MRI Outpatient Transportation Business Plan

Roland E Gardner
Health Care Systems Management (LDR 609-OA)

Roland Gardner Business Plan Template 2 Radiology Outpatient Transportation Service Executive Summary Executive Summary a. Summarize the business plan and its conclusions b. What decision must be made about this service? When? By Whom? Proposal Service Definition a. Define and describe proposed service. What are the specific features of the service? b. What options are available in how we might offer this service? Which should we choose? Why? c. Where will the service be offered? d. What are to be the hours of operation? e. How will it differ from similar offerings so as to be attractive to the target market? Market Analysis 1. Customer Definition a. Who will use this service? b. Describe them demographically (e.g., age, sex, zip code, etc.). c. How will they find out about the service? How will patients be referred? d. How will they physically get to the service? 2. External Market Assessment a. What creates an opportunity to offer this service? b. Does the service support specific health needs of the community? c. What external factors pose a threat to the service?

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d. What regulatory issues will be faced by an organization implementing a service such as this? Is a CON required? 3. Competitors a. Who else is providing or might be developing this or a similar service? b. What special advantages or disadvantages might these competitors have? c. What risks does a new provider attempting to enter the market for this service face? 4. Promotion a. What marketing themes will attract the target market? b. What market communication strategies will be used? c. What incentives will we offer to encourage an initial trial, and how can we assure continued use? Internal Assessment 1. Strategic Fit a. How will the service relate to the organizations strategic plan? b. How will the service relate to the sponsoring departments planning efforts? c. How does this service fit into the system-wide strategy? d. Does this proposal duplicate services already offered in the region? Is there an opportunity to collaborate with other system entities? e. What are the anticipated consequences to the organization not offering this service? 2. Market Position a. In what ways are we well positioned to develop this service? b. What experience does the organization have in successfully offering similar services?

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c. What experience does the organization have in successfully attracting similar markets (customers)? d. In what ways are we poorly positioned to develop the service? What can be done to address those deficiencies? 3. Organization a. Who will be responsible for directing the new service? Why this is individual or department the most appropriate to sponsor this service? b. What other groups/individuals will participate in providing the service, and how will they relate to the director? c. What changes will have to occur elsewhere in the organization to accommodate the successful offering of this service? 4. Patient Service Cycle a. Trace the steps. b. Demonstrate the flow of the patient from registration to discharge. c. Include all contacts with employees and physicians, all departments impacted, and all other activities relevant to the patient experience. Financial Analysis 1. Demand Assumptions a. What is the available market for this service? b. Given our proposed distribution system, what market share do we expect from the relevant target market? How does this translate into volume? c. Is demand anticipated to increase or decrease in the target market? Why? d. How will changes in demand impact anticipated volume?

Roland Gardner Business Plan Template 2 2. Resource Assumptions a. What are the physical facility requirements? b. What are the personnel/human resource requirements? c. What are the information system requirements? d. What will be the impact on other resources within the organization? 3. Pricing Assumptions a. What pricing strategy will be pursued? Why? b. What will be the actual price structure? 4. Pro Forma Financial Statements

a. What are the projected revenue and expenses? What is the expected reimbursement? b. What are the start-up and ongoing financial requirements? c. What are the capital requirements of the program? d. What is the rate of return? Implementation Plan 1. Implementation Timetable a. What are the implementation steps? When will they occur? b. What are the critical path elements? c. Who is responsible for each stage of implementation? 2. Evaluation a. Define the objectives for the new service. b. How will you monitor progress towards implementation? c. How will you monitor progress towards the objectives? d. If objectives are not met, what will happen?

Roland Gardner Business Plan Template 2 Executive Summary a. My business plan is to implement a new outpatient transportation service line that accommodates outpatients in need of MRI services at the organizations three largest facilities. The plan is to start an auto shuttle service to deliver patients to the various

DMC MRI locations, and return them home after their procedures. This undertaking is in response to our declining revenues as a result of rising no-show rates within our institution. It is expected that this new transportation service will decrease the no-show rates and increase revenues. b. The decision that must be determined about this service is whether the up front cost of initiating and maintaining the service is justified in light of the scarce funds that are available for capital upgrades and expenditures. This proposal is recommended for consideration in the next capital budget meetings before finalization of the annual budget. The executives included in the approval process include the COO, CFO, CNO, and the respective radiology directors of the affected facilities. Proposal a. The proposed transportation service will be designed to pick up and transport home customers who are in need of MRI services, and who have indicated at the time of their appointment scheduling that they either have no transportation, or that their transportation is unreliable. b. In addition to the transportation pick up service, other options include providing outpatients with cab vouchers to take them home after their exams have been completed, or offering gas cards as added incentives to show up for their appointments. The

