Hiring a Nurse Coordinator: A Financial Management Plan of a New Hospital Owned Ambulatory Surgical Center and

How to Justify and Hire an Un-Budgeted Position

Business Plan

Courtney D. Frost, MPH, FACMPE

July 20, 2018

This paper is being submitted in partial fulfillment of the requirements of Fellowship in

the American College of Medical Practice Executives.

 

 

Table of Contents

Cover Sheet/Title Page

Table of Contents

Project Summary 1

Executive Summary 1

Part I: The Organizational Plan 4

A. Summary Description of the Business 4

B. Products or Services 7

C. Administrative Plan 8

D. Operational Plan 9

Part II: The Marketing Plan 10

A. Overview and Goals of the Marketing Strategy 10

B. Market Analysis 11

C. Marketing Strategy 12

D. Implementation of Marketing Strategy 12

Part III: Financial Documents 13

A. Summary of Financial Needs 13

B. Three-Year Income Projection 16

C. Pro Forma Cash Flow Statement (Budget) 17, 22

D. Profit & Loss Statement (Income Statement) 17, 23

E. Balance Sheet 17, 24

F. Projected Balance Sheet 17, 24

G. Break-even Analysis 17

H. Financial Statement Analysis 17

I. Business Financial History 17

Part IV: Innovative Elements and Expected Business Outcomes 18

A. Next Steps to Put Project in to Action 18

B. Pro Forma for Hiring a Nurse Coordinator 19

1 | P a g e   

Project Summary:

Iowa General Hospital and Medical Center recently opened an Ambulatory Surgery Center (last

year). This is a freestanding surgery center that does outpatient surgery for a variety of surgical

specialties. It also houses a retail pharmacy and a clinic with 10 exam rooms for the physicians to

use. Staff were hired at inception and to date no one else has been hired. It is becoming apparent

that the Physicians and Advanced Practice Providers that practice here need a Nurse Coordinator

that can help to facilitate some of the surgeries and be the point of contact for these patients. This

proposal will give an overview of ways to hire an employee into a healthcare organization that is

diligent about meeting their bottom line and explain the challenges and opportunities for a

hospital owned ASC.

A Nurse Coordinator is a registered nurse, that among many other things, takes triage phone calls

and determines if a patient needs to be seen in clinic or has more serious complications and needs

to come in to the hospital. This nurse would help facilitate any paperwork the patient has that

needs completed (disability, workers comp, etc.) and be the point of contact for outside facilities

looking for medical records, questions, getting orders signed, etc. The nurse will also coordinate

with schedulers who schedule the surgeries for the different specialties and be the main point of

contact for the patient’s clinical questions. Until now, the physicians and APP’s have been doing

this and it has been going well, the patients love speaking with their providers directly. This is not

a sustainable model though as the practice is growing.

This plan outlines the proposal for hiring a Nurse Coordinator in an ambulatory clinical setting.

The nurse will not generate any excess revenue and the clinic has been told by hospital leadership

they cannot hire this position unless they can prove ways the clinic will generate more revenue or

cut expenses to pay for the salary. It will be the Administrator and the Nurse Manager’s

responsibility to make sure that this plan is carried out and that this salary is covered 100% by

either cutting costs or increasing revenues.

Executive Summary:

In healthcare today, making difficult decisions while standing by them, and working smarter with

less resources are key to successful practices. Thinking differently in order to hire a position is

something that Administrators are being asked to do every day. The days of hiring employees on

a whim and replacing positions, just because they are vacant are becoming much less common.

Keeping tighter controls on budget targets and rewarding successes are very important to growing

2 | P a g e   

a prosperous business, even in healthcare. Holding management accountable for decisions can

begin to eliminate waste and strengthen the organization.

Iowa General Hospital and Medical Center is an established and profitable academic medical

center in an affluent suburb of Des Moines, IA. A decision was made by the hospital’s CEO and

COO to open a freestanding Ambulatory Surgery Center (IGMC Surgery Center) to

accommodate all outpatient surgeries. The facility is located minutes from the Interstate in the

middle of the state. The vision behind this was that it would create a better experience for patients

and it would free up operating rooms being used for outpatient surgery in the main hospital for

more inpatient surgeries. The intention was to create a seamless experience for the surgical

patient to have a pre-operative consultation, surgery, post-op care, pharmacy and follow up visits

all in the same location. It is unique from other surgery centers because it is directly affiliated

with a major hospital in an academic medical center, staffed by board certified physicians, APP’s

and houses a pharmacy in a wing of the building that is leased from the hospital. The facility also

boasts a retail store for purchasing scar creams, binders, and other surgical supplies as well as a

coffee shop with snacks, boutique items and gifts for friends and family to peruse while waiting

for their loved ones to come out of surgery. There is an opportunity to grow and define this retail

business as well by expanding into online sales and investing in more inventory. Neither the

hospital nor the surgery center website feature anything about the products sold here. There is no

capability or platform for retail sales online. The possibility of adding on to the facility to

accommodate a Medical Spa has been discussed as well. This is a growing facility and patient

satisfaction has been very high.

