Business plan financial section

The financial component of this business plan's objective is to provide an estimate of the implementation cost and expenses over a three-year timeframe. This section will explain the financing source, the cost of deploying the EMR in the hospital and the four clinics, and the maintenance costs over a three-year period. A 200-bed hospital employs around 450 part-time and 1000 full-time employees. Typical yearly hospitalizations vary from 8,000 to 11,000, inpatient surgeries are around 2000, outpatient volume is around 5000, and 40,000 outpatient visits are made each year. As a result, the system must be effective and efficient in order to lower operating costs while improving care quality. The table below describes the costs that the hospital will incur to implement and run the system. The first table indicates upfront costs and the second one shows recurring costs on an annual basis.


5.1 Pre-Installation Costs


This section focuses on the costs the healthcare facility needs to pay upfront in order to acquire and implement the system.


Item


Amount (US Dollars)


Hardware


44,000


EMR Software (Certified Vendor)


60,000


Implementation assistance costs


10,000


Employee training


8,000


Total Costs


$122,000


The hospital will spend $122,000 to implement the system within the facility and the clinics.


The table below indicates the recurring expenditure that the healthcare organization will incur on an annual basis. Since the hospital chose to implement an on-site as a Service system and not the Web-based software as a Service system, which requires monthly subscriptions, the costs will be lower.


Item


Yearly Amount (US Dollars)


Salaries (3 ICT Staff)


57,000


Employee training (after upgrades and refresher)


2,000


Ongoing maintenance fees


3,000


Total Costs


62,000


Besides the cash reserves, the hospital will need external funding to implement the system as described in the table below. However, the facility will bear the costs for maintenance and upgrades.


5.2 Desired Financing


Item


Amount (Dollars)


Hospital Reserves


43,000


Donors and Well-wishers


37,800


Federal Financial Support


38,000


Total Desired Financing


118,800


The hospital will obtain financial resources from well-wishers, the state government and cash reserves. All these will amount to $118,800 for the EMR to be implemented successfully.


5.3 Estimated Cost of System Maintenance for a Three-Year Period


Item


FY1 ($)


FY2 ($)


FY3 ($)


Consultation fees


800


500


613


Utilities


300


313


324


Copying fees


134


153


147


Paper


113


97


93


Permits


267


289


276


Security systems


89


91


88


Costs of data storage


310


324


347


Total Expense


2,013


1,767


1,888


The expenses indicated above are averagely $1890. The costs will keep decreasing for the near future while the quality of care will improve.


5.3 The Total Costs for Implementing the System in the First Year of Operation


Item


Amount (Dollars)


Upfront Installation costs


122,000


Recurring costs


62,000


System maintenance


2,013


Total Costs for Year 1


$186,013


Therefore, the hospital will need at least $186,013 to implement and run the system in Year 1.

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