Roland Gardner Business Plan Template 2 transportation service is the best option because it is a guarantee that the patient will show up for their scheduled MRI exam. The other options offer no such guarantee. c. The service will be offered at the three largest DMC facilities. They are Harper University Hospital, Sinai-Grace Hospital and Huron Valley-Sinai Hospital. d. The hours of operation will be between the hours 6 a.m. and 6 p.m. e. Customer service will be optimized and prioritized with this new service line. New and clean vehicles, prompt service, convenient hours of operation and uniquely trained drivers and staff all combine to make this service superior than others already on the market. Market Analysis a. Customers in need of MRI but have no viable or reliable means of transportation are all projected to take advantage of this service.

b. Demographically, the service will primarily target adults, male and female with limitation to zip codes in the Metropolitan Detroit area and Commerce Township. Wayne County Male 48.1% Female 51.9% (Wayne County QuickFacts). Oakland County Male 48.1% Female 51.4% (Oakland County, Michigan detailed profile). c. Our marketing department will be heavily involved in promoting this transportation service through T.V. and radio announcements, pamphlets, business cards, websites and brochures. The ever-popular social media are easily consumed by mobile devices. The social media will be ramped up to take advantage of this fact (The top 5 marketing ideas for small businesses). The media blitz will be similar to the DMC ads guaranteeing emergency room service within 29 minutes of their arrival. DMC outpatient scheduling

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departments, physician offices, and DMC physician group practices will be asked to post notifications and inform all of their patients of the availability of this convenient and timely service. d. Drivers and staff will be exhaustively trained to assist patient into and out of the service vehicles as needed in a courteous and professional manner. All drives will be subject to drug screening and background checks (Customer Service Training in Michigan). External Market Assessment a. The opportunity for offering this service is in response to rising no-show rates among MRI patients throughout the DMC. b. This service supports the DMC mission of delivering prompt and efficient service to patients within the community for the diagnosis and treatment of diseases. c. Decreased referrals, a larger transportation service, and authorization insurance delays all pose a threat to this service. d. There are no regulatory or CON issues faced by the organization in implementing this type of service. Competitors a. Other healthcare organizations or clinics may offer a similar service. b. Larger organizations might have the capital support option of purchasing more vehicles at discount rates, or have more funds allocated for staff and fuel needs. c. As a new provider entering the market, inexperience may yield results that are less than expected or anticipated. Promotion

Roland Gardner Business Plan Template 2 a. Utilize hospital based web sites and blogs to advertise the transportation service to outpatients that make their appointments online. Pamphlets, business cards and brochures will also be used to promote this service. b. Use social media such ass face-book and smart phone ads to reach the larger community. c. Advertise the transportation service in the ER, physician offices and clinics throughout the DMC using modern brochures, pamphlets and fliers email and word of mouth.

d. Use current mailing list compiled by central scheduling to communicate the new service to patients and perspective outpatients. e. A strong company web site, and aggressive television and radio ads will be used to help market this service. f. As an added incentive, we will offer breakfast, lunch or dinner vouchers to each patient that utilizes the outpatient transportation service. These vouchers can be redeemed at any eating establishment within the DMC during the initial 3-month trial period. The effectiveness of the incentive plan will be reviewed regularly to measure its effectiveness. Internal Assessment a. The transportation service is directly related to the DMC vision of providing quality, cost-effective care, providing accessible, responsive, and personalized service. Providing community service, stewardship, fiscal control, community responsibility and efficient service (DMC Mission, Vision & Values). b. With the certainty that all available outpatient scheduled slots are routinely filled, the radiology department can better plan budget and staff projections.

