Determining the probable operational feasibility of a hospice residence or facility prior to committing construction funds or a capital campaign has become absolutely critical as our country has slipped into increasingly uncertain financial times.
At one time, not all that many months ago, it may have been reasonable to assume that operational losses could be offset by other operational revenue or philanthropy.
While that may still be true, albeit quite likely to a lesser extent, thoroughly understanding the financial risks of such an endeavor prior to going forward is fundamental to exercising the fiduciary responsibilities of good management and informed governance.
Our goal with feasibility studies is to take some of the guess work out of the decision making.
While no feasibility study is able to tell the future Summit seeks to identify and to the best of our ability quantify the opportunities and risks that are inherent in these facilities.
Generally, a feasibility study conducted by Summit Business Group, LLC will include the following:
- Assistance in determining the feasibility of establishing a hospice facility, i.e. residential care, general inpatient care and respite care all in one facility or just residential care, or just general inpatient care.
Generally, our feasibility analyses review most models of providing facility based care e.g. building, leasing, retrofitting existing space, etc.
- We can assist in identifying a potential location for the facility if that has not been already completed.
Through interviews and discussions we may be able to assist in determining which location may be best in generating support from potential partners and the referring community as well as working best for potential patients/families.
- Assistance in identifying and negotiating potential collaborations that you may wish to consider.
- Assistance in determining the most appropriate size for the project.
Establishing bed size is not an exact science.
Patient data, probable case mix, location, fundraising, interest by the referring community and risk tolerance are all important variables that help to determine the feasibility of a unit and its size.
The demand for inpatient beds can be calculated more or less by formula from available data and modified by interview data.
However, because of the random nature of admissions it is also necessary to factor in a hospice’s tolerance for “wait lists.” That tolerance would translate into probability associated with having an available bed when required and thus occupancy and overall bed size of a unit.
For residential bed need and size we also have to determine the probability of expenses greater than revenue and the hospice’s tolerance for potentially subsidizing operations through charitable dollars or from other operations.
- Assistance in developing model budgets.
To accomplish the scope of work we will do an analysis of published data; conduct an on-site review and interviews with volunteers, management, staff, area physicians, nursing home administrators, hospital administrators, and others to determine the need and probable use of a hospice facility.
We will also review any pertinent financial and operational/program data.
A final report summarizing our findings and recommendations is usually presented in person.
