International Medical Center startup

Medical Clinic Business Plan
web-site: www.nbscience.com
by Dr.Eugene Zadorin, PhD
Eugene.zadorin@nbscience.com

Executive Summary
Healthcare in Ukraine is dominated by the state institutions (above 99% of all visits). However,
state healthcare is considered unsatisfactory by patients, medical professionals and the government as
it provides neither prevention nor satisfactory treatment of diseases, is customer-unfriendly, creates
unacceptable work environment for physicians and nurses and is a heavy financial burden for the state.
Customer satisfaction index is 1.3 out of 4.0 for the state healthcare system.
In 2011, only 35% of Ukrainian population considered their health as good. Around 94% of the households self-reported that at least one family member needed medical help during 2011. This negative situation should drive private medical business development.
The market of private healthcare is here defined as all health-related services rendered to individual
customers by private institutions duly licensed by the respective authorities.
Twenty percent of Ukrainians believe that they can use private healthcare if needed and another 30%
claim they will be able to start using private healthcare in the future. Thirty percent of Ukrainians would
fully switch to private healthcare, if they could afford it. Most are willing to pay about 10% of their income.
There are approximately 400 players (except dentistry) in the Ukrainian private healthcare market. They
can be further divided into following categories: Universal clinics offering a wide range of medical
services (incl. inpatient); Specialized clinics offering a wide spectrum of
medical services (incl. inpatient) in certain cluster of medical specialties;
Territorial clinics offering ambulatory outpatient services in multiple medical specialties;
Specialty medical centers offering ambulatory outpatient services in certain cluster of medical
specialties (e.g., Ob&Gyn); Lab diagnostics centers (Delloite report, 2012).
As part of its ongoing efforts to improve access to health care in Ukraine, International Medical Center is subsidizing the start-up and first year of operations. The business will be owned and managed by Dr Andrew as a sole proprietorship. He will be responsible for creating a viable and profitable business medical services for patients not only from Ukraine but also from other countries. Throughout the first year, Scientific Director of clinic, Dr.Eugene Zadorin will work closely with advisers to get the clinic on a sound financial and operational footing, using business plan as a guiding management tool.
Center will focus on diagnosing and treating conditions of all ages . The clinic will utilize equipment and a trained staff that will be able to optimize the care of each patient. He understands that there are many factors that can affect health, including exercise, diet, environment and heredity. International Medical Center will try to provide the most comprehensive medical care possible in order to optimize the care and well-being of each patient.
In the Center will also carry out minor procedures in office, but only after both risks and benefits have been explained and understood and written consent has been obtained from the patient. Center will refer patients, when appropriate, to specialists and/or to hospitals for tests, further treatment and therapy.
Center will be assisted by one Cardiologist ( Dr.Eugene Zadorin) and 4 employees: Therapist, nurse, accountant, receptionist. Ongoing training and support for these employees will be provided throughout the first year.
The marketing strategy involves a combination of print media advertising, website development, networking, and promotional events, all aimed at residents living within 540 miles of the clinic. With other practitioners in Ukraine, nephrologists, we project a gradually increasing patient load over the first several years, as we find out place in the community.
At first, the clinic will be dependent upon the support received from Investor They will also cover Scientific Director salary and payroll taxes for the first year of operations. As patient volume increases, we will begin supporting our expenses from revenues. At the end of the first year, the subsidies will cease, and Scientific Director compensation will become one of the clinic’s expenses. We expect to incur operating losses in the first three years, but have planned for a strong cash balance to keep the business running. We will begin making a small profit in the fourth year.
Dr. Zadorin will use all experience and knowledge to create a successful and profitable practice. His past experience in medicine ( nephrology,cardiology,therapy) and pharmaceutical business, clinical research, business administration with his progressive and diversified approach to each patient will allow him to rapidly grow a large and devoted patient base.