Currently, the Surgery Center is owned by the hospital and the cost is leased back to the facility

as an expense. The equipment is also depreciated over a 15 year period. Any new capital

purchases must be approved through the hospital and added to the depreciation schedule. The

pharmacy that shares the building pays the hospital a lease fee and that is calculated into this

payment that is charged back to the surgery center and greatly offsets the cost.

The Mission of the IGMC Surgery Center is to provide outstanding medical care through a

partnership between the hospital and the patient. By having a location separate from the hospital,

it allows the patient distinguished one on one service and an environment where they are part of

the process. By being affiliated with the hospital, it gives the patient peace of mind knowing their

physician is working for one of the top hospitals in the nation. The patient is involved in their

care plan from the very first consultation. They are given a tour of where their surgery is

performed, meet the staff and are able to talk to the physician, APP and office staff to let them

3 | P a g e   

know of any special accommodations they may have, get their questions answered and truly

become an integral part of the process.

IGMC Surgery Center is led by the Department of Surgery administrator, the physicians and an

onsite nurse manager (who also doubles as a preop/pacu nurse). The administrator works closely

with the physicians and hospital CEO and COO in the strategic planning and goals of the facility.

The input and decisions of the faculty are also vital in this staffing model. Decisions made by

these leaders are vetted through other hospital leaders as well, who then give their input.

Marketing, Surgical Services and collaborating physicians are among those consulted in some of

the decisions. Monthly collaborations between the administrator, key physicians and the nurse

manager include going through income statements, making recommendations for improvements

and capital requests, implementing new policy changes, staffing changes if any, and anything else

that comes up throughout the month that the other parties need to be made aware of. This has

proved to be a very successful management model for this facility.

As stated before, this facility is unlike others in the region. Not only is it a freestanding facility

backed by an outstanding hospital and staffed by board certified physicians, it also has a

pharmacy and a retail store. There are two other hospitals in the area, both of a well-known name

and reputation. They both offer outpatient surgery, but not in a freestanding facility, the

outpatient surgeries at the competing hospitals are done in their operating rooms scheduled

amongst the inpatient surgeries. Currently, Iowa General is only in competition with one other

hospital in the area. They have about the same number of physicians and like services. The

competitor hospital is busy clinically, but it is not an academic medical center, so this sets Iowa

apart. The competing hospital, Mercy Hospital, is also in Des Moines. Iowa General has several

competitive advantages; they are the leader in pediatric care for the region, they recently built a

state of the art transplant facility and their marketing and brand have been recognized as the

destination for patients in many specialties for decades. This among being the leading academic

medical center in Iowa, sets it apart.

The financial projections for the new IGMC Surgery Center have been on a steady upward trend

since their inception and are forecast to continue. Currently, 70% of their business is from self-

pay, non-insurance cases. (See Figure 1.1 below)

4 | P a g e   

Figure 1.1

Part I: The Organizational Plan

Summary Description of the Business:

The Mission of the IGMC Surgery Center is to provide outstanding medical care through a

partnership between the hospital and the patient. To provide compassionate care and state of the

art surgical expertise in a one of a kind facility.

At IGMC, by having a location separate from the hospital, it allows the patient focused one on

one service in an environment where they are part of the process. By being affiliated with the

hospital, it gives the patient peace of mind knowing their physician is working for one of the top

hospitals in the nation. The patient is asked to be involved in their care from the very beginning.

Every patient is treated like a VIP, as they could be going anywhere for care, but are choosing

this facility. Every question and suggestion are heard and facilitated accordingly.

The business model is a bit unique to other Ambulatory Surgery Centers, due to the retail and

pharmacy components. As mentioned previously, the facility is owned and operated by the

Hospital. The faculty and staff in the IGMC, are employees of the hospital. The staff costs are

allocated back to the IGMC as a line item on the income statement, but faculty costs are not.

There is a monthly allocation for the building and depreciation amount for the capital also

allocated back to the surgery center. The facility is one of the many locations and buildings that

the hospital owns and operates. All of the physician’s professional fees for both clinic (hospital

5 | P a g e   

based clinic) and surgery center (ambulatory surgery center) are attributed to the combined

revenue. The facility fees collected for surgeries and clinic visits go back to the hospital. The

operating expenses are made up of overhead, building lease, capital depreciation, supplies and

staff costs. There are no physician salaries attributed as expense to this facility. The physician

salaries are kept separate and paid from a separate pool of money funded by the University and

the Hospital. This money comes from facility fees and some other surgical professional fees,

mainly from the cases performed within the hospital. There are also teaching stipends from the

University to help cover some of their salary for the teaching they do. The income statement

consists of gross revenues, net patient revenue and expense. This facility is fortunate to have a

model unlike others where money comes in from a pharmacy lease and the retail store to add to

the gross operating revenues.

