TULSA MEMORIAL HOSPITAL
Break-Even Analysis
1. Using the historical data as a guide, construct a pro forma (forecasted) profit and loss statement for the clinic's average month for all of 2014 assuming the status quo. With no change in volume (utilization), is the clinic projected to make a profit?
-No, the clinic is projected to experience a loss. Pro Forma Average Month: | | | | | | | | Number of visits | | 1,350 | | | | | Net revenue | | $54,888 | | | | | Salaries and wages | | $13,542 | Physicians fees | | 18,000 | Malpractice insurance | | 3,215 | Travel and education | | 602 | General insurance | | 843 | Subscriptions | | 0 | Electricity | | | …show more content…

Does this allocation scheme bias your breakeven analysis? (No calculations are necessary.)
-Yes, additional daily visits will increase monthly malpractice insurance charge.

8. After all the work thus far in the analysis you suddenly realize that the hospital, as a for-profit corporation, must pay taxes. What impact does tax status have on your breakeven analysis?
-Net loss can generate tax deductible

9. 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?
-The urgent care center can help mitigate the problems of primary care physician shortages and already crowded emergency departments. The urgent care center will benefit patients because the urgent care center offers short wait times and charge less than emergency department. Further, no appointments are necessary and evening and weekend hours are frequently available.

- if Tulsa Memorial hospital close the urgent care center, primary care physicians likely will work for another healthcare provider. Also, Baptist brought the city’s largest primary care practice. In that case, Baptist primary care physicians likely will refer patient to future Baptist hospital.

10. What is your final recommendation concerning the future of the walk-in clinic?
-Tulsa Memorial hospital do not want to lay off primary care physicians in the case of closing the