Kaline Hospital (KH) is a 380-bed, general medical and surgical facility located in Pacific View, a mid-sized city in the Pacific Northwest. As a public hospital, it is collectively funded by the city and Jacob county in which the city is situated. Because KH is largely publicly funded it has a contractual obligation to provide care for the medically underserved, treating many who have been or would be turned away by other hospitals. The hospital is also the backup regional trauma center and receives local accident and emergency patients when the primary trauma center is at capacity. Survey data for the latest year available shows that 45,202 patients visited the hospital's emergency department. The hospital had a total of 16,732 admissions, and its physicians performed 4,942 inpatient and 3,042 outpatient surgeries.

Current Financial Situation Given the areas demographic trends discussed above, the citys and countys financial conditions have been reasonably stable. The implementation of the Affordable Care Act has improved finances over the past several years, however there are early indications that area growth may be slowing. In addition, the state is considering changes to the Medicaid program that would, if adopted, negatively impact KHs future financial health. Should this happen, the payer mix which currently favors privately insured patients may become less profitable. The loss of employers and the growing unemployment rate have combined to slow the growth of tax revenues for the city and one of the counties the other county has remained relatively stable. Accordingly, the Regional Hospital Authority is now suggesting that KH begins to trim expenses while looking for new, more profitable services to offer.

Create a 3 year projection analysis based on the assumptions and needed additional assumptions :

The financial analysis component should cover the 3-year operating period 2021-2023 and include quarterly projections for operating revenue and expense for the new opportunity. The nature of any start-up capital costs should be identified but do not need to be quantified or included in the projections. For example, if it believed that a new ambulance would be necessary to support the proposed expansion that should be noted in the discussion; however, there will be no requirement to include any capital budget items in the analysis. For the analysis period, all capital items will be leased.

If expenses exceed revenues the reasons for the shortfall should be discussed and justified because they may require additional public funding.

Table Urgent Care Center Assumptions Metric 1.75% 0.75% 9.00% -2.00% $67,500 6.00% Assumption Average change in expense Average change in amount charged per visit Average change in patient visits (after year 1) Goal for total operating cost change Average salary and benefit per employee Discount rate Urgent Care Center patient projections (year 1) - Visits per month - Charge per visit - Average percentage of charge collected Start of operations Operating expenses - Monthly lease of facility - Monthly lease of equipment - Medical supplies per month - Office supplies per month - Other expenses per month Number of FTEs employees (clinical and admin.) Startup costs 650 $ 265 87.00% 01/01/21 $ 1,500 $ 890 $ 645 $ 390 $ 200 28 None Table Urgent Care Center Assumptions Metric 1.75% 0.75% 9.00% -2.00% $67,500 6.00% Assumption Average change in expense Average change in amount charged per visit Average change in patient visits (after year 1) Goal for total operating cost change Average salary and benefit per employee Discount rate Urgent Care Center patient projections (year 1) - Visits per month - Charge per visit - Average percentage of charge collected Start of operations Operating expenses - Monthly lease of facility - Monthly lease of equipment - Medical supplies per month - Office supplies per month - Other expenses per month Number of FTEs employees (clinical and admin.) Startup costs 650 $ 265 87.00% 01/01/21 $ 1,500 $ 890 $ 645 $ 390 $ 200 28 None