The analysis below outlines the (SWOT) strengths, weaknesses, opportunities and threats to the

organization/surgery center when hiring a new employee, such as a nurse. That may sound like

something trivial, but if each and every position is not analyzed and a financial plan in place, the

organization would be more likely to fail. Financial stewardship is important to the leadership,

physicians, etc. All key stakeholders have a vested interest in making sure the financial stability

of the organization is maintained. That is why it is very important to analyze each and every

position like the nurse below. (See Figure 1.2 below)

Strengths: Figure 1.2

‐ Increase patient education

‐ Improve Physician/APP workflows and efficiencies; More clinic visits and additional

case volume while not increasing the number of Providers

‐ Will allow APP to function at top of license

‐ RN has more time to focus one on one with patient

Weaknesses:

‐ Will one nurse be enough?

‐ Financially driven position, regardless of need

Opportunities:

‐ Improve communication between patients and providers

‐ Increase patient satisfaction scores which can lead to increased revenue from insurance

providers with quality metrics that are being implemented

6 | P a g e   

‐ Improve wait times for patient call backs

‐ Increase in visits by freeing up time from providers

Threats:

‐ Finding the right fit for the position who can elevate the current standards

‐ Stress – a big job for one RN

Most of the strategies for the surgical center come from the hospital. In the short term, Iowa

General is working towards quality and safety metrics, some of which are mandated by CMS. It

has a very top down, corporate like feel. The revenues generated in excess of budgets and what is

needed to sustain the business at the surgery center are absorbed into the hospital bottom line and

go to help offset other areas in the hospital that cannot pay for themselves. Physicians and APP’s

are eligible for performance incentives if targets are exceeded. A more long term strategy is to

incorporate a model that allows for portions of the excess revenue to stay within those areas to

help grow specific programs, but in the short term, the hospital has control of these funds. This is

one of the reasons that there has been a freeze on hiring any new positions in the organization that

do not generate revenue. If a position is proposed, there needs to be a solid plan put forward

which details the reasoning for the position and how the area will work to offset these additional

costs. In many cases, this has proved to be detrimental to the departments, the physicians and the

patients ultimately pay the price when staffing is compromised. The administrator works closely

with hospital leadership in a strategic partnership to advocate when a position is needed.

Sometimes, it can be difficult to understand the difference between how the hospital organization

is run vs. being in a private ASC setting. It is not an “eat what you kill” model, it is a business. In

the end, the final decision rests with the CEO, COO, CMO and Board members to decide if they

will allow a hire to be put through to the HR department. There is a process all positions go

through:

1. Written justification requires approval signatures from leadership in that area (In the case of

this proposal, the nursing position will be signed off by the administrator and the physician

director of the IGMC surgery center).

2. The position is taken before the leadership team at the hospital for consideration. They are

looking for diligence from the justification that it addresses how the position will be funded. They

look to see if there were thoughtful and creative ways of covering the duties in other ways, rather

than having to expend extra funds.

7 | P a g e   

3. The hospital key stakeholders will determine whether or not the area requesting is financially

stable and can support an added position, if they were to approve it, so that there is no extra

burden on the health system.

Products and Services:

Listed below are some of the added products and/or services a nurse coordinator would bring to

the surgery center:

‐ Planning and organizing daily clinical operations of the clinic to maximize efficiency

from all providers

‐ Increase clinic visit numbers by adding a nurse template for add-on patients as needed

‐ Increase APP visits by minimizing paperwork and phone call demands, allowing for

more independent clinic visits from those providers

‐ Collaborate with ambulatory leaders and administrator to coordinate services to meet

patient care needs

‐ Make recommendations for improved standards to improve quality and cost-effectiveness

of patient care

‐ Work with hospital staff to negotiate contracts for certain products or services as needed

‐ Help write and facilitate specific policies and procedures for the IGMC surgery center

‐ Precept other clinical support personnel (MA’s, etc.)

‐ Added presence in the clinic for help doing pre-operative assessments, medication

administration, monitoring, documentation and post-operative patient care and education

‐ Participate in hospital nursing councils and/or other relevant committees and special

projects

‐ Be a leader and trainer for upgrades, etc. on the EMR (electronic medical record) system

‐ Enter orders to help offset some of the manual work of the physicians and APP’s

‐ Upsell the products in the retail store to patients that could benefit from them (creams,

surgical garments, etc.)

In regards to marketing and selling some of the products that are carried within the practice, the

nurse can be instrumental in recommending and helping patients understand the need for things

such as binders after surgery, scar creams, etc. The nurse also provides valuable patient education

to the patients before surgery. Not having a nurse has been challenging when the patients have

questions. A lot of the questions that are asked are due to a misunderstanding from the initial

visit. The providers do a great job currently, but things get missed and it will be very beneficial to

8 | P a g e   

have that one point of contact for the patient. The nurse can participate on important nursing

councils that relay important hospital changes and policies to the providers. Plans will be to have

the patients contact the nurse as first point of triage and a nurse template will be set up to see

walk in patients that have questions or need simple things like suture removal, before and after

photos taken, etc. The nurse will be an integral part of the success of the surgery center. Likely,

there will need to be an additional nurse hired once this position is integrated into the practice and

the benefits are realized.