Roland Gardner Business Plan Template 2 c. The system wide strategy is in keeping with the DMC belief that the access to quality

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health care is the right of every human being. The mission statement proclaims that the DMC, along with local, state and federal government supports a unique Public Mission to the residents of the communities we serve to assure that this human right is preserved (DMC Mission, Vision &Values). d. There is no comparable dedicated MRI transportation service offered in the metropolitan Detroit area. This service could conceivably evolve to incorporate DMC clinics that are populated throughout the community. e. The consequences of not offering this service are the continued raise of DMC MRI no show rates. MRI is a revenue generator for the entire organization, and continued losses can negatively impact the long-term financial viability of the system. Market Position a. The DMC is well positioned to develop this service because of the anticipated organizational and marketing support, the community need, and the availability of capital funding through the recent acquisition by Tenet Health. b. The organization has successfully used targeted marketing campaigns to attract worldclass physicians for nephrology, cardiology and neurosurgery in recent years. c. There are general transportation services (Get Well, S & L transportation) that are available to take patients to their appointments. These are general transportation services and not specifically aimed at the MRI patient population. The DMC can offer a guarantee of fast, efficient service specifically tailored for MRI patients while offering incentives as discussed earlier. Here is a sample of the services offered in the Metropolitan Detroit Area.

Roland Gardner Business Plan Template 2 Organization a. The director of valet transportation will direct the new MRI transportation service. The V.P. of patient care services will provide oversight. This individual has some experience in managing individuals, organizational familiarity and public relations. Patient Care Car Service Michigan Transportation Services Assured Trans Safe Ride Transportation Transport Systems (Detroit Non emergency medical transportation) Corner Stone Medical Transportation LLC J&J Mobile Services LLC (Medical Transportation Detroit, MI.)

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b. Various DMC physician offices and clinics will be asked to assist in coordinating this service with the transportation-scheduling clerk. Both the selected drivers for this service, and the department secretary will record the daily schedule, any problems, concerns and suggestion on a progress log, and report to the director in each early morning huddle session. c. Outpatient scheduling service, and outpatient DMC physician offices and clinics will be notified that the transportation service is an available option for their convenience. The will be asked to aggressively communicate and advertise this service to all of their patients. Patient Service Cycle

Roland Gardner Business Plan Template 2 a. In the best-case scenario, this is a synopsis of how the system should work. The outpatient central scheduling clerk will ask the patients making outpatient MRI exams if they need transportation to and from the hospital for their exams. b. If the answer is yes, the clerk will then tentatively give the patient an appointment and transportation pick up time.

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c. The transportation need is communicated to the outpatient transportation via email, and confirmation is sent to outpatient scheduling. A verification of the appointment is phoned to the patient. d. The outpatient registration department responsible for registration of MRI exams now registers the patient, and confirms pick up to and from the selected facility is confirmed. The patient is contacted to confirm the transportation timetable. e. The patient is picked up one hour prior to their MRI exam. f. The patient arrives at the selected facility and directed to the MRI center. g. The patient will greet by the departmental receptionist, interviewed by the staff MRI nurse, scanned by a staff technologist and released by the department. h. Transportation will return 2 hours after the patients arrival to transport the patient home. i. Transportation will accommodate any patient request to take advantage of the meal voucher, and allow scheduling flexibility. Financial Analysis a. There is a sizable market for a transportation service of this type of service based on the uncertainty and unreliability of public transportation in combination with a

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segment of the population that does not have access to transportation for any number of reasons. b. We can expect a modest slice of the market share with this directed initiative. The average MRI cost about $2,000, so capturing even the projected 6 additional patients/week can translate into sizable annual revenue generation. c. It is anticipated that with the implementation of the Affordable Care Act, demand for MRI services, and hence, transportation services is anticipated to increase. d. These projected increases in demand are expected to positively impact and grow revenues substantially. Resource Assumptions a. The physical requirements for the service are the storing of the transportation vehicles, the maintenance of a transportation office and a standard hospital issued computer with Internet access. b. The vehicles can be safely stored in any number of organizational parking structures. Part of the existing valet office can be converted for use as the transportation main office complete with a computer for coordination this service. c. The human resource requirements for this new service entails hiring 3 drivers, 3 assistants, and one office secretary. d. Information system requirements include computer access for advertisement to the community via the organizations website. e. Capital budget approval for this service may mean that other positions or services may not be funded. Pricing Assumptions

Roland Gardner Business Plan Template 2 a. A pricing strategy that identifies the best leasing options will be pursued. This makes sound financial and organizational sense. b. 3 seven-seat passenger minivans (Toyota Venza) at a monthly lease price of $350/month will be acquired for this service (Suburban Toyota). Pro Forma Financial Statements a. It is projected that 6 additional MRI exams/week at $2,000/exam will yield

