You and several of your colleagues business partners havedecided to establish an outpatient fertility clinic in your servicearea. All of you are very familiar with this patient populationbase, have completed an extensive market analysis that demonstrateda great need for the service, and are comfortable with setting up abusiness and the costs associated with this special group ofpatients. The outpatient fertility clinic will have a fixed cost of$9,788,000 start up costs, hiring of specialty physicians,anesthesiologists, advanced practice nurses and staff nurses,salaries, purchase of high technology fertility equipment, andother miscellaneous items. The fertility clinic will be open Mondaythrough Saturday; 312 days per year. The fertility outpatientclinic has variable costs of $500 per patient visit-fertilitymedical equipment, oxygen supplies, and other miscellaneous items.Each patient will be charged the following per visit based onpatient acuity categories: 1. Simple 15% = $2,000 2. Moderate 60% =$6,500 3. Complex 25% = $10,000 The projected patient visites peryear are anticipated to be 7,488 visites. Hoe many patients wouldthe clinic have to provide ser services for to break even, and atwhat point would this occur? What is your interpretation of thebreak even analysis? Is this project a variable and profitableservice? Does the break even analysis support moving forward withthis business? Why, or why not?
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