FINAL PROJECT – CAPITAL EXPENSE ITEM PRESENTATION
NURSING, SOUTHERN NEW HAMPSHIRE UNIVERSITY
IHP-45O HEALTHCARE MANAGEMENT AND FINANCE
JUNE
19,
2022
FINANCIAL
POSITION
◾
Venice
Family
Clinic
(VFC)
–
upward
trajectory
based
on
revenue
trends
since
2018
◾
Steady
increases
in
revenue
2018
–
2021
◾
2021
up
10%
over
2020
◾
Total
Assets
-
$63,556,411
year
end
2021
◾
Increase
over
2020
total
assets
by
18%
◾
Current
ratio
lands
at
5.62%
over
the
2020
figure
of
4.93
%
◾
Strong
favorable
trend
in
liquidity
◾
Cashflow
showing
net
assets
up
by
126%
◾
Total
revenue
up
over
2020
by
6,082,597
or
10%
◾
Net
in-kind
increase
of
$30,773
HEALTHCARE TRENDS
➢
Lack
of
Healthcare
Access
➢
Health
Disparities
-
minorities/vulnerable
populations
➢
Uninsured
and
under-insured
➢
Increase
in
Lifestyle-related
Diseases
➢
Increase
in
insured-high
deductible/unable
to
pay
–
bad
debt
➢
Lower
reimbursement
–
Medicare
&
Medicaid
➢
Clinics
Merging
Forces
PROPOSALa ITEMS
VFC Expanding Patient Reach
Acquisition
of
South
Bay
Family
Health
Care
(SBFHC)
November
2021
VFC
acquired
5
SBFHC
clinics
➢
Propose
New
Recurrent
Patient
Services
Department
➢
In-Home
Support
Services
(IHSS)
➢
Purchase
EV
for
IHSS
program
➢
Begin
organizational
transition
to
electric
vehicles
(EV)
➢
Expanding
VFC
patient
utilization
➢
Aligns
with
VFC
vision
and
mission
➢
Add
billable
services
to
the
RPS
department
-
profitable
<
than
3.5
years
STRATEGICa GOALS
➢
Implement
IHSS
-
VFC
to
help
larger
population
in
Greater
LA
➢
Helps
community Health
Disparity
through Health
Equity
➢
Aligns
with
vision
and
mission
while
doing
so
➢
Expands
community
goodwill
➢
Lower
carbon
footprint
with
conversion
to
EV
VFC
wide
➢
Continues
to
grow
revenue
sources
over
next
decade
Option 1: Nissan Leaf S PLUS $ 32,400
Mileage
Range
226
miles
Warranty
3/years
36,000
miles
Cargo
capacity
30.0
cubic
feet
Total
Cost
=
$36,400
w/
$4000
fees/taxes/options/chg.
stat.
*limited
space
for
medical
equipment
needed
by
provider
Option 2: Kia Nero SUV
$
41,245
EPA
Mileage
Range
=
239
Warranty
=5
years/60,000
miles
Cargo
capacity
=
53.0
cubic
feet
of
storage
Total
Cost
=
46,245
w/$5000
fees/taxes/options/chg.
stat.
*more
cargo
area
for
OT/PT/RN
larger
equipment
needs
Option 3: Hyundai Ioniq 5 SUV
$
43,650
EPA
Mileage
Range
=
220
miles
Warranty
5
years/60,000
miles
+
10-yr/100,000
PT
Cargo
space
27.2
rear/total
59.3
cubic
seat
down
Total
Cost
$
48,650
+
$5000
fees/taxes/options/chg.
stat.
◾
*most
cargo
area
for
OT/PT/RN
larger
equipment
needs
ELECTRIC
VEHICLE
PROPOSAL
OPTIONS
FINANCIALa
RESEARCH
REVENUE
SIDE
–
same
with
all
3
options
◾
Avg.
Home
Health
Visit
–
47
mins.