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projected revenue generations of $12,000/week, $48,000/month and $576,000/year. b. The start up cost is $350/month for 3 vehicles equals $12,600/year/vehicle. This translates to $37,800/year for leasing cost. The annual insurance cost for 3 vehicles are estimated at $300/month (3 vehicles) or $3,600/year. c. Staff salaries are projected for 3 drivers at $15/hour, 3 assistants at $12/hour, and 1 secretary at $15/hour. d. The 3 drivers and secretary at $15/hour will cost $115,200/year. The 3 assistants making $12,000/year will cost $66,000/year. Combined, the total salary cost for the year = $181,320/year. e. Fuel cost is projected at $1,200/month or $14,000/year f. The service office will be converted from existing supplies. g. Marketing of the service line will include T.V. and radio advertisement, business cards, stationary, brochures, promotional items and website activities. This will cost $500/quarter or $2,000/year. h. Total start up cost = $238,720 vs. $576,000 in projected revenues. This will result in a positive variance of $337,280.

Roland Gardner Business Plan Template 2 Implementation Plan a. The implementation step is to market the service, interview and hire the staff, and lease the service vehicles. b. The marketing campaign will commence by first broadcasting the start date of the transportation service.

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c. The staff will be finalized two weeks after the start of the marketing campaign, and the vehicles will be leased one week after the staff has been selected. d. The selected staff will undergo an intensive 1-week customer-training refresher course (Customer service Training in Michigan). e. I t is projected that implementation of the transportation service will take approximately 1 month. f. The critical path elements are in successfully advertising the service, identifying the most personable and capable staff, and selecting the appropriate vehicles for leasing. g. The various directors of the respective radiology departments, or designates, along with the director of valet parking will assume administrative responsibility for each stage of implementation. Evaluation a. The objectives of the new service are to generate revenue for the various organizations MRI departments, and to fully carry out the mission of the DMC in providing access to quality care for everyone. b. The no show rates at the different MRI facilities will be monitored on a monthly basis. c. Expected revenue projections will be compared to actual revenue generation.

Roland Gardner Business Plan Template 2 d. If our expected revenues are not realized, another internal and external SWOT analysis will be conducted. e. If our analysis shows slow growth patterns, or local threats, the service will be modified accordingly. f. It is not anticipated that this service will be discontinued in the foreseeable future. The establishment and implementation of the MRI transportation service is in keeping with the DMC vision which states that the Detroit Medical Center will be known for: Quality, cost-effective care Accessible, responsive, and personalized service Innovation and academic stature Mutually beneficial relationships with medical staff Management leadership and a positive work environment Community service and stewardship Fiscal control, responsibility and efficiency (DMC Mission, Vision & Values)

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Roland Gardner Business Plan Template 2 References

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Business Plan: Market Analysis Retrieved September 27, 2013 from http://www.wonderthinking.com/2011/01/business-plan-market-analysis/

Customer service Training in Michigan: Detroit Retrieved October 27, 2011 from http://www.customerservicetrainingcenter.com/customer_service_training_michigan_htm

DMC Mission, Vision & Values Detroit Medical Center Retrieved October 22, 2013 from http://www.dmc.org/detroit-medical-center-mission-vision-and-values.html

Medical Transportation Detroit, MI J & J Mobile Services LLC Retrieved October 28, 2013 from http://nonemergencymedicaltrans.com/

Detroit Non emergency medical transportation Retrieved October 28, 2013 from http://www.yellowpages.com/detroit-mi/non-emergency-medical-transportation

Suburban Toyota of Troy retrieved October 28, 2013 from http://suburbantoyotaoftroy.v2.uptracs.com/index.htm

Oakland County, Michigan detailed profile Retrieved October 28, 2011 from http://www.city-data.com/county/Oakland_County-MI.html

Roland Gardner Business Plan Template 2 The top 5 marketing ideas for small business, 2012 Retrieved October 22, 2013 from http://smepals.com/marketing-ideas/top-5-marketing-ideas-small-business-2012

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Wayne County QuickFacts from the US Census Bureau Retrieved October 28, 2013 from http://quickfacts.census.gov/qfd/states/26/26163.html