Fairbanks Memorial Hospital, an acute care hospital with 300 beds and 160 staff physicians, is one of 75 hospitals owned and operated by Health Services of America, a for-profit, publicly owned company. Although there are two other acute care hospitals serving the same general population, Fairbanks historically has been highly profitable because of its well-appointed facilities, fine medical staff, and reputation for quality care. In addition to inpatient services, Fairbanks operates an emergency room within the hospital complex and a stand-alone walk-in clinic, the Better Care Clinic, located about two miles from the hospital.
Todd Greene, Fairbanks’s chief executive officer (CEO), is concerned about Better Care Clinic’s financial performance. About ten years ago, all three area hospitals jumped onto the walk-in-clinic bandwagon, and within a short time, there were five such clinics scattered around the city. Now, only three are left, and none of them appears to be a big money maker. Todd wonders whether Fairbanks should continue to operate its clinic or close it down. The clinic is currently handling a patient load of 45 visits per day, but it has the physical capacity to handle more visits—up to 60 per day. Todd has asked Jane Adams, Fairbanks’s chief financial officer, to look into the whole matter of the walk-in clinic. In their meeting, Todd stated that he visualizes two potential outcomes for the clinic: (1) the clinic could be closed or (2) the clinic could continue to operate as is. As a starting point for the analysis, Jane has collected the most recent historical financial and operating data for the clinic, which are summarized in Table 1. In assessing the historical data, Jane noted that one competing clinic had recently (December 2008) closed its doors.
Furthermore, a review of several years of financial data revealed that the Fairbanks clinic does not have a pronounced seasonal utilization pattern. Next, Jane met several times with the clinic’s director. The primary purpose of the meetings was to estimate the additional costs that would have to be borne if clinic volume rose above the current January/February average level of 45 visits per day. Any incremental volume would require additional expenditures for administrative and medical supplies, estimated to be $4.00 per patient visit for medical supplies, such as tongue blades, rubber gloves, bandages, and so on, and $1.00 per patient visit for administrative supplies, such as file folders and clinical record sheets.
Although the clinic has the physical capacity to handle 60 visits per day, it does not have staffing to support that volume. In fact, if the number of visits increased by 11 per day, another part-time nurse and physician would have to be added to the clinic’s staff. The incremental costs associated with increased volume are summarized in Table 2. Jane also learned that the building is leased on a long-term basis. Fairbanks could cancel the lease, but the lease contract calls for a cancellation penalty of three months’ rent, or $37,500, at the current lease rate.
In addition, Jane was startled to read in the newspaper that Baptist Hospital, Fairbanks’s major competitor, had just bought the city’s largest primary care group practice, and Baptist’s CEO was quoted as saying that more group practice acquisitions are planned. Jane wondered whether Baptist’s actions should influence the decision regarding the clinic’s fate. Finally, in earlier conversations, Todd also wondered whether the clinic could “inflate” its way to profitability; that is, if volume remained at its current level, could the clinic be expected to become profitable in, say, five years, solely because of inflationary increases in revenues? Overall, Jane must consider all relevant factors—both quantitative and qualitative—and come up with a reasonable recommendation regarding the future of the clinic.
Better Care Clinic Historical Financial Data
CY 2008 Jan/Feb 2009
Number of visits 41 45
Net revenue $1,524 $1,845
Salaries and wages $428 $451
Physician fees 533 600
Malpractice insurance 87 107
Travel and education 15 0
General insurance 22 28
Utilities 41 36
Equipment leases 4 5
Building lease 400 417
Other operating expenses 288 300
Total operating expenses 1818 1944
Net profit (loss) ($294) ($99)
Better Care Clinic Incremental Cost Data
Medical supplies $4.00 per visit
Administrative supplies $1.00
Total variable costs $5.00 per visit
Salaries and wages $100
Physician Fees $267
Total daily semi-fixed costs $367
Note: The semi-fixed costs are daily costs that apply when volume increases by 11–20 visits. However, the physical capacity of the clinic is only 60 visits per day.
CASE REPORT ASSIGNMENT
Use the text book as guide and most importantly listen to my audio recording, case report, with hints on how you should approach your work. You are being asked to apply basic managerial financial concepts using Breakeven Analysis. You have an opportunity to show what you’ve learned so far in this course. I want you to carefully review each question and if it helps use EXCEL in preparing your analysis. Please show me all of your work including any formulas used in your analysis. I look forward to getting your assignment for review. This case report study is a real scenario. I hope you enjoy the journey. Good Luck!
