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Executive Summary

Mr Wayne approached Mr Gordon in order to take up his business and clients as Mr Gordon was retiring from practice and wanted to leave his patients in good and reputable hands. With the arrival of the new Affordable Care Act, Mr Gordon was not sure whether he should continue his practice and with retirement within sight he thought this was the best opportunity to leave the practice and make a responsible organization take care of his patients. Dr. Gordon’s practice was in Homestead, Miami-Dade County. His patient base was largely cash paying patient base complimented by Medicare, Medicaid and Managed Care.

Dr. Wayne, Dr. Tim Drake and Dr. Alfred Pennyworth are part of the general partners in Gotham Internal Medicine Physicians, LLC, a physician group of eight (8) internal medicine physicians in the Kendall and Westchester areas. This is a great opportunity for GIMP to diversify its location base and also enlarge its clientele base.

Although having said a Cost Benefit analysis needs to be done as it needs to be figured out whether GIMP will make a profit after inheriting the clients from Mr. Gordon and incurring the restructuring cost that are a necessity to operate in an efficient manner. Though Mr. Gordon’s operations yield a profit as of now (of around $45,000 in 2014) it needs to be seen that whether this profit would still be available after the implementation of the Affordable Care Act. The main problem faced here is the fact that, as per the new Act, the uninsured and cash paying patients will be enrolled in some insurance plan within the Managed Care Organizations; most probably in lower coverage plans with high deductibles. This is very problematic as there is a high concentration of cash paying patient clientele under Mr Gordon.

Industry Analysis

TMR Gordon has around 3500 active patients. The majority of visits are made by cash paying patients who are not enrolled by any insurance. With the introduction of the new act this client base is likely to decrease considerably as people will be enrolled in some of insurance. The second highest number of patients came from Medicaid HMO.

Medicaid comprised of 17% utilization per month. However, interestingly it should be noted that the annual number of visits are made more by the Payor type in the Medicare Sector. This is followed by Medicaid HMO and then patients who pay by Cash.

The Market Analysis

The market for patient clientele is very lucrative. In that, there are a lot of patients in the region. Dr. Gordon, catered to 3.5 patients an hour for a total of more than 40 hours a week. This comes up to more than 150 patients in a week. However the only difference between the Homestead and the Kendall and Westchester area, is that the number of patients are categorized quite differently in Payor category. The Medicare population will also drastically increase as Baby Boomers are now reaching the 65 years benchmark. Moreover Medicaid is not increasing its rate and has decided to stay constant whereas Medicare is increasing its rate by a mere 1.5% which will not be very beneficial owing to the fact that the inflation rate will grow around 2.5% making the effectiveness of this increase negligible.