Objectives
The objectives for the first years of operation include:
To create a medical practice to patients that will exceed patients’ expectations
To provide high-quality health care to residents of the area
To create a medical practice that helps serve the community’s needs
To form a practice that is able to survive off its own cash flow in 10 months or less
To increase the number of patients by 20% per year through superior performance and word-of-mouth referrals
To develop a comprehensive website that includes online booking capability, as well as additional information about the practice, hours, demographic information, health information and much more
Collections of 95% or more and missed appointments under 5%
Average visits per month of 300 to 350 general profile patients within the first 10 months (2400 visits per year) and 400+ patients by the beginning of the second year
Mission
The mission of International Medical Center is to promote the medical consultations and well-being of the local population by providing accessible, high-quality care for people of all ages . International Medical Center is committed to providing services that will exceed the expectations of our patients, resulting in a successful and profitable business.
Keys to Success
Patients
Focus on dialysis and medical consultations
Educate patients on the importance of preventative care
Educate patients as to the importance of yearly check-ups
Implement an aggressive and accurate recall system in which to remind patients to have regular check ups
Staff and Office Organization
Recognize that the office staff is as crucial, if not more crucial, than the physician(s) in the success of the business
Create incentives by allowing the office staff to benefit from increased profits generated by the office
Create a streamlined office system to minimize patients’ waiting time
Finances
Keep a low overhead
Optimize the number of patients we can see in a hour while providing quality medical care
Use the latest in electronic billing and/or utilize an outside billing company
Use this International Medical Center business plan to review and guide management decisions
Marketing and Sales
Aggressively market and create a presence in the community by giving high school talks, calls, hospital talks and doing volunteer work, business society meetings, and much more
Network to obtain referrals from other professionals, such doctors, Specialists, Hospital Admissions
Have an office front on a busy street with accessible parking (Obolon district in Kiev)
Locate in an area with a high patient-to-doctor ratio
Locate in close proximity to the medical hospital with easy access to specialty care
Company Summary
International Medical Center will offer dialysis and medical consultations for all ages in this area and the surrounding communities. The clinic will utilize a trained staff, new equipment, sound medical training, a referral system and nearby hospital facilities in order to maximize the care for each patient.
Location and Facilities
The start-up requirements include rental of a building for use by the clinic. The building was built in 2000 and has undergone a complete remodeling. The total office space will be approximately 300 sq. feet. . The office is located just off the main street and the office has blacktop parking for 10 cars plus a generous carport, as well as a wide driveway entrance for patient convenience.

Company Ownership
International Medical Center will be created as a sole proprietorship owned by Investor and operated by Dr Zadorin
Start-up Summary

It is estimated that start-up expenses will near $47,000. This amount of money will be used to purchase office equipment, medical supplies, furniture, stationary, and other start-up expenses. We will also need approximately $10,000 for cash on hand at start-up. Expenses and initial cash requirements will be funded by Investors
Start-up Requirements
Start-up Expenses
Legal & Accounting $970
Insurance $1,000
Marketing $2,000
Computer $3,000
Medical License $2000
Communications $150
Medical Equipment $17,000
Office Supplies $4,000
Office Furniture $2,000
Marketing Plan ? $3,000
Rent $12000
Total Start-up Expenses $47,000
Start-up Assets
Cash Required $10,000
Other Current Assets $0

Total Assets $10,000
Total Requirements $57,000
Services
In general, International Medical Center will provide dialysis and medical services for all ages, as well as providing multiple procedures to create a complete health care solution. The costs will depend upon the materials used, the physician’s time and the amount designated for each procedure.
International Medical Center philosophy is that optimal health Our goal is to educate our patients as well as treat them. Therefore, our services will also provide group classes and teaching sessions for our patients. Subjects could include nutrition, diabetes, hypertension, and much more.

International Medical Center will focus on each individual case. After each procedure and where appropriate, each patient will be offered education in rehabilitation, nutrition and exercise as it relates to each particular case. Our goal is to create the most well-rounded experience for each patient in order to optimize their health.
International Medical Center will maintain privacy according to HIPAA rules. All patients will be welcome, including the ones with no insurance. No one will be turned down for medical care. Our clinic will hold no prejudice to race, creed, color or socioeconomic status.
Information Management and Technology
In order to comply with HIPAA laws and improve efficiency of billing, we will use a secure, networked, electronic medical records system.
Hardware
The clinic will use the most advanced computer, server and software systems, as well as Internet connections, in order to optimize the potential EMR and PMS systems software as well as in other software and network system utilized resulting in faster verification, efficient patient information transfer, reduction in administrative costs, computer breakdown or malfunction, as wells as allowing outside access for the physician in order to access important patient information for hospital admissions and in other important situation where information is needed about the patient in optimizing the care of the patient.
Billing
International Medical Center will utilize an outside electronic medical billing company. This will allow the medical practice to focus primarily on patient care satisfaction. The electronic medical billing company will use electronic claim billing and filing, which in turn will allow us to fully utilize the benefits of electronics claim filing (i.e. faster payment for processing insurance claims) while at the same time allowing us to maximize valuable clinic time and man power. The billing company charges 1% of the total expenses collected and 6% – taxes.