1. Using the historical data as a guide, construct a forecasted profit and loss statement for the clinic’s average day for all of 2009 assuming the status quo. With no change in volume (utilization), is the clinic projected to make a profit?
2. How many additional daily visits must be generated to break even?
3. Thus far, the analysis has considered the clinic’s near-term profitability—that is, an average day in 2009. Redo the forecasted profit and loss statement developed in Question 1 for an average day in 2014, five years hence, assuming that volume stays constant (does not increase). (Hint: You must consider likely changes in revenues and costs due to inflation and other factors. The idea here is to see whether the clinic can “inflate” its way to profitability even if volume remains at its current level).
4. Suppose you just found out that the $3,215 monthly malpractice insurance charge is based on an accounting allocation scheme that divides the hospital’s total annual malpractice insurance costs by the total annual number of inpatient days and outpatient visits to obtain a per-episode charge. Then, the per-episode value is multiplied by each department’s projected number of patient days or outpatient visits to obtain each department’s malpractice cost allocation. What impact does this allocation scheme have on the clinic’s true (cash) profitability? (No calculations are necessary).
5. Does the clinic have any value to the hospital beyond that considered by the numerical analysis just conducted? Do the actions by Baptist Hospital have any bearing on the final decision regarding the clinic?
6. What is your final recommendation concerning the future of the walk-in clinic?
Correlation of Marx and Hobbes Disclaimer: This work has been put together by an understudy. This isn't a case of the work composed by our expert scholastic scholars. You can see tests of our expert work here. Any sentiments, discoveries, ends or proposals communicated in this material are those of the writers and don't really mirror the perspectives of UK Essays. Distributed: Tue, 03 Oct 2017 Differentiation and analyze the perspectives of Marx and Hobbes with regards to the premise of lawfulness in the public eye. Marx and Hobbes are incredible rationalists with exceptional commitment towards the hypothesis of human culture bringing about the communist upset prompting socialism by Marx and the 'condition of nature' and 'implicit understanding' by Hobbes. Despite the fact that the two thinkers are particular in their very own speculations, a relative investigation of contrasts and likenesses can be drawn dependent on the period they lived in and how this has affected their convictions which was then passed on to the up and coming human culture. The political thinker Thomas Hobbes (1588– 1679) was one of the principal present day see hypothesis which gave a knowledge into why a legislatures genuine specialist ought to be complied. The basis depended on bona fide authenticity got from common and material contention. Thomas Hobbes originates from the season of war, clashes and numerous history specialists propose that he was controlled by dread. This could have been a parameter to his view on human culture. In his book titled 'Leviathan', Hobbes portrays 'the condition of nature' as the characteristic state of human culture which is a condition of contention and war. Amid this stage, a man is seen to be reasonable vain person administered by cravings and feelings of scorn, pride, lose hope, and so on. Moreover the non-presence of government builds the imbalance among featuring the need of a state wherefore everybody must be equivalent. This imbalance, to Hobbes, involve that individuals can slaughter each other which prompt incredible suspicious of each other and to keep away from hazard man evades human contact. The essential objective to men turns into the security to get away from the condition of nature. The recognition was that it must be accomplished by ruling every other man however since all are equivalent this turns into the aspiration for everybody and it prompts a gridlock circumstance. In any case, sooner or later individuals will likewise consent to choose a law-provider and law-authority i.e. they choose a sovereign and this is the snapshot of the implicit agreement. The sovereign can be characterized as a ruler with genuine power and unapproachable to the general population he runs the show. Anyway Hobbes contended that the right to speak freely and different rights have a place in the condition of nature, this blame is important to keep up request else it will prompt clash and a move back to the condition of nature. The implicit agreement subsequently is an agreement between the general population not between the general population and the ruler. So with the end goal to keep up peace and security, men surrender their opportunity to the sovereign to accomplish assurance consequently. In Hobbes see, the advancement of human culture occurs in two phases from the condition of nature to common society. At the point when men choose to choose the sovereign they are not any more crude creatures yet residents of a common society. Hobbes' understanding was that an absolutists decide with sovereign that can't be judged or rebuffed. Subsequently, as indicated by Hobbes there are just two conceivable outcomes for human culture: either to be in a condition of nature portrayed by war and struggle or get peace in the common society controlled by an absolutist sovereign by surrendering their opportunity. The German thinker Karl Marx (1818-1883), was a humanist, financial expert, columnist, history specialist and progressive communist. He contributed a lot of hypotheses in financial fields which later shaped solid establishment of current learning of work and capital, and has affected wide assortment of progressive