Royal Health Centre - Change Management - Case Study Example

? Business plan for Royal Health Centre Table of content Executive Summary……………………………………………………………3 Introduction……………………………………................................................3-4 Objectives………………………………………………………………………..5-6 Financial analysis……………………………………………………………….7-9 Strategies………………………………………………………………………..10 Break even analysis……………………………………………………………..11-12 Risks……………………………………………………………………………...13-14 Conclusion………………………………………………………………………..16 References………………………………………………………………………..16-17 Appendices……………………………………………………………………….18-20 1.0 Executive Summary The need to improve on the availability of affordable and reliable health care services for the city residents is an issue of paramount importance considering that few health care facilities are available in the city. The few health care facilities cannot cater for the city population, which stands at over two million and continues to double every decade. Upon completion, Royal health centre will be in the capacity to serve this population. Royal Health Centre’s main goal is to offer affordable medical services to the city dwellers in order to solve the problem of congestion on the available health facilities. The centre will mainly focus on providing quality health care and prescription medication to the middle and low-income residents. Royal health centre will provide both inpatients and outpatient services on a small-scale basis. A community elected board consisting of six individuals will manage the health centre. A Chief Executive Officer who will report to Board of Directors will manage the health centre as the head of the facility. The office of the Board of Directors is elective and shall consist of individuals residing in the city. The Chief Executive Officer is an appointee of the Board of Directors and should be a qualified doctor. The board shall also employ nine more employees to help in the day to day running of the facility. The Chief Executive Officer is Dr. Franklin. He will be charged with the responsibility of maintaining high medical standards in addition to creating a feasible cost-effective medical practice. He will also be in-charge of diagnosis and treatment of ailments whilst focusing on preventive medication and general wellness of patients. The facility will make use of modern medical equipment as well as highly trained medical personnel. 2.0 Introduction Royal health centre will endeavour to provide optimal health care and well-being of individual patients, for instance, a nutritionist who will be employed shall advise on recommended diet. Complicated health conditions that require complex procedures shall be attended after a careful analysis of risks and benefits which must be in written consent. Where treatment of a complication is not possible at Royal health centre, Dr. Franklin will give referral to specialists for further diagnosis and treatment. Dr. Franklin will be assisted by five other doctors, a nutritionist, a medical lab specialist, a cleaner and a receptionist. It is worth noting that marketing is a matter of paramount importance bearing in mind the need to serve the large population. The strategy combines the use of two media; print and electronic. It will in future explore the possibility of using promotional events. On financial matters, the health centre will depend on funding from the National Medical Service. The funding will cater for initial operational cost as well as staff remuneration and payroll taxes. Our anticipation is to have patient influx increase with time this will increase the revenue. The collected revenue will aid in supporting the operational costs and other expenses that might be incurred in the running of the facility. “Losses are part of the business” (Fitzpatrick Glasgow & Young, 2003). We expect to incur some losses in the first two years of operation. As a remedy, the board has made a plan to have a firm monetary balance to keep the facility running. The profits are anticipated after the third year. 2.1 Case for change As earlier stated the city population is doubling every decade, in the same scale, there is a need to double the number of health care facilities. The impact of fast growth in city population has already exerted pressure on the existing health facilities. Moreover, the need for affordable health care has gone up with increasing number of low income earners. Therefore, upon completion of this project, more residents would be in a position to receive the desired health care as required by the National Policy on health. Furthermore, upon its completion the program will lead to improved, cheap and available health care. The residents will also benefit from free health care for children below the age of ten years and free health care for the elderly people. Within a period of four years, our anticipation will be to have the cost of medications and prescriptions cut down by half while still maintaining the profit margin. With a reduction in the cost of medication, the poor would be able to access quality health care like anyone else. “This is possible by reinvesting the income as well as the profits accumulated in the initial years of operation” (Abrams & Kleiner, 2003). The Chief Executive Officer has already been appointed by the interim Board of Directors. The city authorities have visited the proposed site and endorsed the idea. In addition, the city community has shown the interest of donating more land to add onto current five acre land for purposes of future expansion. 