Administrative Plan:

Organizational Chart of the IGMC Surgery Center:

Most of the decisions that affect hospital or clinical operations are made at a hospital level and

rolled out within the specific areas. For instance, if a change needs to be made to the EMR or

other IT systems, the hospital rolls that out system wide. IT, HR, Accounts Payable, Revenue

Cycle are all centralized processes handled by the system. When a specific area needs staffing

there is a process that they must follow (as detailed earlier). After a position is approved, it is

posted externally and applicants from diverse backgrounds are encouraged to apply. One

Chief Operating 

Officer 

Hospital Board Members 

Chief Medical 

Officer 

Physicians 

Chief Executive Officer 

Administrator 

Nurse Manager 

IGMC staff (MA’s, 

receptionists, nurse 

coordinator) 

APP’s 

9 | P a g e   

downfall to having a centralized HR in a big organization can be the time it takes to get through

the process of approval, posting, interviewing, hiring and finally training. In a more private

setting this can traditionally be done faster without all the layers. The administrator and nurse

manager will work closely through the approval and hiring process to push things a long and

make sure it gets done as quickly as possible when there is a time sensitive position. In this case,

the nurse is a position the physicians have asked be hired as soon as possible.

Operational Plan:

Since the IGMC surgery center opened, the incoming phone calls have come in to a main phone

number, staffed by medical receptionists. If the call was of a nature that the receptionist could not

handle (medical question, etc.) it was given to either the physician or the APP. Sometimes the

medical assistants help as well. The call volume has significantly increased in the past year and

the need for medical help in triaging the phone calls is apparent. This is one of the main reasons

(among others) for the urgency in hiring this position.

The physicians have requested that the nurse is hired in the next few months. A timeline of how

the hiring process usually works at IGMC is below (See Figure 1.3). The timing usually depends

on how busy the Board is and when they meet to approve positions. It also depends on the

accuracy and inclusiveness of the proposal. They will be looking for demonstrated ways the

position will generate revenue or cost savings in order to pay for the position. This could go back

and forth several times before the meeting. The average time it takes to hire someone is about 50

days in to the organization at this time. According to an article in time.com

(http://time.com/money/4053899/how-long-it-takes-to-get-hired/) it takes an average of 65 days

in healthcare to get hired. One of the downsides to how long it takes to hire in a bigger

organization can be the fact that some people aren’t willing to wait that long. On the flipside, if an

RN is willing to wait for a position at a bigger organization, there can be better benefits than there

would be in a smaller, private run organization. Traditionally, larger employers pay more of the

healthcare costs for employees than smaller organizations do. The health systems that are all

competing for the same talent all have the same challenges in hiring, so there is not a lot that can

be done from that perspective; job seekers just need to be aware and bring their patience.

The time it takes to hire a position is something that HR and the leadership have to help the

physicians understand and manage their expectation. It can be hard to explain the bureaucracy of

the organizational timelines but it is important to support both sides. Figure 1.3 below shows an

approximate timeline for hiring a new position.

10 | P a g e   

Week 1 Week 2-3 Week 2-3 Week 4-6 Week 6+ (1-5 days) (5-20 days) (5-20 days) (30-50 days) (Average days to hire: 50)

Figure 1.3

Part II: The Marketing Plan

Overview:

Marketing for the nurse coordinator is not something that the manager or administrator

necessarily worry about too much. Nursing positions are one of the most highly desired jobs in

the market. Marketing for any position at IGMC or anywhere in the hospital are done through the

company website and through an account with Careerlink. The branding is already recognized

and since the hospital is one of the larger and major healthcare organizations in town, there is not

a lot of extra marketing that needs to go into hiring for this specific nurse position. Word of

mouth is very important when hiring for a position at the surgery center, according to the

physicians. They want highly skilled nurses and usually people apply because they have heard of

the reputation of either of one of the physicians or the organization as a whole.

In recent months, the hospital HR department in collaboration with hiring managers have been

holding public open houses for prospective employees to attend to hear more about open

positions, meet with hiring managers and learn more about the benefits the hospital has to offer.

They have also been doing monthly features in the local newspaper and online (social media) that

highlight one or two open positions. Social media in particular has been a very popular avenue for

attracting employees. It takes no time at all to watch a clip of the organization and to learn a little

about the position without having to leave the comfort of their own home. These are also low cost

for the organization to put together and reach a lot of potential candidates.

The competition in the market is apparent, but IGMC has a low first year turnover rate of 8% and

a 5 year turnover rate of 5%. The benefit package is outstanding for the area and for a large

employer. HR offers many incentives to nurses such as shift differential (where applicable),

hiring bonuses and referral bonuses. They also offer tuition reimbursement or repayment upon

qualification.

