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NR533-Week-5_Break_Even_Analysis_Assignment_Guidelines_and_Rubric

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Chamberlain College of Nursing NR533 Financial Management of Healthcare Organizations
Week 5: Break-even Analysis

Assignment Guidelines with Scoring Rubric

Purpose
The purpose of this assignment is to provide learners with the opportunity to develop break-even-analysis
skills.

Due Date: Sunday 11:59 p.m. MT at the end of Week 5

Total Points Possible: 100
REQUIREMENTS:
Answer the questions and complete the calculations required for the assignment.

Submit your answers on a Word document, with the heading of Week 5 Assignment. For the questions
requiring a written response, please adhere to proper grammar and syntax, and provide references. For the
questions requiring calculations, show all your work and follow the format that has been provided for the
calculations in the lesson for Week 5.


PREPARING THE PAPER
Break-Even Analysis Case Study

You and several of your colleague business partners have decided to establish an outpatient fertility clinic in
your service area. All of you are very familiar with this patient population base, have completed an extensive
market analysis that demonstrated a great need for the service, and are comfortable with setting up a business
and the costs associated with this special group of patients.

As part of the business plan, you and your partners will need to convince stakeholders that this new service
endeavor will be viable. They will want to know how many patient visits will need to occur annually and how
long it will take for the service to be at least cost neutral or profitable. To provide them with this information you
will perform a break-even analysis. Use the following data and conduct the analysis accounting for the
contribution margin of each patient acuity category.

 Fixed Costs: $9,788,000 (start-costs, specialty physicians, anesthesiologists, APNs, staff
nurses and other staff salaries, specialty equipment, other miscellaneous)
 Variable costs: $500/patient visit (specialty equipment, oxygen supplies, other
miscellaneous)
 Clinic days: Monday–Saturday—312 days/year
 Projected patient visits per year: 7488
 Patient charges by patient acuity category:
o Simple (15%)------------$2,000/visit
o Moderate (60%)--------$6,500/visit
o Complex (25%)---------$10,000/visit
1. Describe your approach to this Case Study. In addition to the numbers given, what do you need to
know before you can calculate the break-even analysis?


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Break-even Analysis
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, Chamberlain College of Nursing NR533 Financial Management of Healthcare Organizations
2. Perform the calculations needed for the break-even analysis. Show your work, formulas used, and
reference the formula. When calculating the patient visits per day, round to the nearest whole number.
After you’ve completed the calculations, record your results in the appropriate place in the table.

Break-even Analysis Data Table

Acuity Percentag Charge Visit Charges Visits Charges per Contribution
Category e% per s per per Year per Day Margin
Visit Year Day

Simple 15% $2,000

Moderat 60% $6,500
e

Complex 25% $10,00
0

Expected Total Daily Charges

Expected Total Daily Revenue

Break Even point in days

Break Even point in visits



3. How many patient visits are expected per day?
4. What is the contribution margin of each category of patient?
5. Based on the data and your calculations, what is the expected daily revenue?
6. How long (in days, months, or years) will it be before the return on investment begins?
7. How many patient visits will be required to reach the break-even point?
8. Discuss your analysis. Is the project viable and profitable service? Does the analysis support moving
forward with the business? Cite specific data from you analysis to support your interpretation.




NRstudy
This 533source
Break-even Analysis
was downloaded AGR
by 100000838234991 4.30.18nhs
from CourseHero.com on 08-16-2022 12:45:48 GMT -05:00
2

https://www.coursehero.com/file/34027592/71999d0a68010660162e0bdc11e78df9-NR533-Week-5-Break-Even-Analysis-Assignment-Guidelines-and-Rubric/

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