A physician is considering opening a home health agency to serve her patients and others in the community. She read the home health industry in 2015 is expected to earn $5.3 billion on $73 billion in revenues (IBIS World). Create a scratch budget for the physician based on the assumptions below. How is the agency expected to perform relative to the industry?

Total visits: 12,000

Reimbursement per visit: $75

Management and support salaries: $120,000 (1 office manager and 1 clerical support)

Staff productivity: 2,000 patients per year (8 patients/day * 5 days/week * 50 weeks/year)

Staff wage: $30 per hour for 2,080 hours per year

FICA: 7.65% of total salary

Health insurance: $500 per month per employee

Retirement 5% of total salary

Supplies: $7.50 per visit

Travel: 10 miles per visit @ 50per mile

Rent: $2,000 per month

Insurance: $1,000 per month

Utilities: $24,500

Other: 2% of non-salary and fringe benefit expenses

Total Revenue: $_________

Management & clerical salaries: $_________

Staff salaries: __________

FICA: __________

Health insurance: __________

Retirement: __________

Supplies: __________

Travel: __________

Rent: __________

Insurance: __________

Utilities: __________

Miscellaneous expense: __________

Total Expense: $_________

Profit: $_________

Margin: __________