Initial Request  

to hire/Proposal 

Position  

Approved 

Position  

Posted Interviews 

and Hiring Orientation‐ 

Probation period 

11 | P a g e   

These things coupled with their overall reputation, make Iowa General and IGMC in particular, a

very marketable place to work.

Market Analysis:

A market analysis shows that the average salary for a Surgery RN in Des Moines is about

$54,726 per year – updated in 2018. This is 17% below the national average according to

glassdoor.com. An RN Case Manager, which has similarities to this position, makes a bit more.

The Case Manager salary is $63,571 per year according to the same site. This is only 5% below

the national average.

(https://www.glassdoor.com/Salaries/des-moines-rn-surgery-center-coordinator-salary-

SRCH_IL.0,10_IM235_KO11,21_KE22,40.htm)

(https://www.glassdoor.com/Salaries/des-moines-rn-case-manager-salary-

SRCH_IL.0,10_IM235_KO11,26.htm)

Marketing for these positions as mentioned before would be out on the web, mainly. Most people

looking for healthcare jobs know about the IGMC jobs website and will also search on

Careerlink. A market analysis is done yearly by the HR department and uses resources internally

and externally, such as glassdoor.com to compare salaries in the market for all positions in the

organization.

According to a national nursing workforce study by The National Council of State Boards and

The National Forum of State Nursing Workforce Centers, the average age of a nurse is

decreasing. It was 48.8 years old in 2015, down from 50 years old in 2013. IGMC does not

discriminate based on demographic information and has found that a diverse group of employees

working at the surgery center has served them well with the many populations of people they

serve. The survey also points out that millennials are the largest generation ever and if they enter

the nursing workforce at the rate current nurses are, this will likely solve a nursing shortage

related to retiring nurses. They are also the most educated generation, which will play a role in

where they practice and how the care is provided (telehealth, etc.).

(https://www.ncsbn.org/2015ExecutiveSummary.pdf)

12 | P a g e   

Marketing Strategy:

A nurse is needed by the surgery center and HR is able to easily market and get qualified

candidates for this position. The strategy to realize the revenue to pay for the position is outlined

in this plan. Marketing should focus on ways to market the new availability that can be offered to

patients by freeing up some of the providers time. The strategy around marketing for this position

will be a fairly routine process. It is done the same way for all positions throughout the

organization. Word of mouth usually works great, along with social media which has definitely

gained more popularity among millennial job seekers of recent. Recently, HR has been reaching

out to some of the schools in town and talking to them about the opportunity for internships and

shadowing other nurses in the organization to get them interested in future opportunities upon

graduation. They are offering sign on bonuses for nurses and showcase the competitive benefits

package offered. This has been a successful tool for Iowa General in recruiting nurses.

Implementation of Marketing Strategy:

Figure 1.4 below is a representation of how long it takes to post the position to the various sites

and get the marketing rolled out to the surrounding markets.

Upon approval 1-21 days 5-14 days 5-21 days

Figure 1.4

Usually, it takes about two weeks to get an approved position posted on all the websites and on

social media. Generally, positions are left out on social media for about three weeks, but if filled

sooner are taken down. Depending on the schedules of the nursing schools in the area, this can

take several weeks. If school is not in session, this avenue would be an unsuccessful form of

marketing for that class of students.

Once the position has been approved, the managers/marketing team for the surgery center can

start the process around marketing the APP’s extra clinic visits and extended availability in

general. Extra clinic visits are most likely going to be for follow up visits for particular providers

Job approved and posted to 

IGMC website/Careerlink 

Facebook, etc.  

Mailers go out re: increased 

availability, provider awareness, 

IGMC brand and services offered 

Social media blasts, 

calls to local schools, 

word of mouth, etc.    

13 | P a g e   

and for visits like suture removals, wound checks, dressing changes and questions. Occasionally,

APP’s will see new patients as well, on the assumption that if the patient needs to see a physician,

they will be scheduled at a later time.

Marketing can help provide a mailer to the area around the surgery center talking about one or all

of the services that will be offering increased availability due to having an APP clinic. This could

be something like offering the most comprehensive surgical experience in the area, in terms of

same day availability and increased patient satisfaction by being able to offer the patients an even

more robust experience. An all in one stop for all your surgical needs – with no waiting. A

discussion with someone in marketing would be critical during this process. The best thing to do

would be to meet with all of the staff that will be handling the new clinic schedules and get their

feedback and bring to the marketing team for their expertise in communicating it out to the

public.

Marketing can also have a photo shoot done to allow the community to see the faces of the people

that will be taking care of them. Including APP’s and physicians together to show a

comprehensive and cohesive care team and talking about shorter waits and even the ability to

make appointments online if available. Marketing to the relevant demographics in the area is

never a bad thing and creating a more personal experience for the patients will lead to increased

patient satisfaction when they come in with a feeling of inclusion already.

