Financial analysis practicum within the healthcare sector

As your practicum experience proceeds, talk with individuals in your practicum setting about social, political, technological, and/or financial considerations related to the implementation of an evidence-based practice project. For instance, you may opt to meet with a nurse manager or executive involved in financial matters to do a cost-benefit analysis or a return-on-investment analysis, or to develop a pro forma statement about how much it would cost to implement one practice versus another.

Healthcare has become one of the more contentious and polarizing subjects within the United States. The COVID-19 pandemic illustrated many of the shortcomings within the Untied States healthcare system and how these shortcomings can have grave implications for society at large. As of the time of this writing over 600,000 people have died as a result of COVID-19. Many of these deaths can be attributable to weak healthcare infrastructure as many hospitals around the nation experienced heavy capacity constraints. Many others experienced a serve lack of personal protective equipment which ultimately exposed healthcare professional, staff, and the surrounding communities to the virus. Many healthcare experts have noted that many of these deaths were preventable where it not for misinformation, political actions on the part of governs, and lack of a coordinate national effort. This not only lead to large amounts of death, but also mental health issues for many millions of Americans coping with the loss of a significant individual with their life (Baer, 2015). One beneficially element of the COVID-19 virus on the both the healthcare industry and my practicum experience was the use of technology to help solve pressing solutions. In this instance, to combat the spread of the virus the hospital that I conducted my practicum experience looked to adopt innovation and promising technologies. These technologies include the implementation of both Teladoc and Telehealth services throughout its facilities. Here, I was able to conduct an evidence-based practice project related to the financial implications of implemented these projects. Here, I conducted a return on investment calculation for management to better determine how viable these programs would be after COVID-19 abated (Alemi, 2014).

To begin, my evidence-based project was heavily focus on both the financial implication of both Teladoc and Telehealth. The hospital in which I conducted my practicum experience was looking for a method in which to continue services in an efficient manner without sacrificing the need to cater to those suffering from COVID-19 (Bakken, 2004). Here, the hospital also wanted to replace a portion of its lost revenue by supplementing its offerings with other healthcare service offerings. Management believe that technology would be the key to both of these initiatives as the industry overall was seeing very high adoption rates of technology in various unrelated fields due to COVID-19. For example, online orders at Amazon, according to its latest filling, increase nearly 28% from the year ago period. For delivery services such as Uber and Grub hub saw large adoption rates as well. The telemedicine industry, due to supply constraints realized a nearly 20% increase in adoption rates over the past year. In fact, experts predict that telemedicine and it relates services will increase 20% per year over the next decade. As a result, management in the hospital wanted to capitalize on this trend by offering a differentiated product for a low base fee (American Health Information Management Association, 2020).

To begin, the pricing strategy for the offering will center around a low monthly base fee and a combination of consultation fees that are based on the product being demanded by the consumer. This pricing structure will first be very transparent to the consumer prior to engaging with the company. As an introductory product, the staring base fee will begin at $25. The additional service fees will be based partiality on internal profit margin projections and partially on the pricing model of competitors in the field. As the industry is just beginning, there is currently not a standard pricing model that is being leverage by competitors. For example, “Doctors on Demand” utilizes a monthly subscriptions model. However, competitors such as “Her,” “K-Health,” and “Hey Doctor” do not charge a subscription service and instead generates revenue based entirely on service charges (Bashshur, 2020). Thankfully the company where I conducted my practicum has unique competitive advantage through its physical operations that only telemedicine providers do not have. By combining offline and online product offerings, the healthcare institution where I worked, had the ability to offer customers flexibility. This was an element that many of the other telemedicine providers could not provide as they were primarily online. Due this flexibility, a strong reputation for service, and strong brand recognition, the company decided to test a monthly subscription model.

As a practicum student I performed pro-forma financials based on various assumption and adoption rates. The firm provided me with the costs of offering various product offerings within the hospital. My objective was to identify a break-even point in which the services would become profitable and make estimates on how many clients would need to adopt the products in order to do so. I was also tasked with analyzing the various components of the product offerings to identify which product offerings offer the most margin relative to others. Starting out the firm offered only basic consultations, evaluations, and tests over the internet. Due primarily to legal concerns, the company wanted to be very conservative in the manner in which it offered telemedicine. Likewise, the company also wanted to ensure it maintained is brand positioning in the market. To do this the company wanted to make sure the product offering was well-received prior to large rollout. From my analysis, I determined that the initial investment in technology, security, technology professionals and staff training would be very high. The break-even of the product offering would not occur for roughly 7 years, assuming the 20% industry growth rates prescribed by experts.