3.0 Objectives Royal health centre will endeavour to: Provide the affordable medical care beyond the expectation of patients and the entire community. Ensure the availability of high quality health care to the city dwellers especially the poor. Provide health care that will serve the needs of the neighbouring community and the surrounding. Increase patient influx by 30% every year through quality service delivery. “Enhance marketing strategy through electronic media that will utilize a developed website where patients can easily interact with the system and use online booking services for purposes of getting additional information on drug prescription or consultancy” (Rowan, 2010). Realize high visiting patient percentage of upto 400 patients per month on an average basis and 600+ patients monthly average in the subsequent years. Mission Our mission as Royal health centre is to promote and provide cheap, affordable, high quality health care service to the city dwellers. Royal is committed to providing medical services that exceeds the expectation of patients, a purpose that will drive it into a successful profitable future. Key aspects to success Main concern on patient health and care Patient education on matters pertaining to disease prevention. Education of patients on the value of annual check-ups Design an accurate check-up recall system which will serve to remind patients to conduct usual check-ups Educate patients on proper diet plan as a preventive health strategy Appreciate the efforts of the staff in determination of overall success Design incentives plan for the staff whenever profits are generated. Create a systematic office procedures that will limit patient’s waiting time Provide a guided decision making on the use of expenses. Use the current electronic billing methodology to ensure proper management of funds. Keep an optimal number of patients that can be attended per hour while taking care of quality service. Perform aggressive awareness in the community as a way of marketing. This can be done through volunteer services, talks and seminars Develop a functioning website where doctors can obtain referral services from online professionals and specialists 4.0 Financial analysis 4.1 Costs and income analysis Royal health centre as earlier stated will offer affordable health care services for all patients. The centre will make use of the available staff, equipment and other facilities in maximizing medical care for patients. 4.2 Start-up facilities The five-acre land bought has a ready building on it. The Board agreed that the building would be used for the proposed health centre. Renovations have already been completed and necessary partitions have been done. The building provides a space of approximately 2,665 square metres. The building is strategically located off the main road with an ample parking space for car entry and exit. 4.3 Start-up summary An estimated 45 000 dollars will be required as start-up expenses. The funds will be used to purchase stationary, medicinal supplies and office equipment. A further $20 000 will be required as petty cash to start off the business. The National Medical Service would fund the expenses and petty cash. The cost of the land and building which makes part long-term assets is 400 000 dollars as determined at the time the project was initiated. The Royal health centre will incur the expenses in the purchase of the following items; Four computers and a printer Office equipment such as chairs, desks and filing systems Front counter and registers Computer software which include among others drug interaction software, ms office and desk reference software An assortment of bottles, boxes and envelopes Insurance, legal, licensing and regulatory Start-up funding breakdown 5.0 Strategies Royal health care centre will endeavour to provide the best of medical services which shall appeal to more city residents because of its affordability, value and convenience. “Operation costs will be minimized in order to maximize returns which will in turn aid in funding expansion of the facility” (Finkler & McHugh, 2008). Profits will be expected to yield by the end of the second year and even greater yields by the end of the third year. As follows;   year 1 year 2 year 3 Income $50,000 $100,000 $200,000 Gross Margin $300,000 $600,000 $700,000 Net profit $400,000 $900,000 $1000,000 A graph of projected profits and income is as shown. As earlier stated, a total of ten workers will be employed to assist in the running of the facility. The employees will be remunerated as follows: Dr. Franklin (Chief Executive Officer) $18,000 per annum Five assisting Doctors $ 48,000 per annum Laboratory specialist $ 6,000 per annum Nutritionist $ 6,000 per annum Cleaner $ 3,000 per annum Receptionist $ 3,000 per annum Total $ 84,000 per annum Employees will be remunerated by the National Medical Services for a period of five years after which the hospital’s returns will be used to remunerate employees, replacement of medical equipment, maintenance and repairs. To ensure good public relations, Royal health centre will be conducting yearly community based sensitization on health concerns by offering services such family planning and garbage collection where city residents and Royal staff will participate. In addition, there shall be free check-ups, treatment, and health education in the course of the exercise. Well-wishers will do funding of the exercise. 6.0 Break even analysis Our projection is that by third year sales would steadily increase. We expect to break even after the fifth year. This will enable the health centre cater for the years of loss. All employees including Dr. Franklin will earn constant salary for the first and second year. Our break even analysis shows that in the first year a total of $12,000 per month will make up to the break even. “It is expected that this mark will be passed by the eight month preceding the start of the business” (Kight, 2005). However, in the fourth and fifth year we anticipate about $22,600 to break even every month. Break even analysis “Monthly revenue Break-even expected is $ 75000. This is based on the assumption that there is an average variable cost of about 48% this translates to an estimated monthly cost of $39,000. The venture is hence viable and is worth investing” (Dunham-Taylor & Pinczuk, 2009). Projected profit and loss Below is a chart of projected profits and loss for a period of one year. 7.0 Risks Risks are common in all business ventures Royal health centre being unexceptional. “Risks such as flood, fire, burglary, loss of equipment to