | ||||||
Myocardial perfusion imaging; tomographic (SPECT), multiple studies (including attenuation correction when performed), at rest and/or stress (exercise and/or pharmacologic), and redistribution and/or rest injection, with or without quantification | 78465 | $ 511.08 | Use participating, non-facility price (with no modifiers) | ||||||
Myocardial perfusion study with wall motion, qualitative or quantititative study (use in conjunction with 78460, 78461, 78464, 78465) | 78478 | $ 62.22 | |||||||
Myocardial perfusion study with ejection fraction (use in conjunction with 78460, 78461, 78464, 78465) | 78 | 48 | $ 52.25 | ||||||
Cardiovascular stress test using maximal or submaximal treadmill or bicycle exercise, continuous electrocardiographic monitoring, and/or pharmacological stress; with physician supervision, with interpretation and report | 93015 | $ | 96 | ||||||
TOTAL | $ 987.39 | ||||||||
GROSS CHARGE PER TEST | $ 1,250.00 | ||||||||
% OF PATIENTS NEEDING STRESS TEST | |||||||||
PHYSICIAN CASELOAD | LOW | MEDIUM | HIGH | ||||||
2,000 | 10% | 20% | |||||||
2,500 | |||||||||
TOTAL ANNUAL TEST VOLUME | |||||||||
Physician | |||||||||
# of cardiologists | |||||||||
% of patients needing stress testing | |||||||||
Annual anticipated test volume | |||||||||
GROSS REVENUE | NET FEE PER TEST | CONTRACTUAL ALLOWANCE | NET REVENUE | BAD DEBT EXPENSE | |||||
1,224 | $ 1,530,000 | $ 321,435 | $ 1,208,565 | $ 60,428 | |||||
288 | $ 360,000 | $ 394.96 | $ 246,253 | $ 113,747 | $ 3,412 | ||||
384 | $ 480,000 | $ 839.28 | $ 157,716 | $ 322,284 | $ 12,891 | ||||
144 | $ 180,000 | $ 789.91 | $ 66,253 | $ 6,825 | |||||
$ | 120 | $ 809.66 | $ 42,273 | $ 77,727 | $ 3,109 | ||||
$ 150,000 | $ 691.17 | $ 67,059 | $ 82,941 | $ 6,635 | |||||
$ 60,000 | $ 740.54 | $ 24,454 | $ 35,546 | $ 1,066 | |||||
$ 30,000 | $ 592.43 | $ 15,782 | $ 14,218 | $ 995 | |||||
$ – 0 | |||||||||
TOTALS | $ 941,223 |
Shana K Wolfe:
2009 fee schedule; does not exist for 2010
Shana K Wolfe:
2009 fee schedules; does not exist for 2010
Shana K Wolfe:
2009 fee schedule; does not exist for 2010
Shana K Wolfe:
2010 fee schedule
EXPENSES
2,400
8
10
0.50 6
0.58
1.00 2
1.15
6
4
4
0.20 4
0.23
$ 93,139
COST
TYPE OF EXP
Benefits variable $ 93,139
$ 15
variable $ 36,000
Nuclear license $ 425
fixed $ 425
semi-variable $ 13,200
Clinician education (one-time) $ 40,000 per year fixed $ 40,000
Equipment insurance coverage $ 800 per year fixed $ 800
Liability insurance coverage $ 3,000
semi-variable $ 24,000
semi-variable $ 800
Depreciation fixed $ 127,000
COST
8
12
$ 40,000 15
$ 30,000 15
5
$ 20,000 5
30 $ 20,000
$ 127,000
8%
20
PROJECTED VOLUME: | |||||||
STAFFING: | AVG HR RATE | HOURS/TEST | TOTAL STAFF COUNT | COST | FTE | ||
$ 160.00 | 0.50 | $ 192,000 | 0.58 | ||||
Registered Nurse | $ 28.00 | 1.00 | $ 67,200 | 1.15 | |||
Respiratory Technician | $ 24.50 | $ 29,400 | |||||
Nuclear Medicine Technician | $ 32.00 | $ 76,800 | |||||
Receptionist | $ 9.50 | 0.20 | $ 4,560 | 0.23 | |||
Insurance verifier | $ 13.50 | 0.30 | $ 9,720 | 0.35 | |||
Biller | $ 11.00 | 0.10 | $ 2,640 | 0.12 | |||
Collector | $ 12.00 | $ 5,760 | |||||
4.38 | |||||||
Benefits as % of salary cost | 24% | ||||||
OPERATING EXPENSES: | UNITS | ||||||
Routine medical supplies | per test | ||||||
per year | |||||||
Radiation exposure monitors | $ 300 | per employee per year | |||||
per year per physician | |||||||
for 600 pieces | |||||||
TOTAL EXPENSES (not including bad debts) | $ 1,302,944 | ||||||
CAPITAL EXPENDITURES: | USEFUL LIFE (YRS) | DEPRECIATION | |||||
Dual-headed nuclear camera | $ 560,000 | $ 70,000 | |||||
“Hot lab” renovations | $ 220,000 | $ 18,333 | |||||
Additional plumbing | $ 2,667 | ||||||
Electrical & data cabling | $ 2,000 | ||||||
Treadmill, exam table, etc. | $ 50,000 | $ 10,000 | |||||
Computer equipment | $ 4,000 | ||||||
Structural renovations | $ 600,000 | ||||||
$ 1,520,000 | |||||||
FINANCING: | |||||||
Borrow | $ 1,250,000 | ||||||
Interest rate | |||||||
Term in years |