Description
The Assignment: (1- to 2-page Business Plan and Excel Sheet)
To complete this Assignment, you will:
Complete a cost-benefit analysis (CBA) using the Shasta Family Practice case study.
Prepare a 1- to 2-page Business Plan that you will submit to the Shasta Vice President Dr. Rudy Mason that synthesizes your CBA results.
Please be aware that you will submit
two files
for this Assignment.
Part I. The CBA (1-page Excel spreadsheet)
Download the Shasta Family Practice spreadsheet (in the Learning Resources)
Using the data provided in the Shasta Family Practice case study, insert the fixed and variable costs associated with each physician extender alternative into the spreadsheet. The data will be entered into the cells shaded green. Do not enter data in the cells shaded in pink.
The spreadsheet will automatically calculate annual costs. Once you have your cost results, you will be able to propose the physician extender plan that will provide the most cost benefit for the three outpatient clinics.
Save your results in the Excel spreadsheet for submission.
Part II. Business Plan (2
–
3 pages)
In order to communicate your results, you will prepare a professional business plan for delivery to Dr. Rudy Mason, Vice President of the Shasta Family Practice. You will prepare a Business Plan that addresses the following:
Explain the concept of using a physician extender and the two types of extenders.
Provide a brief description of the services of each clinic.
Identify the purpose and assumptions associated with a cost-benefit analysis (CBA)
Share why a CBA was appropriate for determining the physician extender alternative.
Identify the FC, VC, and TC for an Outpatient Surgery Center.
Identify the FC, VC, and TC for an Internal Medicine Center.
Identify the FC, VC, and TC for an Eldercare Clinic.
Explain which physician extender alternative provides the most cost-benefit given the CBA results for each clinic.
Explain and support your recommendations for assessing the clinical and financial outcomes.
Make sure to follow APA guidelines for your business plan format and support your business plan with references.
Model
CASE 5 SHASTA FACULTY PRACTICE: Cost-Benefit Analysis
Copyright 2018 Foundation of the American College of Healthcare Executives. Not for sale.
Model with Questions, Student Version
This case analyzes the use of physician extenders in three settings: an outpatient surgery
preoperative and postoperative clinic, an internal medicine (family practice) clinic, and an eldercare clinic.
The model is designed to focus on one setting at a time. Thus, each clinic has to be analyzed
independently.
The model consists of a complete base case analysis–no changes need to be made to the existing
MODEL-GENERATED DATA section. However, values in the INPUT DATA section of the student
spreadsheet have been replaced by zeros. Students must select appropriate input values and enter
them into the cells with values colored red. After this is done, any error cells will be corrected and
the base case solution will appear. The KEY OUTPUT section includes the most important output
from the MODEL-GENERATED DATA section.
Outpatient Surgery Preoperative and Postperative Clinic
INPUT DATA:
KEY OUTPUT:
Clinic Data:
Number of days per year
Number of visits annually
Number of physician FTEs
Physician costs
Physician revenues
Cost, Productivity,
and Reimbursement Assumptions:
Assumed total volume increase
Extender annual compensation
Extender assists physician:
Physician productivity gain
Physician billing gain
Extender replaces physician:
0
0
0.00
$0
$0
Historical
Using one extender to*
Assist/work alone
Replace one phys.
Act independently
Expected volume**
Maximum
Volume
0
#DIV/0!
#DIV/0!
#DIV/0!
0
*Assumes historical physician productivity
**Assumes physician productivity increases can handle hig
0.0% (Assumed total increase in clinic volume)
$0
0.0% (Increase in number of physician billings due to extender)
0.0% (Increase in physician billing amount due to extender)
Page 1
Extender productivity
Extender reimbursement %
Assists/works alone mix
Model
0.0% (Extender visits as a percentage of average physician volu
0.0% (Percentage of physician reimbursement paid to extender)
0.0% (100% = used only to assist physician; 0% = used only to w
in-between indicate mix of both roles)
MODEL-GENERATED DATA:
Current (Historical) Situation
Baseline physician revenues
Baseline physician costs
Contribution
$0
0
$0
Using One Extender to Both Increase Physician Productivity and Bill Separately (Assumes Historical Physici
as Enhanced by Exte
Baseline physician revenues
$0
Incremental physician revenues
#DIV/0!
Extender revenues
#DIV/0!
Total revenues
#DIV/0!
Baseline physician costs
$0
Extender costs
0
Total costs
$0
Contribution
#DIV/0!
Change from historical:
Dollar change
Percentage change
#DIV/0!
#DIV/0!
Using One Extender to Replace One Physician (Assumes Historical Physician Productivity)
Baseline physician revenues
Incremental physician revenues
Extender revenues
Total revenues
Baseline physician costs
Incremental physician costs
Extender costs
Total costs
Contribution
$0
#DIV/0!
#DIV/0!
#DIV/0!
$0
#DIV/0!
0
#DIV/0!
#DIV/0!
Change from historical:
Dollar change
Percentage change
#DIV/0!
#DIV/0!
Page 2
Model
Adding One Extender to Practice Independently (Assumes Initial Physician Productivity)
Baseline physician revenues
Extender revenues
Total revenues
Baseline physician costs
Extender costs
Total costs
Contribution
$0
#DIV/0!
#DIV/0!
$0
0
$0
#DIV/0!
Change from historical:
Dollar change
Percentage change
#DIV/0!
#DIV/0!
Volume Growth Without Using Extenders (Assumes that Physicians Can Increase Productivity to Meet Inc
Baseline physician revenues
Incremental physician revenues
Total revenues
Baseline physician costs
Contribution
Change from historical:
Dollar change
Percentage change
$0
0
$0
0
$0
$0
#DIV/0!
Page 3
Model
12/1/2017
ves. Not for sale.
nt surgery
c, and an eldercare clinic.
o be analyzed
made to the existing
tion of the student
ut values and enter
be corrected and
important output
Contribution
$0
#DIV/0!
#DIV/0!
#DIV/0!
$0
Dollar
Change
#DIV/0!
#DIV/0!
#DIV/0!
$0
Percentage
Change from
Historical
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
productivity
vity increases can handle higher volume
nic volume)
an billings due to extender)
mount due to extender)
Page 4
Model
Page 5
Model
ase Productivity to Meet Increased Volume)
END
Page 6
Question 1
Describe the differences between nurse practitioners and physician
Question 2
Consider the Outpatient Surgery Preoperative and Postoperative Clinic.
a. What type of extender is most suitable for this clinic? Justify your answer.
b. Assume that one extender is hired and that the number of physicians remains at
the level given in exhibit 5.1. Furthermore, the extender can be used both to increase
physician productivity and to increase volume. What would be the financial effect on
the clinic?
c. Now repeat the analysis, but assume that the extender replaces one physician.
d. Repeat the analysis again, but now assume that the extender is used solely to
increase the clinic’s capacity. (The extender acts independently to increase patient
volume.)
e. Which of the three scenarios (increasing physician productivity/capacity, replacing
a physician only, or increasing capacity only) appears to be best at this point?
f. Suppose that the expected volume increase could be met by increasing the
productivity of the current physician staff. How would this fact influence the final
decision?
increase
eplacing
Question 3
Consider the Internal Medicine Clinic. Repeat Question 2 in this setting.
Question 4
Consider the Eldercare Clinic. Repeat Question 2 in this setting.
Question 5
Compare the relative attractiveness of using extenders at the three clinics.
Explain your results.
Question 6
Considering all your findings, what are your conclusions and
recommendations regarding the use of physician extenders?
Question 7
In your opinion, what are three key learning points from this case?
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