Part III: Financial Documents

Summary of Financial Needs:

Financially speaking, the IGMC surgery center is a profitable business. Partnered with the

hospital, the professional fees generated by the physicians, facility fees for the center, revenues

from the pharmacy operations and the retail store sustain the profitability of the center. Expenses

are monitored closely by the administrator, physician leaders and clinic manager. Since the

surgery center is owned and operated by the hospital, they cannot run their business as a private

entity. If they could, this financial plan may not be necessary to hire a position. In this

organization, financing and support for operations are provided by the hospital to the surgery

center and resources are depreciated and paid back over time.

As mentioned, a financial plan is required to hire a new position and (see attached proforma) this

must also demonstrate clear cost saving measures or revenue generating practices that will be put

14 | P a g e   

into place. The financial plan to hire the nurse in this plan will be offset by the following: (One

or more of these things may be immediate – the others within the year)

1. Adding a clinic for the APP

This clinic could be used to see follow up patients for the physicians and quick visits that

can save the physicians time to be able to see revenue generating consults or free up time

to do more surgeries. On occasion, the APP will see new consults for the physician as

long as the patient understands they will be seeing an APP to triage their needs and if

needed, they will come back to see a physician at a later time. In some practices, when

wait times for physicians are long, offering the patient an appointment with an APP

within the week can be a patient satisfier.

If there is another APP that performs similar clinical duties, pulling a report of

their revenue generation and using them as a model can be a simple way to see

how this would be of benefit. (see attached pro-forma)

In the surgery center, the APP’s are seeing clinic patients already, so the revenue

for a similar provider can be pulled. On average, they collect at about a 15% rate

from insurance and self-pay. The APP used for this business plan for

comparative purposes, generated $640,000 in annual gross charges. This is a

combined revenue from surgical cases with the physicians and clinic encounters.

The net income for this provider was about $95,000 for the year. If the new nurse

will free up an APP to have one clinic per week, the estimated impact of that

would be $1,500-$2,000 per month (approximately $400 per clinic session) in

additional net revenue generated by clinic visits. It will also increase the charges

and visit volumes for the clinic, metrics tracked by the hospital.

The additional clinic will also allow the physician to be freed up to do two

revenue generating cases per week, and each case nets on average about $1,000.

That is about $90,000 in increased net profit. (using 45 weeks per year)

The added clinic for the APP is used to see patients independently and these

visits are billed out. If the APP is in clinic with the physician whose patients they

will be covering, it is beneficial to have the visits billed under that physician. On

average, the physician will collect 15% more than an APP would on a visit.

There is a split-shared visit where the APP can still receive the credit for the

work, but the physician can do the billing, as long as the physician sees the

patient briefly. If the APP adds the clinic and the physician is not around that

15 | P a g e   

day, the APP can bill independently. The APP has the extra time to do a new

clinic due to the new nurse position being available to cover phones, take care of

paperwork and follow up on patient needs. If the APP billed 10-15 visits in a

clinic this could add revenue and extra clinic visits to the facility. The current

wait times have been increasing to get follow up patients in to the clinic and it

has been a struggle when someone calls to be seen same day with a question or

due to a complication, etc. This will help to have a clinic either one full day per

week or two half day sessions per week.

2. Adding a template for nurse visits

A nurse template will be beneficial for the APP’s and physicians who are in clinic or

need time to either be in surgery, see more revenue generating patients or do in office

procedures. The nurse visits are not able to be billed for, but they facilitate efficiency for

providers and provide a very quick avenue for patients who need to get in quickly for

non-urgent things, like suture removal and skin checks for example.

3. Cutting out overtime from the MA staff who are working extra to cover some of the clinical

duties

On average the MA’s are all working a little overtime each month.

6 medical assistants work in the facility who each work about five hours of OT

per month.

A medical assistant makes $17.50/hour. OT is $26.25/hour. Yearly payout (salary

only) for the six staff would be about $9,450. This is low hanging fruit and could

probably be cut out without the nurse, but is easy money to capture when hiring

one.

4. Add an Open House to generate extra cash flow into the retail store.

Open houses are a profitable model that can be replicated from other facilities. Specials

could be run in conjunction with an event in the hospital, holiday, community event or

just because. Discounting something to bring people in has proven to be successful in the

past.

The retail store/coffee shop currently has a gross annual income of $650,000. The store is

staffed by volunteers. The coffee shop is a popular place in the city, it is one of the only

coffee shops serving fresh fruit smoothies and fun kid’s specialty coffees such as

16 | P a g e   

“Chocolate Pudding in a cup” and “The Melted Snowman”. It is located directly inside

the surgery center, off to the side by the waiting area and clinical entrances. Promotions

in the coffee shop can draw in a lot more business than a usual day would, for instance $1

days and other popular promos. On these days, they could advertise and sell other

specialty items. The amount of money made from certain events will vary greatly.