monetary musings. Marx's hypothesis about society, financial matters and legislative issues – aggregately known as Marxism conviction that human social orders advance through class and battle. A contention between a proprietorship class that controls creation and a confiscated working class that gives the work to generation. He considered private enterprise the "tyranny of the bourgeoisie," trusting it to be controlled by the well off classes for their very own advantage; and he anticipated that, as past financial frameworks, free enterprise created inside pressures which would prompt its implosion and substitution by another framework: communism. He contended that class oppositions under private enterprise between the bourgeoisie and low class would bring about common laborers' triumph of political power as a fascism of the working class and in the long run build up a tactless society, communism or socialism, a general public administered by a free association of makers. In parallel to trusting the way that communism and socialism were inescapable around then, Marx effectively battled for their execution, contending that social scholars and underprivileged individuals alike should complete sorted out progressive activity to discount private enterprise and present financial change. Marx has been depicted as a standout amongst the most powerful figures in mankind's history. Progressive communist governments embracing Marxist ideas framed presence and power in an assortment of nations in the twentieth century, prompting the arrangement of biggest communist states, for example, the Soviet Union in 1922 and the People's Republic of China in 1949. Many guilds and laborers' gatherings worldwide are impacted by Marxism which likewise prompted foundation of different hypothetical deviations, for example, Leninism, Stalinism, Trotskyism, and Maoism, which were created accordingly. Marx is normally alluded alongside Emile Durkheim and Max Weber, as one of the three essential engineers of current sociology. The way that the two rationalists originates from various occasions, represented by various occasions and circumstances, had extraordinary motivation on their contemplations and their inference on what the end condition of society ought to resemble. They have made their commitment to what human culture as of now has and will keep on developing. They infer that the advancement of people into numerous anticipated stages reflect propelling conditions for humanity in one another's point of view. Hobbes initiated amid the season of war and strife, at which people essential prerequisite of security was denied. Marx, who experienced exploitative impacts of private enterprise on work, thusly has a basic view on free enterprise. Nonetheless, he holds an exceptionally positive perspective of things to come and furthermore trusts that the essential logical inconsistencies in the entrepreneur society would prompt its own fall driving the route for upset. He additionally expect that the misuse of work would not exist in a socialist society. The result of Marx' organize hypothesis is along these lines a reasonable and unmistakable to the way that the general public is described by equity. Marx's and Hobbes contrast was in their perspectives of the implicit agreement between individuals. Hobbes expresses that individuals will intentionally surrender their privileges of opportunity to a free ruler remaining outside the agreement. This is very crucial hypothesis of the implicit agreement as most would see the autonomous senator as likewise bound by the agreement. This hypothesis was additionally outlined that an absolutist ruler is important to keep men in profound respect. Marx in any case, has experienced the disconnecting impacts of the private enterprise and henceforth proposes a socialist perfect of a collective society. One of the well known Hobbes explanations about the condition of nature was, "Life is brutish, short and cruel, in the condition of nature." Humans are always in rivalry for assets, regardless of whether it's essential or auxiliary. They would achieve any degree important to address those issues. This feeling of urgency to satisfy needs make frailty inside the human culture. Hobbes composed the book "Leviathan", the word Leviathan implies the most ideal method for securing nationals would be by selecting a legislature that is ground-breaking and scaring. Hobbes trusted that life isn't improper, yet unethical in a condition of nature. Along these lines, by slaughtering a person in a condition of nature would be the equivalent as the giving them a chance to live. The reason is that an administration must influence laws and controls with the end goal to make a humanized society to result negligible wrongdoing. Notwithstanding these, Hobbes acts of kindness have been perceived as compelling in molding individuals and government with respect to a condition of a humanized society. Subsequently, perspectives of Hobbes and Marx had diverse way to reach to a similar assurance despite the fact that they had comparative destinations of conveying enhancement to the general public. Hobbes' "Leviathan" clarifies the great administration of common and common laws, as it enables individuals to make themselves the general population of the general public. On opposite side, Marx states "history is financial matters in real life". Subsequent to examining the distinctions and likenesses of Karl Marx and Thomas Hobbes, we can suspect that the two thinkers settled on the idea of socialism over uniqueness. Marx holds exceptionally calculative and quantifiable hypotheses, as his speculations are shaped normal laws. Despite the fact that, the contrasts between these hypotheses are very unmistakable, their destinations and the message is a similar which is the foundation and enhancement of a common society.>GET ANSWER