Week 8 Portfolio: Business Plan-Financial Elements Health care delivery continues as the topic of debate amongst health care providers, community members, and legislators in the United States (U.S.). The health care reform agenda assures the American people access to safe, quality health care while containing cost expenditures. The purpose of this paper is to provide an overview of my business plan proposal including the nature of the service, the need for the service, and the projected volume. A comprehensive financial statement will identify revenue and operation expenses for the first year of operation. The required Learning Experiences provided the forum to obtain realistic revenue and volume projections and identify applicable reimbursement codes and rates consistent with the Centers for Medicare and Medicaid Services as well as specific expense projections. As a nurse leader, this business proposal provides an opportunity to enhance patient care, meet the needs of the community, and further the strategic plan and organizational goals of the healthcare organization for which I am employed. Overview: Patient Centered Medical Home The focus of health care is moving beyond the patient care received today, to an emphasis on the health of the patient across the continuum. Nurses strive to promote patient-centered health care within the community to incorporate the necessary resources to support chronic illness and maintain the health status of their patients. Patient-centeredness, one core value identified by the Institute of Medicine in a 2001 report, is a future goal for health care reform in the United States (Millenson, n.d.). The Patient-Centered Medical Home (PCMH) concept established in 1967, by the American Academy of Pediatrics, introduced a team approach for providing health care to the special needs pediatric population (American College of Physicians, 52 2005). The PCMH responsibly integrates all aspects health care and services, eliminating fragmentation and concentrating on the patient, fostering a partnership between the patient and medical practitioner for coordination of care (Apold, 2012). The PCMH engages the patient and family members, encouraging self-management of one's personal health care. In my area of clinical practice, a not-for-profit diagnostic and treatment center, I will propose attaining PCMH recognition through the National Committee for Quality Assurance (NCQA, 2011). The Joint Principles of the PCMH; incorporating a personal physician, and patient directed medical practice, whole person orientation, coordinated care, quality and safety, enhanced access to care, and reimbursement based on acknowledging the value of patient-centeredness, offers best practice for attaining positive quality outcomes and maintaining chronic illnesses, such as diabetes and hypertension (NCQA, 2011). America's Health Insurance Plans (AHIP, 2009) and the Centers for Medicare and Medicaid Services (CMS, 2011) reward the quality of care provided by physicians with PCMH achievement versus reimbursement regardless of the patient outcome. The patient Hierarchal Condition Code (HCC) scores determine practitioner reimbursement with a set fee per patient per month schedule (CMS, 2011). The future of healthcare is dependent on maintaining wellness and preventing illness. Annual Projected Visits Employee Position FTE Projected Visits J.P. MD 1.0 4,600 P.C. O.D. 1.0 4,600 N.F. N.P. 1.0 4,600 Total Visits 13,800 53 Patient Revenue Projection Payer Percent Number of Visits Rate Revenues Bonus Payment PCMH Level 3 Recognition Total Revenues Medicare 40% 5,520 $30 $165,600 $6 $993,600 Medicaid 60% 8,280 $41.06 $339,976.80 $6 $2,039,860.80 100% 13,800 $505,576.80 $3,033,460.80 (CMS, 2011). (Emblem Health, 2012). Projected Workload Expected Care Hours (RVUs) = Hours of Care/ Level 1 Hours of Care (Finkler, Jones, & Kovner, 2013, p. 237). Expected Care Hours (RVUs) = 0.8/0.5 = 1.6 Expected Care Hours (RVUs) = 1.2/0.5 = 2.4 Expected Care Hours (RVUs) = 2/0.5 = 4 Acuity Level Number of Patient Hours Expected Care Hours Total Unit Workload 1 3,450 0.5 1,725 2 3,450 1.6 5,520 3 3,450 2.4 8,280 4 3,450 4 13,800 Total 13,800 29,325 54 Projected Personnel Cost Budget Position FTE Salary Medical Director 1.0 $175,000 M.D. 1.0 $125,000 O.D. 1.0 $125,000 N.P. 1.0 $100,000 DON 1.0 $90,000 RN 1.0 $60,000 RN 1.0 $60,000 RN 1.0 $60,000 RN Quality Assurance 1.0 $60,000 Medical Secretary 1.0 $31,200 Medical Secretary 1.0 $31,200 Biller/Coder 1.0 $45,000 Total Fixed Costs $962,400 Projected Costs for Other than Personnel Projected Costs Direct Expenses Medical Supplies $50,000 Office Supplies $25,000 Dues/Subscriptions $4,000 Seminars/Education $15,000 Total Variable Costs $94,000 Overhead Expenses Mortgage $45,000 Telephones $2,400 Electric $13,200 Oil Heat $6,000 Water $1,200 Total Overhead Costs $67,800 Total $161,800 55 Operating Income Operating Income = Gross Profit – Operating Expenses (Finkler, Jones, &
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