Service Line Development Plan

1159 words 5 pages
New Service Line Development Plan

Feasibility of developing an orthopedic center
The needs assessment done previously shows that orthopedic cases are expected to climb by 46%, with a 30% increase in inpatient joint and spine procedures. As well, it is expected that outpatient joint and spine procedures are expected to increase by 350%. These numbers show that within the defined market area, there is a high demand for the orthopedic center. Further research shows that the other 2 hospitals that we are in direct competition with provide strong orthopedic programs; however, both facilities are private hospitals, thereby increasing the demand for a strong orthopedic program at Trinity. We are finding that because of our prime location
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We are seeing that all of our other service lines will not only complement the orthopedic program, but they can work hand-in-hand toward making Trinity a well-respected and highly demanded campus, not only for patients, but also for physicians and nurses.
Financial feasibility
Based on previous research, we could spend less if we build a new 5000 square foot physical therapy/rehab center on campus. The cost for building is about $600,000 versus $700,000 for purchasing the space adjacent to the campus. It appears that we would have to spend approximately $3,000,000 to expand radiology and to add a second MRI. We currently have a capital reserve of about $25,000,000; therefore, it is feasible for us to institute this new service line. As well, the orthopedic center would provide for about 2100 new surgical cases and about 6500 physical therapy visits, which would give us a profit margin of approximately $2,171,500. Based on a five-year projection, it is expected that we will see about $25,000 in gross charges per orthopedic surgical case. We will also see $275 in gross charges per physical therapy treatment. The ratio of cost to charges is about 31%. With the percentage of Medicare, Medicaid and self-pay patients increasing, we can expect to have higher revenues and more pay-in for patients in the orthopedic program. The orthopedic center could help increase the utilization of Community hospital in future years, which will make-up for the declining

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