EMR (Electronic Medical Records)
International Medical Center is strongly considering EMR, in order to secure the success and efficiency of the office. Below are a few of the benefits and features we may expect to gain from utilizing the EMR system. This technology is expected to increase the systematic approach for each patient, while at the same time decreasing risk while maximizing profits. We feel that all of these technological enhancements will increase our chances of success.
BENEFITS:
Increases Revenue by allowing more patient to be seen without working harder or longer, improves collections through management of referral and eligibility data, tracks managed care contracts, managed care payments/bonuses, provides valuable tools to generate research income, and provides for coding optimization.
Reduces Expenses by reducing transcription costs, data analysis costs, paper storage and access costs, staff costs, and paper/forms costs.
Reduces Risks by improving the quality of documentation, maintaining security and integrity of data, checks for drug interactions, helps to analyze payer relationships, and helps keep documentation and coding in compliance with laws.
Improves Quality by improving documentation, presenting and managing protocols, tracking and summarizing indicators, alerting providers, and helping to track recalls.

GENERAL FEATURES:
Document Generation
Workflow Management
Image Management
Electronic Superbill and Billing System Interface
Coding Optimization
Referral Management
Eligibility Verification
Contract Management
Outcomes Analysis
Lab Order Entry/ Lab Result Reporting
Follow-up/Recall Tracking
Patient Instructions
Fax Capability
Prescription Generation
Graphing
Voice Recognition Option
Advanced Security
Electronic Data Interchange (EDI)
Mobile Solutions
Scheduling Option
Market Analysis Summary
in Ukraine 180 private medical centers, 25 in Kiev
around 20-30 USD for procedure

Market Segmentation

General medicine:
As for 2011, the number of per capita visits to state clinics was 11. Six visits were caused by actual or
suspected disease. Reasons for visits to clinics were: disease 60%, disease prevention 35% and to receive some kind of a document 5%.
Private healthcare market reached UAH 3.5 bn of revenues in 2009 and unofficial payments in the state
healthcare reached about UAH 2.5 bn; total healthcare expenditures were estimated at about UAH 48
bn (5.4% of GDP). That is lower than 6.2% in Poland, 6.8% in Czech Republic and 8.3% in Hungary.

Development of the middle class with its westernized demand for goods and services as well as unsatisfactory work of the state healthcare system create favorable environment for development of the private healthcare in Ukraine.

Main market forces that drive development of the private healthcare market are demand of consumers,
demand of medical professionals and demand of the state.
Consumers demand reliable and qualitative healthcare. They also prefer customer oriented clinics.
Medical professionals demand environment that would allow them to treat patients as necessary,
would provide significantly (in times) higher salaries and would support their professional growth.

Average cost of primary outpatient visits in Ukraine is about USD 31 (vs. USD 150 in the US, USD 120 in the UK and USD 85 in Russia).

Competitors:

Salaries (NET) per month in private outpatient
clinics (Kyiv):
Doctors: USD 1,000-1,200;
Nurses: USD 400-600.
Salaries level in regions is 15-20% less than in Kyiv.
Expected rental rates:
Rental rates today in Kyiv are from USD 10 to USD
50 per m2 per month. It is possible to fix rent with
growth by 3-4% per year. Additional fit-out costs
USD 250-300 per m2.
Competition and Buying Patterns
In general, competition is small.
Strategy and Implementation Summary
Our strategy for a successful start is based on quickly creating a high profile and name recognition within the community through public speaking, networking, promotional events, and print advertising. These marketing tools will be followed up with a sales strategy that relies on a pleasant and accessible location, well-trained, highly motivated employees, and a commitment to provide the best care and patient experience possible in every interaction. The advantage of this strategy is that every element of it is within our control.
With few local doctors for this community, competition will be less of a concern than will education of potential patients about the benefits of seeing any doctor at all
Competitive Edge
International Medical Center will have an competitive edge based on position, timing, quality of care, availability to patient, after-hour care, weekend hours, quality time, pleasant staff and office environment. All of these factors will result in patient satisfaction and high referral rates.
In general, competition among is small.
Marketing Strategy
Upon opening up International Medical Center, it is important to create momentum before the actual day of opening. In conjunction with a Marketing and Advertising Group this momentum will be created 1 month prior to the opening date. We will first try to get our name recognized in conjunction with promoting the location and the services we can offer.
We feel that the most important way to become established is create a presence among the community. The best way to create this is through a combination of the strategies outlined below, in order to accomplish greater visibility to prospective patients and institutions.
Marketing Materials
All written materials used to promote the medical office will share a professional and polished look and feel. Our office will carry our own leaflets, to be made available to all patients, containing factual information about the services provided. This leaflet will also contain some biographical information, location, photos and other promotional material. This leaflet will be used to help promote International Medical Center both as handouts for patients within the clinic, as well as potential patients outside the clinic.
The clinic will provide multiple education brochures from the Medical Association. We will have an area where health information will be displayed and dispersed in the form of packets and brochures. In addition, patient information handouts will also be available via the EMR system and the website.
There will be a number of patient-friendly brochures, videos, mailings, and other materials used to promote the medical office. We will have multiple ads in magazines and newspapers, as well as a commercial to announce the opening of International Medical Center.
International Medical Center will employ commercials, mail-outs that may include new patient discounts, yellow pages, magazines, newspapers, and other forms of advertising.
Promotional Events
We will set up an open house for surrounding businesses and potential patients to let them see our new clinic. During these open houses, we will provide readings, and much more.
International Medical Center will hold health information workshops with the help of community organizations for the general public , as well as in local and public areas of interest. Our goal will be to bring new patients into the clinic but to also create word of mouth. New patients will have time to ask questions about medicine and new patients will be introduced to the new clinic. Our goal is to meet and promote the clinic to as many people before the opening of the clinic, as well as after the clinic is open.
Networking
International Medical Center will become a member of the business community. We will join and attend key business events that will help promote our new business. We will also promote ourselves in local business directories. We will also network through various organizations, such as local patients organizations, as well as to promote and generate further interest in our services.
International Medical Center will incorporate reciprocal advertising with other nearby nephrologists, urologists s, and hospitals. International Medical Center will obtain additional patients via referrals.
Accessibility
International Medical Center will adopt several strategies to ensure patient satisfaction and word of mouth advertising. First our hours will include after after-hours care and allow patients to come into clinic after they get off work. We will also be open on Saturdays. This means there will be several days that we will be open till 7:00 P.M. and that we will also be open on Saturdays.
Marketing Expenses
Print Distribution:

Magazine A: a monthly magazine that is mailed to approximately 2,000 specialists within our area. Quarter Page Ad: $656.00 / Ad with 3 month contract, $627.00/ Ad with 6 month contract, $568.00/Ad with 12 month contract.
Professional Directory C: They will have advertising opportunities in their Professional Directory that is published in the Fall. I do not have pricing details guaranteed. Estimate a Quarter Page Ad: $1,000/Year
Direct Mail Marketing:
Targeting a specific prospect and demographic. Designing a targeted campaign, printing, and mail processing: Estimate: $00.75/piece processed. Effective direct mail campaign ranges between 5,000-35,000. Mailing to the same market 3 times over a six month period.

Sales Strategy
The sales process begins when a patient calls us, comes in for an appointment, or accompanies a family member to an appointment. In every interaction, we must be accessible, courteous, knowledgeable, and helpful.
Location:
The clinic will be located in the Obolon district of Kiev. Patients will easily be able to find the clinic. Signs will be posted in strategic places to help assure patients comfort in finding our location. We feel that our location is a great asset and will strengthen our future success.
Flexible Hours:
International Medical Center will adopt several strategies to ensure patient satisfaction and word of mouth advertising. First, our hours will include after after-hours care and allow patients to come into clinic after they get off work. We will also be open on Saturdays. This means there will be several weekdays that we will be open till 7:00 P.M. and that we will be open on Saturdays. We will also take walk-ins in order to provide the best possible convenience for the patient.
Environment, Appearance, Etiquette and Overall Patient Experience:

Patients’ needs and concerns will be addressed and they will be asked politely to have a seat in the waiting room. Upon arrival to the waiting room they will experience comfortable seating, good lighting, soft music or T.V, reading material and the general comforts appreciated by any patient. The walls will have beautiful art and there may even be a fish tank. The clinic rooms will be professional, clean and organized and the walls will be decorated with medical posters that will help explain the most common conditions. During the consultation the doctor will have a white coat and tie and will conduct himself in a professional and courteous manner.
Pricing Strategy:
The pricing for consultations and visits, as well as any procedures will be billed according to industry standards(30 USD/medical consultation). We will be consistent with our competitors and the national averages. Most pricing will be dependent upon agreements with the five largest insurers in the area.
Sales Literature:
The clinic will provide multiple education brochures from the Medical ASSOCIATION. We will have an area where information will be displayed and dispersed in the form of packets and brochures. In addition, information handouts will also be available via the EMR system and website.
Sales Forecast
The first month prior to opening will be used to get the new office in order, set up appointments and begin marketing activities. The following months International Medical Center will continue advertising. The following tables basically represent the amount of money that the practice expects to be making.
Note that we list no direct cost of sales. This is standard for the medical office industry, since all medical supplies and waste disposal are handled as monthly supply orders, not inventory. These expenses can be found in the projected Profit and Loss statement.
SALES MONTHLY 2016 (USD)
30 USD/medical consultation/10 consultations/day (2400 medical consultations/year)
Sales in total:

Sales by type of medical service:

Red Medical consultations
Sales by year 2016-2021 (USD)
Milestones
We have established some basic milestones to keep the business plan priorities in place. Responsibility for implementation falls on the shoulders of Dr.Zadorin. This Milestones table will be updated as the year progresses using the actual tables. New milestones will be added as the first year of operations commences.

Milestones
Milestone Start Date End Date Budget Manager Department
Design and place first ads 9/1/2015 11/1/2015 $2,000 Dr. Detroit & Jack PSFM & GMC
Close on Building 10/1/2015 10/2/2015 $225,000 Dr. Detroit PSFM
Redecorate and Furnish Clinic 10/1/2015 11/15/2015 $13,000 Dr. Detroit PSFM
Install and Test EMR system 11/1/2015 12/15/2015 $4,000 Dr. Detroit & Jan PSFM & GMC
Sign contract for medical billing 11/1/2015 11/1/2015 $0 Dr. Detroit PSFM
Employee training 12/1/2015 12/31/2015 $3,950 Dr. Detroit & Liz PSFM & GMC
Finish Printed Materials 12/1/2015 12/31/2015 $3,500 Dr. Detroit & Jack PSFM & GMC
Monthly Financial Review 1/2/2016 12/31/2016 $0 Dr. Detroit, Liz, & John PSFM & GMC
Monthly Operational Review 1/2/2016 12/31/2016 $0 Dr. Detroit & Liz PSFM & GMC
Hold Open Houses 1/2/2016 1/31/2016 $500 Dr. Detroit PSFM
Begin first appointments 2/1/2016 2/10/2016 $0 Dr. Detroit PSFM
Track Patient Load, first three months 2/1/2016 5/1/2016 $0 Dr. Detroit PSFM
Totals $251,950
Web Plan Summary
International Medical Center will have a clinic website where patients can learn about our clinic, health information, location, map, hours of operation, biographical information about the physician, procedures and much more. We will also consider educational videos for renal chronic failure, hypertension and many other important health issues facing society today, as well as specific health issues facing the local area.
Website Marketing Strategy
The website marketing strategy will be focused on increasing placement in search engines. The practice and website will focus on the local population. We will develop strategies to create links from local websites in the community to our business. Information about the website will be on the office brochure, cards and future advertisements.
Development Requirements
The website will be created by two companies, one to design the “front-end” and another which will implement it as a working site. The user interface will consist of a clean and simple design in which to comfortably navigate. The major content of the site will be information about the practice, hours, location, general medical information, insurance accepted and hospitals covered. The “front-end” design will be created in Fireworks MX software and the back-end design will be created in MYSQL and PHP. The website will be hosted on a dedicated server. Future development may include a registration database for new patients and a question and answer forum.
Management Summary
International Medical Center will initially have two employees: a receptionist and a medical assistant. They will both be paid hourly wages. As the practice grows, we will add additional personnel to help with referrals and additional responsibilities that will be needed at that time.
During the first year, International Medical Center physician will work full-time at the clinic, but will be paid directly, and all of his benefits and payroll taxes will be paid by them. Starting in the second year, the physician will draw his salary directly from International Medical Center .
We will create a policy and procedures manual that will act as a guide and reference to sick pay, leave, vacation, hourly wages, payment, etc. The philosophies and guidelines in this manual will help maintain proper organizational structure.
There will be a mandatory staff meeting on Wednesdays at 12:00 noon. There will be a pre-written list of items that will address ways to improve the practice. Everyone is expected to attend. All employees, including the doctor, will be expected to continue to better themselves in regards to both skills and knowledge. The staff of the clinic will have specific duties that they will perform on a daily basis. They will be responsible for their individual duties and must complete them in a systematic time-efficient manner.
Once a month, Dr. Zadorin will meet with each employee individually, and review their goals and performance for the month. Employees will have access to administrative consultants at General Medical for the first year, and will be expected to follow the suggestions that come out of joint meetings with Dr. Zadorin and the consultants. Employees who consistently do a poor job will be written up and after two write-ups will be put on suspension. If the employee again fails to correct the problem that employee will be dismissed. All write-ups will occur in the presence of a witness and will be recorded.
Personnel Plan
They will have a good salary that corresponds to their level of skill and total contribution to the medical practice. . The final goal is to create a profit-sharing opportunity in which to foster loyalty, longevity and contentment in the workplace.

