Part 3: Program Finances

Factors that determine the financial feasibility of a health care program include the cost of the facility, equipment, staff salaries, patient out-of-pocket expenses, and insurance reimbursement. Referring to the concepts practiced in the collaborative assignment with your group last week, work on the following:

1. Determine how many physicians and supporting staff are needed to operate the clinic, applying the appropriate ratio of clinical and support staff per physician.
2. Determine the direct costs of the program. Direct costs in this case are patient expenses, and they increase as the number of patients increase. These include:
   1. Physician and procedural support staff costs per patient/procedure
   2. Gloves, sutures, gowns, equipment, lab supplies, other supplies
3. Determine the indirect costs of the program. Indirect costs are overhead costs that include but are not limited to:
   1. General support staff and related costs
   2. Electronic medical records
   3. Insurance and taxes
   4. Facility and administration
   5. Employee benefits such as health and life insurance, retirement plans, and fringe benefits
4. Determine the equipment costs of the program. This includes items for the physician clinic that will be used for more than one year. This is in contrast to variable costs which occur per patient and include such items as gloves, syringes, needles, and gauze, and would include items such as:
   1. Examination tables
   2. Workstations
   3. Desks and chairs in the waiting room
   4. Other equipment of this nature
5. Determine reimbursement for clinic services based on HCPCS/CPT codes with geographical adjustment.
6. Determine net reimbursement after variable costs per patient.
7. Determine how many patients the clinic will need to see (a) on average per day and (b) annually to break even on expenses.