Case Study 1: Hollow Heart Catheterization Center (HHCC)

Hollow Heart Catheterization Center (HHCC)

Answer 1

OPERATING EXPENSES

FIXED

VARIABLE

Installment on loan for medical equipment

$55000

Utility

$500

Internet

$75

Payroll: Physician

$350K per year

Payroll: RN

$70K per year

Payroll: Technician

$50K per year

Payroll: Secretary

$45K per year

Malpractice insurance: Physician

$8K per year

Malpractice insurance: RN

$2K per year

DEA/DPH/license costs

$650 per year

Miscellaneous

$220

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Answer 2

Revenue

2009

2010

730

700

90%=$2400*657=$1576800

90%=$2400*630=$1512000

10%=$3000*73=$219000

10%=$3000*70=$210000

$3000+$1576800+$219000=$1798800

$3000+$1512000+$210000=$1725000

Fixed Expense

2009

2010

$55000+ (3000*12) + ($500*12) + ($75*12) +$350K+$70K+$50K+$45K+$8K+$2K+$650

$55000+ (3000*12) + ($500*12) + ($75*12) +$350K+$70K+$50K+$45K+$8K+$2K+$650

=$55000+ $36000+$6000+$900+$350K+$70K+$50K+$45K+$8K+$2K+$650+$200

=$55000+ $36000+ $6000+$900+$350K+$70K+$50K+$45K+$8K+$2K+$650+$200

=$1273100

=$1273100

Variable Expense

2009

2010

$550*730=$401500

$550*700=$385000

Total expense

2009

2010

$1273100+$401500=$1674600

$1273100+$385000=$1658100

Operating Income

2009

2010

$1798800-$1674600=$124200

$1725000-$1658100=$66900

Answer 3

 

Procedures performed

500

600

700

800

Net Revenue:

 

Private (10%)

150000

180000

210000

240000

Medicare (90%)

1080000

1296000

1512000

1728000

Total Net Revenue

1230000

1476000

1722000

1968000

 

Expenses:

 

Fixed Expenses

$780,690

$780,690

$780,690

$780,690 Variable Expenses

275000

330000

385000

440000

Total Expenses:

$1,055,690

$1,110,690

$1,165,690

$1,220,690

 

Operating Income

$174,310

$365,310

$556,310

$747,310

Answer 4

2009 (No. of cardiac catheterization performed

730

 

Payroll taxes

30%

Physician

$350,000

$479.45

Payroll: ...