I need help with this case study. Please see exhibit 6.1 and 6.2 in attachments The excel spreadsheet is also attached Questions: Answer the following questions related to this case. Use the Excel spreadsheet as needed. Show computations, as necessary, to support your answers. Using the historical data as a guide (Exhibit 6.1), construct a pro forma (forecasted) profit and loss statement for the clinic’s average month for all of 2010 assuming the status quo. With no change in (volume) utilization , what profit (loss) is the clinic projected to make? Consider the clinic’s situation without the new marketing program. How many additional daily visits must be generated to break even? Consider the clinic’s situation with the new marketing program. How many additional daily visits must be generated to break even? Focus solely on the expected profitability of the proposed marketing program. How many incremental daily visits must the program generate to make it worthwhile? (In other words, how many incremental visits would it take to pay for the marketing program, irrespective of overall clinic profitability?) Construct a graph showing the expected profitablilty of the proposed program versus incremental daily visits. Thus far, the analysis has considered the clinic’s near-term profitability, that is, an average month in 2010. Recast the pro forma (forecasted) profit and loss statement developed in Question 1 for an average month in 2015, five years hence, assuming that volume is constant over time. (Hint: You must consider likely changes in revenues and costs due to inflation and other factors. The idea here is to see if the clinic can “inflate” its way to profitablity even if volume remains flat.) Although you are basically satisfied with the analysis thus far, you are concerned about the uncertainties inherent in the revenue and expense data supplied by the clinics director. Assess each element in your Question 1 pro forma profit and loss statement. Are any items more uncertain than the others? How could uncertainty be worked into the analysis? What additional information, if any, might you want to obtain from the clinics director? Suppose you just found out that the $3,215 monthly malpractice insurance charge is based on an accounting allocation scheme that divides the hospitals total annual malpractice insurance costs by the total annual number of inpatient days and outpatient visits to obtain a per episode charge. Then, the per episode value is multiplied by each departments projected number of patient days or outpatient visits to obtain each departments malpractice cost allocation. Does this allocation scheme bias your break-even analysis? Explain. (No calculations are necessary.) After all the work performed thus far in the analysis, you suddenly realize that the hospital, as a for-profit corporation, must pay taxes. What impact does tax status have on your break-even analysis? Does the clinic have any value to the hospital beyond that considered by the numerical analysis just conducted? Do the actions by Baptist Hospital have any bearing on the final decision regarding the clinic? What is your final recommendation concerning the future of the walk-in clinic? Background of case: Columbia Memorial hospital an acute care hospital with 300 beds and 160 staff drs is one of 75 hospitals owned and operated by health Services of America, a for-profit, publicly owned company. Although two other acute care hospitals serve the same population, Columbia historically has been highly profitable because of its well-appointed facilities, fine medical staff, and reputation for quality care and the amount of individual attention it gives to patients. In addition to the standard range of inpatient and outpatient services, Columbia operate an emergency department within the hospital complex and a stand-alone walk in clinic located across the street from the areas major shopping mall, about two miles from the hospital. Patien…
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