Establishing a Diabetes Treatment Center at St. Anne Hospital

Running head: HOSPITAL
Hospital
Name of the Student:
Name of the University:
Authors Note:

1HOSPITAL
Table of Contents
I. Executive summary.................................................................................................................2
II. Program Overview.................................................................................................................4
Location..................................................................................................................................4
Services..................................................................................................................................4
Other Professional offering....................................................................................................4
Staffing needs.........................................................................................................................5
Operational model..................................................................................................................5
III. Market Profile......................................................................................................................6
Market Overview...................................................................................................................6
Demand forecasting...............................................................................................................6
IV. Financial analysis.................................................................................................................7
Capital Requirements.............................................................................................................7
Reimbursement model...........................................................................................................8
Cost per patient visit...............................................................................................................8
V. Pro Forma..............................................................................................................................8
Patient Revenue......................................................................................................................8
Operating Expenses................................................................................................................9
Income from operation...........................................................................................................9
Total expenses......................................................................................................................10
Net Cash flow.......................................................................................................................10
Reference..................................................................................................................................12

2HOSPITAL
I. Executive summary
St. Anne Hospital is a non-profit organisation which is situated in western Australia.
The hospital consists of 205 beds, 8 operating theatres, 10 ICU chambers and 30 birthing
suites. Other services that the hospital provides are endoscopy, pathology, radiology and
ambulance service. The hospital offers other facilities regarding surgeries, diagnosis of
several diseases and other specialised care for its patients. The total number of the working
stuffs in the hospital is 168 including the medical and management teams. The operating
model of the hospital is divided into mainly two wings. The first one is the management wing
which deals with the financial and management prospects of the hospital and the medical
teams takes care of the other major issues like admission of a patient, diagnosis of the
disease, treatment of the patients and various other matters regarding the medical issue of the
clients.
According to the survey made by the management team of the hospital, it is stated that
there is a high rate of patients in the surrounding areas who are suffering from diabetes. The
people belongs from different regions and more than 50% of them are belonging under 200%
or more poverty level. The economic condition and the insufficiency of proper diabetes
treatment center lead the locality towards a high risk of being affected by diabetes. As a
result, the number of patients suffering from this disease is increasing day by day. Thus it is
very necessary to establish a diabetes treatment clinic as there is a high demand for such
clinic in the nearby localities.

3HOSPITAL
As far as the required capital in this project is concerned, the total cost that is required
in this project is $87,09,551 including the Construction Cost and the project cost. The
reimbursement model of the physicians and other nursing and support stuffs are being
calculated as a total of $625,000 per year. Regarding the amount of expected patients visit
that are stated in the budget, the average cost per patient is $438,70.
As far as the total revenue of the patients is stated in the budgetary planning the
revenue from the patients is expected as $15,37,830 with an growth rate of 0.3% for each
successive year. The operating expenses in this project is calculated as $244,385 in the first
year. After five years, the total amount of operating expenses is calculated as $14,71,059. The
total income from the operations is stated as $16,24,991 for five years of time period. This
income is excluded from the primary expenses which would be invested in the primary
project cost. The net cash flow regarding the project is being calculated by comparing the net
income with the total cost invested in this project. For this case, the expected return from the
project in the first years is expected as $2,76,385. The amount is expected to increase in
every year with a growth rate of 0.3%.
Thus from the details of the projects it is certain that the diabetes treatment center
which is very demanded among the diabetes patients is in a high demand. The report is made
with the purpose of presenting the authorised trustee of the hospital to indicate the probable
possibilities of the project and the estimated amount of the cost of the project and the
expected outcome of this project.