Eventually, the surgical center hopes to open a Medspa and offer services such as Botox,

injectables, laser hair removal and Coolsculpting, along with waxing and facials. This

could also feed patients into the surgical center. The incoming nurse can help plan for this

and learn how to do the injections under the supervision of the physicians. This is hard to

quantify in terms of extra dollars, but can be included as a potential growth area.

5. Re-negotiate the contract with the current supplier of surgical supplies.

The hospital has a general supply department that takes care of these contracts. The nurse

could work with this department to make sure they are getting the best pricing on all of

the contracts. Currently, no one from the surgery center has had time to take this as a

project to work on, but reps from various vendors have consistently talked to the

physicians about better pricing. This could have a significant impact if they can save

money with different vendors or change vendors depending on pricing.

Financial Documents from the IGMC Surgery Center

Summary Income Statement - Three-Year Income Projections: Figure 1.6

17 | P a g e   

Pro-forma Cash Flow Statement: See page 22

Profit & Loss Statement - Income Statement: See page 23

Balance Sheet for 2017 and Projected Balance Sheet for 2018: See page 24

Break-even and Financial Statement Analysis:

A financial analysis of the surgery center shows that it was a good investment for the hospital. It

is off to a solid start with revenues exceeding expectations and a net income that is positive. A

breakeven analysis on the surgery center would show that once the expenses are covered, there is

still profit. As shown in figure 1.7 the expenses are about $2.5 million. The revenues exceed that

making it a profitable business to date. In 2017, the financial performance shows a net income

from operations of $700,000. This has been increasing at a rapid rate since the center opened.

They have been fortunate to have a strong foundational support from the hospital and the

pharmacy that leases from them. In 2018 it is projected that their income will double and that is

due to adding three new advanced practice providers and opening up a third operating room that

is currently not being used as much. The third operating room will be used by ENT and facial

plastic surgeons and this will be a cash only – self pay operating room. This will allow for quick

turnaround as these are same day outpatient procedures such as ear tubes, scopes, rhinoplasties,

face lifts, blepharoplasties, etc. There is also a group of private physicians that would like to

partner with the surgery center in the next 2-3 years and they are a group of 5 surgeons. They will

also increase the revenue significantly when they join. The have a solid reputation and many

different ideas and plans to expand operations. Current fixed assets held by the surgery center

include product inventory, C-arm, and furniture. Liabilities include staff salaries and overhead

for the most part.

Business Financial History:

The hospital has seen many changes over the years. They are a nationally recognized hospital

with a reputation of being fiscally responsible. Processes and procedures for hiring were

developed to keep it that way. Each year the budget process takes several months to complete and

includes many people weighing in on the trends, vacancies, community, etc. The surgery center is

a small piece of the overall operations of the bigger hospital but a good example of how

something that is a revenue generator can be built to help support the income of a larger entity.

There is a possibility of modeling this and opening more surgery centers in the near future in

other surrounding cities to Des Moines.

18 | P a g e   

Part IV: Innovative Elements and Expected Business Outcomes

According to an article by BMC Health Services Research, nurses have a great impact on patient

care simply because of the amount of time they spend with the patients. Nurses give better care

when they are also happy in their work environment. Patients feel that knowledge, technical

abilities and good communication are the components that make a great nurse. Nurses feel that

having the support of managers, adequate staffing and having some control over the nursing

process are important for making them feel valued. (https://doi.org/10.1186/1472-6963-14-249)

At IGMC, those things are taken into consideration and nursing councils have been formed that

include nurses from all across the organization. When a nurse is hired there is a long precepting

process. A nurse will learn the systems, and then have another nurse who will come to the clinic

with them and train them. Setting nurses up for failure is not an option and with the market as

competitive as it is, it is crucial to keep nurses happy. Hiring help for this surgery center will

improve the health of the other providers as well, and lessen the chance for burnout and give

these providers a much needed work-life balance that has been missing recently.

It is challenging to have to justify hiring a position and taking it along through the process when

the specific area within the organization is fiscally sound. Sometimes having to wait means

possibly missing out on good talent. If someone is anxious to get started working, it can take

several weeks to get someone hired through this process. Once they are hired, then they have to

go through the orientation, training and learning processes. It is expected that the nurse will be

hired and that the increased revenue, clinic visits, etc. can be realized within the first year.

In the past, at Iowa General, if justification for a new position is succinct and fiscally responsible

then it is likely to get approved. Adding additional sessions into the clinics will lead to more

clinic visits, more surgeries and more revenue. It may seem like a slam dunk to the providers, but

the process that has to be gone through protects not only the hospital but also all of its employees

from failure. If it is a necessary position, then the hospital will recognize that and will be

supportive in most cases.

