Strategic Plan Pro Forma and Feasibility

Strategic Plan Pro Forma and Feasibility

In this module, students will focus upon the budgeting process. 

1) Team Reading: Strategic Plan Pro Forma and Feasibility 

2) Team Discussion: What is your team strategic plan Pro Forma, or budget? Discuss and draft a pro forma. 

3) Team Assignment: Your team assignment instructions are located HERE. As a team, you are to complete the first rough draft of the project pro forma interpretation. Submit your completed Module 4 Team Assignment to the Team Assignment 4 Dropbox as well as posting to this Discussion Board.

					
	[ACO, Company Name]				
	Risk Management Plan Pro Forma				
	[Date]				
					
	Gray cells contain calculations that should not be altered.				
	ACO Data		Look for red triangles in the corners for notes		
	Required rate of return (Investment - cost savings/value) 	10%			
	Tax Rate	30%			
	Number of Assigned Patients to ACO is 10,000 @$500 Per Member Per Month	 $5,000,000 	Monthly Medicare ACO Capitation Revenue (For All ACO Provider Types)		
	Number of Assigned Patients to ACO is 10,000 @$500 Per Member Per Month	 $60,000,000 	Annual Medicare ACO Capitation Revenue (For All ACO Provider Types)		
	Initial Investment in Plan	YEAR	1	2	3
	Hardware (e.g., integration between providers-hospital servers)	$25,000.00 			
	Software (e.g., risk management software)  	$15,000.00 			
	Development (e.g., Add position of ACO Risk Manager and ACO Trainer)	$150,000.00 			
	Total Initial Investments	$190,000.00 			
					
	Capitated: Cost Savings Benefit Value due to Risk Management Plan	YEAR	1	2	3
	Direct Value (Estimated Savings per Unnecessary Hospital Admission).		$1.00 	$1.00 	$1.00 
	Direct Value (Estimated Savings per Reduced Duplication of Services).		$1.00 	$1.00 	$1.00 
	Direct Value (Estimated Savings for Disease Prevention).		$1.00 	$1.00 	$1.00 
	[Other benefits]		$1.00 	$1.00 	$1.00 
	[Other benefits]		$1.00 	$1.00 	$1.00 
	[Other benefits]		$1.00 	$1.00 	$1.00 
	[Other benefits]		$0.00 	$1.00 	$1.00 
	[Other benefits]		$0.00 	$1.00 	$1.00 
	[Other benefits]		$0.00 	$1.00 	$1.00 
	Total Benefits		$6.00 	$9.00 	$9.00 
					
	Costs (Excluding Initial Capital Investments)	YEAR	1	2	3
	Develop Training Material with Risk Management Objectives		$1.00 	$1.00 	$1.00 
	Set up software with Risk Management Objectives for Providers of Care		$1.00 	$1.00 	$1.00 
			$1.00 	$1.00 	$1.00 
	Office Supplies		$1.00 	$1.00 	$1.00 
	Depreciation on capital expenditures (calculation uses three-year period)		$63,333.33 	$63,333.33 	$63,333.33 
	Hosting, domain-name registration for shared Risk Management Software		$150.00 	$150.00 	$150.00 
	Train 5 additional PT trainers for provider education in Risk Management		$1.00 	$10,000.00 	$10,000.00 
	[Other costs]		$1.00 	$1.00 	$0.00 
	[Other costs]		$1.00 	$1.00 	$0.00 
	[Other costs]		$1.00 	$1.00 	$0.00 
	Total Costs		$63,491.33 	$73,490.33 	$73,487.33 
					
	Totals	YEAR	1	2	3
	Net Benefits (Costs)		($63,485.33)	($73,481.33)	($73,478.33)
	Tax		($19,045.60)	($22,044.40)	($22,043.50)
	Value after tax		($44,439.73)	($51,436.93)	($51,434.83)
	Depreciation added back		$63,333.33 	$63,333.33 	$63,333.33 
	Cash flow	-$190,000.00	$18,893.60 	$11,896.40 	$11,898.50 
	Cumulative cash flow	-$190,000.00	($171,106.40)	($159,210.00)	($147,311.50)
					
	Evaluation Metrics	 			
	Net present value (NPV)	($154,052.75)			
	Internal rate of return (IRR)	#NUM!			
	Payback period (in years)	Exceeds 3 years