unpaid bills, theft or loss of money/cheques and damage of goods while on transit if not insured is likely to slow or stop daily operations” (Jones and Raihi-Brlkaoui, 2010). The risks can also expose the health centre to losses and low profit margins. Since the centre will be running on sophisticated medical equipment, the cost of the equipment might attract thieves. “Equipment used might get damaged in the course of operation, for instance the information technology system failure” (Covello & Hazelgren, 2006). Bearing in mind these and other potential risks, Royal health centre seeks to take up the following insurance policies; Money policies to cover cash and cheques Travel insurance policy that will cover employees while on travels Legal expenses policy to cover the costs such as solicitors’ fees and other court expenses (Mroczkowski, Fleay & Poustie, 2011). Credit insurance policy which covers against the risk of insolvent debtors Business interruption policy to compensate in case of losses such as costs incurred or loss of profits caused by a disaster such as fire or floods. Medical and Information Technology equipment cover against wear and tear or breakdown Buildings and its contents will also be insured against risks such as floods, fire and theft These policies will be paid for by insurance budget within the first year and later on by the returns and profits made. 8.0 How will the service be managed? A board of six directors who must be elected by the community will manage royal health centre. The elected board will appoint their chairperson and other officials to steer head the running of the facility. As stated earlier, the Board of Directors employs the head doctor who shall act in the capacity of a Chief Executive Officer. The head doctor and the board form part of the management of the project. The board understands the need to offer quality medical care to all ages, to give the best of medical services to the city dwellers. It is therefore with utmost interest of Royal health centre to set certain quality standards in order to achieve the company goals. The health centre will endeavour to attend to patients within the shortest time upon their arrival as this will boost customers’ wish to visit the facility again. Furthermore, more patients will be attended per unit time thus maximize profits. It is worth noting that follow up activity will be technically conducted on patients to ensure full treatment. Upon receiving the funds, the board of directors with Dr. Franklin will steer the project to ensure running of the project within a period of two weeks. The two weeks’ period will be used in interviewing other employees, purchase and installation of equipment. 8.1 Risk management The board felt there was a need to access risk exposure before sourcing for the funds. In the calculation the following formula was used: “(Exposure = Probability of Risk x Total Loss of Risk)” (Jopling, Lucas and Norton, 2004). During the calculation, the total loss that might occur was quantified and multiplied by the probability the risk occurring. It was decided, therefore, that property should be insured against losses in the event occurrence. Royal health centre will measure its success by the number of patients seeking treatment every month. It is anticipated that there will be an increase in the number patients visiting the health centre between the first and the third year. 8.2 Change Management The chief executive officer at Royal health centre will perform the following functions; Manage strategic framework. “He should understand the health centre in entirety including current medical staff challenges and future prospects” (Barnum & Kerfoot, 1995). Advise the board of directors on the needs and challenges of the facility Assemble a recruiting team during hiring of staff Create a conducive environment for physician environment Motivate the staff and encourage appropriate attitude Ensure proper management of finances. Promote teamwork and cooperation among the staff. 9.0 Conclusion Finkler asserts, thus, “Provision of affordable health care to any population is an issue of utmost concern” (Finkler, Kovne & Jones, 2007). As the population increases, health problems also increase and hence there is a need to balance population growth and health facilities. Royal health centre shares the same concerns. Funding this project will go a long way in providing cheap health care service to the city dwellers. References Abram’s, R., & Kleiner, E. (2003).The Successful Business Plan: Secrets & Strategies: Successful Business Plan Secrets and Strategies, 4th Ed. Silicon valley, California, CA: The Planning Shop, 49(1), 345-350. Barnum, B., & Kerfoot, K. (1995). The Nurse as Executive.4th ed. Burlington, MA: Jones & Bartlett Learning, 34(5), 102 Covello, J. A., & Hazelgren B. J. (2006).The Complete Book of Business Plans: Simple Steps to Writing Powerful Business Plans, 2nd Ed. Illinois, Sourcebooks, Inc, 23(4), 490-500. Dunham, J., & Pinczuk, J. (2009). Financial Management for Nurse Managers: Merging the Heart with the Dollar, 2nd ed. Burlington, MA: Jones & Bartlett Learning, 9(6), 500-501 Finkler, S. A. & McHugh, M. (2008). Budgeting: Concepts for Nurse Managers, 4th ed. St Louis: Saunders Elsevier, 24(2), 656-58 Finkler, S., Kovner, T., & Jones, B.(2007). Financial Management for Nurse Managers and Executives, 3rd ed. St Louis: Saunders Elsevier, 56(7), 231-33. Fitzpatrick, J., Glasgow, A., & Young, J., N. (2003). Managing Your Practice: A Guide for Advanced Practice Nurses, New York, NY: Springer Publishing Company, 58(1), 176-79 Jones, S. & Raihi Brlkaoui, A. (2010). Financial Accounting Theory, 3rd ed. South Melbourne: Cengage Learning, 9(4), 413-24 Jopling, R., Lucas, P., & Norton, G.(2004). Accounting for Business a non-accountant’s Guide. McGraw Hill, Australia: North Ryde, 2(1), 98-9 Kight, J. (2005). Development of a Business Plan for a Rural Health Clinic, Graceland College, 21(2), 120-148 NSW Department of Health, (2011).Annual Report NSW Health 2010-11. Retrieved 4th May 2012 Read More