Question: How many additional daily visits must be generated to break even? Thus far, the analysis has considered the clinic's near - term profitability, that is

How many additional daily visits must be generated to break even?
Thus far, the analysis has considered the clinic's near-term profitability, that is, an average day in 2018. Redo the forecasted profit and loss statement developed in Question 1 for an average day in 2023, five years hence, assuming that volume stays constant (does not increase).(Hint: You must consider likely changes in revenues and costs due to inflation and other factors. The idea here is to see if the clinic can "inflate" its way to profitability even if volume remains at its current level.)
Suppose you just found out that the $3,210 monthly malpractice insurance charge is based on an accounting allocation scheme which divides the hospitals total annual malpractice insurance costs by the total annual number of inpatient days and outpatient visits to obtain a per episode charge. Then, the per episode value is multiplied by each department's projected number of patient days or outpatient visits to obtain each department's malpractice cost allocation. What impact does this allocation scheme have on the clinics true (cash) profitability? (No calculations are necessary.)
Does the clinic have any value to the hospital beyond that considered by the numerical analysis just conducted? Do the actions by Baptist Hospital have any bearing on the final decision regarding the clinic?
What is your final recommendation concerning the future of the walk-in clinic?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!