◾
Medicare
avg.
per
patient
reimbursement
-
$80
◾
~90%
of
all
in-home
health
agency
◾
Add
6
visits/10
hr.
day
◾
6
IHSS
visits/day
x
$80
reimb./visit
=
$480
x
7
days
=
$3,360/week
additional
cashflow
FINANCIALa
RESEARCH
EXPENSE
RELATED
–
*same
with
all
3
options
◾
Salaries/Wages/Benefits
◾
Medications
◾
Supplies
◾
Overhead
◾
*Depreciation
TOTAL
Expenses
=
$3000/week
◾
Net
revenue
$
360
/
week
or
$
18,720
/
yr.
◾
ROI
realized
before
end
of
3
rd
year
–
all
3
options
◾
Note
$7500
year
end
IRS
tax
credit
and
CA
charging
station
rebate
not
figured
in
FINANCIALa
RESEARCH
Capital Expense Request
Option 1: Nissan Leaf S PLUS $ 32,400
Total
Cost
=
$36,400
w/
$4000
fees/taxes/options/chg.
stat.
ROI
realized
end
year
2
Option 2: Kia Nero SUV
$
41,245
Total
Cost
=
46,245
w/$5000
fees/taxes/options/chg.
stat.
ROI
realized
within
year
3
Option 3: Hyundai Ioniq 5 SUV
$
43,650
Total
Cost
$
48,650
+
$5000
fees/taxes/options/chg.
stat.
ROI
realized
within
year
3
Plus
–
organizational
resources
impacted
(slide
12)
Offset
by:
IHSS
Gross
Revenue
Projected
per
Year
-
$174,720
ORGANIZATIONALa RESOURCES
Capital
Expense
◾
Hyundai
Ioniq
5
SUV
Financial
◾
Fees/Options/Taxes/etc.
◾
Insurance
◾
Install
Charging
Station
◾
Supplies
to
Stock
EV
◾
Part-Time
OT/RN
Hire
Personnel
◾
MD/DO
◾
OT/PT
◾
RNs
◾
Legal
◾
Billing/Coding
Materials
◾
Supplies/Pharmacy
to
stock
EV
◾
Technology
items
-
laptop
Institutional
Memo
(electronic)
◾
Department
Heads
◾
Pharmacy
◾
Determine
needed
meds
and
stocking
levels
◾
Legal
◾
Create
policies
◾
Materials
◾
Bump
stocking
levels
to
stock
EV
with
needed
supplies
Meetings
–
Virtual
/
In-person
Training
–
New
Hires
/
Existing
Re-
deployed
COMMUNICATION
STATEMENTS
Consolidated
Statement
of
Activities
Consolidated
Statement
of
Cash
Flows
Consolidated
Statement
of
Financial
Position
Mission
Statement
EXPENSES
+
Gross
Revenue 2021 Proposed
2022
Recurring
Patient
Services
(+10%)
$
950,000
$1,045,000
Expenses
$
100,000
◾
Salaries/Wages/Benefits
▪
Supplies
$
700,000
$
725,950
$
120,000
Pharmacy/Medical/Office/Tech
▪
Other
Expenses
Equipment/Legal/Utilities/etc.