Next steps to put project in action:

The outcome needed from this plan would be to hire a nurse in the next few months. Once the

position is approved, the work can start around the hiring process. The managers at the surgery

center can start to work with the providers (APP’s and Physicians) on whose templates can be

adjusted when the new nurse is fully on-boarded. If any of these adjustments will lead to changes

19 | P a g e   

in budget projections, that needs to be taken into account as well. Depending on where the budget

process is at during the year, updates may or may not be able to be made.

The managers can also start to work with marketing to come up with ways to market the

increased availability of clinic visits and overall availability of the surgical providers and the

enhanced experience for the patients. The managers can also begin work around offering same

day visits for the patients via use of a patient portal or web app. This is not something they have

used in the past, but as the efficiency increases and the patient volume increases, this will be

important to be a competitive partner in the market.

The main thing to remember when deciding to hire a new position is to have patience and

remember that there are processes within big organizations that cannot be changed. By having a

well thought out plan and proforma, along with help from HR and Marketing, changes can be

very beneficial. In the future, being able to anticipate the need for new hires when there is a

process as involved as this is, is something that can be beneficial. A lot of the forms can be pre-

populated or could be saved and tweaked as needed when new position comes up, but the

infrastructure is already ready to go. Healthcare organizations are complex and nurses can be hard

to come by with the competition in the marketplace. Understanding and taking a collaborative

approach can be beneficial in achieving the intended results in the end when working within an

organization of this size.

Pro-forma for hiring Nurse Coordinator:

Summary:

Area requesting hire: IGMC Surgery Center Annual requested compensation: $60,000 Salary plus benefits: $75,000 Proposed start date: Monday, January 1, 2018

Job Justification/Duties:

The nurse coordinator will triage all clinical patient calls. They will help facilitate patient

paperwork (disability, workers comp, etc.) and be the point of contact for outside facilities

looking for medical records, questions, getting orders signed, etc. The nurse will also coordinate

with schedulers.

20 | P a g e   

Job duties consist of:

- Help plan and organize daily clinical operations in the clinic to maximize efficiency from all

providers

- Increase clinic visit numbers by adding a nurse template for add-on patients as needed

- Increase APP visits by minimizing paperwork and phone call demands, allowing for more

independent clinic visits from those providers/will be adding a clinic every week

- Collaborate with ambulatory leaders and administrator to coordinate services to meet patient

care needs

- Make recommendations for improved standards to improve quality and cost-effectiveness of

patient care

- Work with hospital staff to negotiate contracts for certain products or services as needed

- Help write and facilitate specific policies and procedures for the IGMC surgery center

- Precept other clinical support personnel (MA’s, etc.)

- Added presence in the clinic for help doing pre-operative assessments, medication

administration, monitoring, documentation and post-operative patient care and education

- Participate in hospital nursing councils and/or other relevant committees and special projects

- Be a leader and trainer for upgrades, etc. on the EMR (electronic medical record) system

- Enter orders to help offset some of the manual work of the physicians and APP’s

- Upsell the products in the retail store to patients that could benefit from them (creams, surgical

garments, etc.)

Current need for request:

Until now, the physicians and APP’s have been doing these tasks and while it has been going

well, this is not a sustainable model as the surgery center grows. The wait times have been

increasing for patients, both in the waiting room and time it takes to get an appointment. It has

been especially hard getting patient’s scheduled same day for complication questions, suture

removals, quick flow ups, etc. Looking to work the providers at the top of their scope of practice.

APP's should not be doing RN work, so an RN is needed to offset some of the work they are

21 | P a g e   

currently providing in order to allow the APP's to function more independently and to be more

efficient. There are currently no RN's in the surgery center.

Financial assessment for hiring a nurse coordinator (annually):

Expenses/Salary Cost

Nurse Coordinator salary: $60,000 Benefit costs: $15,000 Education/Licensure allowance: $1,500 TOTAL: $76,500 *Salary of the nurse to start 1/1/2018

Excess Revenue Opportunity

Adding APP Clinic $20,000 Adding 2 cases for physicians $90,000 Adding a nursing template $0 TOTAL: $110,000 *Potential revenue opportunities will be tracked. New APP clinic will start 1/1/2018.

Expense Reductions

Cutting overtime from Medical Assistants $7,875 TOTAL: $7,875 *Will not likely be able to cut overtime until nurse is trained. Used an annual amount of $9,450 – realizing 10 mos.

Questions addressed on Pro-forma:

1. Will position expenses be covered from excess revenue or cost savings? YES

2. Potential for excess revenue after position is paid for? (Annually) YES - $41,375/annually

3. Other comments? After one year, if plan is on track to exceed projections, would likely request an additional hire and will come back to the group with new pro-forma at that time.

22 | P a g e   

 

Pro-forma Cash Flow Statement: 

 

The above chart shows one year of cash flow into the organization. It is assumed that 2018 collections are identical to 2017 for purposes of this paper.

23 | P a g e   

Profit & Loss Statement - Income Statement:

24 | P a g e   

Balance Sheet for 2017 and Projected Balance Sheet for 2018: