We have being losing an average of $11,500 per month at our primary care clinic.

Question

We have being losing an average of $11,500 per month at our primary care clinic. We cannot continue with these significant losses. We have an idea to expand our hours into the evening and staff the clinic with only Nurse Practitioners.

What do we know?

1. The existing operation is losing money: cost per visit is $52.00 and revenue per visit is $50.00.

2. The added visits will generate only $44.00 per visit.

3. We will generate an additional 2,875 visit per month.

4. With plan the revenue per visit is equal to only $48.00.

5. Our variable expenses will increase to the following:

Nurse salary and benefit             $180,047

Non-nurse expenses                    $233,942

Support staff salaries                     $100,000

Support staff benefits $21,353

Information Services $7,504

Laboratory $12,938

Imaging                                         $3,319

Medical/Surgical supplies $15,999

Promotion and Mgt. $5,700

Recruiting                                     $8,900

Other Op. Expenses                      $4,097

6. All other Costs (Fixed) remain the same

Opening the night clinic appears to make the loss worse! Will it? Please explain.

Excel Spreadsheet Information.

Current Revenues $ 287,500.00 Billable Patient Visits        5,750.00 Revenue Per visit $         50.00 Nurse Salary and Benefit $ 120,030.00 Total Non-Nurse Expenses: $ 178,970.00 Support Staff Salaries $   75,296.00 Support Staff Benefits $   15,353.00 Information Services $    5,003.00 Laboratory $    8,625.00 Imaging $    2,214.00 Medical/Surgical Supplies $   10,666.00 Building and Occupancy $   32,000.00 Furniture and Equipment $    6,578.00 Adminstrative Supplies and Equip. $    6,268.00 Insurance Premiums $    5,175.00 Outside Professional Fees $    2,616.00 Promotion and Marketing $    2,150.00 Other interest $       719.00 Health, Business, and Property Ins. $       776.00 Recruiting $    2,800.00 Other Operating Expenses $    2,731.00 Total Expenses $ 299,000.00 Net Income $ (11,500.00) Cost per visit $         52.00

Explanation / Answer

Answer:

Statement showing computation of income in case of proposed night clinic

So, from above information we can clearly see that night clinic option is not financially viable because after implementation of this option total loss increases

Current Adjustment due to opening of night clinic Under proposed night clinic Revenues $287,500.00 126500 $    414,000.00 Billable Patient Visits        5,750.00 2875.00 $        8,625.00 Revenue Per visit $         50.00 44 $              48.00 Nurse Salary and Benefit $120,030.00 $    180,047.00 Total Non-Nurse Expenses: $178,970.00 $    233,942.00 Support Staff Salaries $   75,296.00 $    100,000.00 Support Staff Benefits $   15,353.00 $      21,353.00 Information Services $    5,003.00 $        7,504.00 Laboratory $    8,625.00 $      12,938.00 Imaging $    2,214.00 $        3,319.00 Medical/Surgical Supplies $   10,666.00 $      15,999.00 Building and Occupancy $   32,000.00 $      32,000.00 Furniture and Equipment $    6,578.00 $        6,578.00 Adminstrative Supplies and Equip. $    6,268.00 $        6,268.00 Insurance Premiums $    5,175.00 $        5,175.00 Outside Professional Fees $    2,616.00 $        2,616.00 Promotion and Marketing $    2,150.00 $        5,700.00 Other interest $       719.00 $            719.00 Health, Business, and Property Ins. $       776.00 $            776.00 Recruiting $    2,800.00 $        8,900.00 Other Operating Expenses $    2,731.00 $        4,097.00 Total Expenses $299,000.00 $    647,931.00 Net Income ($11,500.00) $ (233,931.00) Cost per visit $         52.00 $              75.12

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