$
170,000
$
151,000
$
177,049
$156,603
$
180,049
$
211,811
-
Total
Expenses
(
+3.71%
)
$1,021,000
$1,059,602
$1,237,810
= Excess (Deficit) Revenues over Expenses
($
71,000)
($
14,602)
($
92,810)*
*7500
tax
credit/$1500
CA
rebate
charging
station
install
IHSS
(projected)
REASONING
◾
Financial
Trends
◾
Revenue +10% 2020
-
2021
◾
Expenses +3.71% 2020
–
2021
◾
Resources/Expenses
Impacted
Salaries Overhead
Legal Depreciation
Supplies/Waste Equipment
Insurance
Miscellaneous
Pharmacy
RATIOSa ANDa CALCULATIONS
Nissan Leaf S PLUS
Kia Nero SUV
Hyundai Ioniq 5 SUV
Total
Cost $36,400
$46,245
$48,650
◾
NPV $58,830.31
$43,985.31
$41,580.31
◾
IRR 47.449%
33.700%
31.071%
◾
Payback
Period
Realized: End
of
year
2
Within
year
3
Within
year
3
Ratios and Calculations
◾
Option
1:
$
58,830.31
◾
Option
2:
$
43,985.31
◾
Option
3:
$
41,580.31
◾
Option
1:
47.449
%
◾
Option
2:
33.700
%
◾
Option
3:
31,073
%
◾
Option
1:
Realized
at
end
of
year
2
◾
Option
2:
Realized
within
year
3
revenue
stream
◾
Option
3:
Realized
within
year
3
revenue
stream
NET PRESENT VALUE
INTERNAL RATE OF
RETURN
PAYBACK PERIOD
PROJECTED DEPARTMENTAL BUDGET
SHORT TERM IMPACT
◾
Resource
Impacts
–
Financial
Line
Items
◾
Increase
in
assets,
liabilities,
and
expenses
◾
Current
Cash
and
Equivalents
◾
Cash
Flows
from
Investing
Activities
◾
Salaries/Wages/Benefits
expense
line
◾
Negative
cash
flow
initially
◾
Then
improved
revenue
stream
w/3
rd
party
reimbursement
◾
Current
Ratio
affected
w/
change
in
assets
to
liabilities
◾
Resource
Impacts
–
Personnel
◾
Hiring/Onboarding/Training
new
hires
◾
Retraining
existing
personnel
to
fill
shifts
◾
Support
personnel
–
billing
and
coding
◾
Legal
SHORT TERM IMPACT
LONG-TERM IMPACT
◾
Extremely
favorable
once
ROI
realized
◾
Generates
solid
source
of
revenue
◾
Expansion
envisioned
◾
Expense
line
items
normalize
◾
Salaries/Wages
remain
constant
◾
Overhead
impacted
minimally
◾
Helped
with
conversion
to
EVs
◾
Revenues
and
assets
steadily
rise
COSTa /a BENEFITa ANALYSIS
IHSS
Program
Implementation
◾
Percentage
increase
in
financial
need
in
2022
proposed
budget
is
16.8%
◾
Initial
outlay
of
$48,650
◾
Hiring
of
2
part-time
mid-level
employees
◾
Offset
by
gross
revenue
of
$174,720
Favorable Financial Position
◾
Current
ratio
–
5.62%
(Total
Current
Assets
over
Total
Current
Liabilities)
◾
Equipment
purchase
expenditure
jumped
64.2%
from
2020
to
2021
◾
Proof
VFC:
committed
to
expansion
moving
vision
and
mission
forward
COSTa /a BENEFITa ANALYSIS
Capital
Expense
Item:
Hyundai
Ioniq
5
SUV
➢
C.
Cash
flow
($)
Cumulative
cash
flow
($)
Cf
year
0
(48,650)
(48,650)
Cf
year
1
*18,720
18,720
Cf
year
2
*
20,000
38,720
Cf
year
3
*
21,000
59,720
Payback
period
realized
within
year
3
of
use
➢
Net
Present
Value
$
41,580.31
➢
Internal
Rate
of
Return
31.071%
STRATEGICa PLANNING
IHSS
program
is
in
keeping
with
both
vision
and
mission
statements
▪
First
phase
converting
to
EV
▪
lower
carbon
footprint
▪
Continued
expansion
VFC
reach
and
services
KPIs
◾
Improve
delivery
of
care
and
outcomes
◾
Efficient
use
of
resources
◾
Provide
understanding
of
efficiency
and
effectiveness
in
key
operational
areas
◾
Increase
patient
mix
inclusivity
◾
Promotes
public
trust
◾
Impacts
the
justice
index
of
healthcare
POTENTIALa CONFLICTS
◾
Proposed
program
does
not
address
primary
care
for
VFC
patients
◾
Devotes
substantial
resources
to
program
serving
small
subset
of
greater
LA
population
◾
Better
for
VFC
to
focus
on
ever-
growing
homeless
population
◾
Unfavorable
community
optics
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