Personnel Plan
Year 1 Year 2 Year 3 Year 4 Year 5
Scientific Director $0 $60,000 $60,000 $60,000 $60,000
Receptionist $2,000 $2,000 $2,000 $2,000 $2,000
Accountant $ 6000 $ 6000 $ 6000 $ 6000 $ 6000
Nurse $ 4,000 $ 5,000 $6,000 $7,000 $8,000
Health Insurance $2,000 $2,000 $2,000 $2,000 $2,000
Therapist (only salary,full time, no additional fees) $ 4 000
(960 procedures) $ 5 000
$ 6 000 $ 7 000 $ 8 000
Cardiologist ( full time,, no additional fees) $ 6 000
(2400 consultations) $ 7 000
$ 8 000
$ 9 000
$ 10 000

Total People 6 6 6 6 6
Total Payroll $24,000 $87,000 $90,000 $93,000 $96,000

Financial Plan
It is estimated that start-up expenses will be $47,000. This amount of money will be used to purchase office equipment, medical supplies, furniture, stationary, and other start-up expenses. This amount, and a starting cash balance of $10,000, will be financed by Investor
The Scientific Director salary will be paid by Investor throughout the first year.
At the end of the first year, subsidies will end. Although sales are projected to increase steadily, and the physician will take reduced salary in the second through fourth years, we project a loss in the second and third years. This is due to the loss of expense subsidies, and the additional expense of the physician’s salary and related taxes. We expect to begin breaking even in the fourth year, and have budgeted a cash balance to carry us through the years of loss.
Important notation/limitations in viewing the financial plan:
Start-up Funding
start-up Funding
Start-up Expenses to Fund $47,000
Cash Requirements from Start-up $10,000
Additional Cash Raised $0
Cash Balance on Starting Date $10,000
Other Investment $0
Additional Investment Requirement $0
Total Planned Investment $47,000

Projected Profit and Loss
The profit and loss statement shows our increasing ability to cover the expenses of the business over the first year. Although we will operate at a loss for much of this year, our cash balance will be maintained by subsidies
In the second year, International Medical will assume the full expense of the physician salary, as well as related payroll taxes. This increase, combined with small increases in operating expenses due to increased patient load, will keep us operating at a loss in the second and third year, but we expect to begin turning a small profit in the middle of the fourth year. Again, these losses will not cause us to go into a negative cash position at any point.
We would show a profit of $49,000 in the second year, and $70,000 in the third year.

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