This assignment is a project to create the financial projection portion of a business plan that is based on a hypothetical situation at John Muir Medical Center. It is to include pro forma financial statements, including income statement, cash projection schedule, and balance sheet. Uses appropriate accounting method for industry and form of business. It provides realistic potential sales and earnings figures.
Ambulatory Surgery Center (ASC)
Background:
You are a project manager for a 300-bed community hospital with a 100-physician medical group consisting of primary care and specialty physicians including 20 surgeons of various specialties. Included in this are four well known and respected orthopedic surgeons who contribute significantly to the hospital’s surgery volumes. Senior leadership of the hospital has asked you to put together a proposal for the addition of an outpatient surgery center to be constructed in a new space attached to the hospital.
Important factors for consideration in your proposal include:
Patient flow
Number of rooms needed
Operating room (OR) equipment
Sterilization equipment
Office equipment
Construction factors: contractor selection, timelines, permitting, licensing, architecture and interior design, etc.
Volumes lost in main OR versus volume gain from outpatient environment and increased capacity
Staffing
oMake the following assumptions per operating room:
§One RN
§One scrub tech
§Four pre-op RNs
§Four post-op RNs
§Two registration clerks
§One custodian
§Two sterilization clerks
Registration process
Pre-op process
Post-op process
Coding/billing process
Physician space (Changing rooms, workspace for paper work)
Staff space (Changing rooms, break room)
Effects of political aspects of meeting physician needs on both the surgery center’s performance and that of the main OR in the hospital. Also, any that may occur between surgical specialists.
Financial impacts of an ASC
Trend analysis: are ambulatory surgery centers a growing or diminishing trend?
Typical competition of an ASC
Should it be attached to the hospital, etc?
Marketing – who are major audiences?
Training
Certification
**This is what has been created so far, but feel free to edit and explain as you see fit:
The profit and loss spreadsheet is based upon an average cost of approximately $5,500, and a cost of services estimated at approximately $4,125. Financial projections will be based upon a typical Ambulatory Surgery Center Schedule of Mondays through Fridays, with an average of 5.5 surgeries per day. A projected growth in revenue is estimated at approximately 5% a year over the next three years, assuming a growth in operations conducted and range of operations serviced.
For staffing assumptions, eight registered nurses are expected to work full-time at the facility, with the possibility of hiring more staff as needed for potential growth. Registered nurses average at approximately $35 for the surrounding area. Assumptions for other staff (surgeons, clerks, custodians, scrub techs, etc), will be based upon the average hourly rate for the position and area.
| Year 1 | Year 2 | Year 3 | |
| Sales | $7,260,000 | $7,623,000 | $8,004,150 |
| Costs/Goods Sold | $5,445,000 | $5,717,250 | $6,003,113 |
| GROSS PROFIT | $1,815,000 | $1,905,750 | $2,001,037 |
| Salary (Office & Overhead) | $1,079,656 | $1,079,656 | $1,079,656 |
| Payroll (taxes, etc.) | $43,186 | $43,186 | $43,186 |
| Repairs & Maintenance | $3,125 | $3,125 | $3,125 |
| Advertising | $1,200 | $1,000 | $1,000 |
| Rent | $24,750 | $24,750 | $24,750 |
| Other expenses | $12,000 | $5,200 | $5,200 |
| TOTAL EXPENSES | $1,163,917 | $1,156,917 | $1,156,917 |
| NET PROFIT (before taxes) | $651,083 | $748,833 | $844,120 |
| NET PROFIT (after tax) | $651,083 | $748,833 | $844,120 |
| ADJUSTED TO RETAINED | $651,083 | $748,833 | $844,120 |
