Online medical consulting is a popular service used by millions of US residents. The service delivery options differ and include consulting provided by independent companies and online counseling at clinics and hospitals. For example, in Miami, Florida, Nicklaus Children Hospital has long been providing a virtual consulting service (Nicklaus children’s pediatric virtual care, 2020). The benefit of this innovation for patients can hardly be overestimated since the service frees vulnerable groups of the population from the danger of contracting the COVID-19 virus (Zhou et al., 2020). This paper aims to present a business plan for introducing a medical online consulting service in Holtz Children’s Hospital in Miami, Florida, to ensure that hospital patients receive quality and comfortable care.
Need for Service
With the onset of the coronavirus pandemic, healthcare faced new challenges, especially for people at risk. The elderly, pregnant women, young children, and people with health complications are especially vulnerable to the virus. Many of them have to put themselves at unnecessary risks by visiting hospitals. Besides, face-to-face meetings with healthcare workers can be associated with increased waiting time due to the high workload. As a result, patient satisfaction and the quality of the services provided are reduced. Some hospitals managed to introduce an online consulting service by 2019. This service is a remote consulting of patients by a doctor or nurse using technology.
Online consulting sometimes involves the patient’s independent use of their EHRS account. Patients are usually provided with access to their health data and records and can enter specific information themselves. Online help will meet high demand among people at risk, as it is a contactless service. Another factor is the reduced number of hours that providers can devote to one patient. The introduction of online consulting will help solve this problem if the patient takes some action. For example, patients can enter data into their EHRS accounts, including the symptoms and health data.
The financial planning associated with introducing the service in the hospital should consider additional payment for health workers. Although staff will provide the service during office hours, the workload will increase significantly if the provider has to serve an increased number of patients online, spending less time with each patient than in person. Therefore, health workers’ additional efforts will have to be paid according to the number of patients receiving the service. Financial planning will also include the cost of equipment for conducting online consultations with patients. Besides, the hospital will have to spend money to buy or develop an application to optimize the online consulting process.
The online consulting service involves remote consultation of patients using technology. It is proposed to introduce an online consulting service for pregnant women and mothers with newborns at Holtz Children’s Hospital due to the potentially high demand level. Online consulting is carried out in the process of providing video consultations in real-time. Health workers and patients can use PCs, laptops, tablets, or smartphones to make calls. Besides, when receiving online consulting services, the patients gain access to their data in the EHRS and create an account in the system, where they enter health information.
It is most convenient to receive and provide a service through an application installed on any suitable device by the patient and the health worker. The service is incredibly convenient for pregnant women and mothers with newborns since, in most cases, patients prefer a health worker to keep a detailed record of mother and child’s health. Health data include information about vaccinations, body temperature, symptoms associated with pregnancy, blood test results, and other data. Besides, after a baby’s birth, there is a need to record even more data.
Market Overview and Service Cost
There are about 240 healthcare facilities in Miami, Florida, specializing in various fields, including childcare facilities like Nicklaus Children Hospital, Holtz Children Hospital at UM-Jackson Memorial Medical Center, and University of Miami Pediatric Mobile Clinic. Due to the pandemic and the shortage of health workers, online counseling services have received significant demand in the US. Many online platforms allow patients to subscribe to a service or get immediate online medical advice from a certified doctor for a flat fee. The service usually means that after the consultation, the doctor writes out a prescription for the necessary medications and sends it to the pharmacy closest to the patient.
Consultations provide advice on managing common conditions such as allergies, ear infection, oral herpes, UTI, URI-respiratory infection, nausea, acute bronchitis, pediatric consultations, and cost from $ 39 to $ 49. Some service providers cover the full range of services that are usually offered by health clinics. For example, the CallOnDoc website covers Urgent Care, Sexually Transmitted Diseases, Women’s Health, Men’s Health, Psychiatry, General Medical Conditions, Dermatology, and miscellaneous health services like COVID-19 resources and work clearance (CallOnDoc, 2020).
The VSee website lists the most popular resources: MDLIVE, Teladoc, American Well, DOCTOR on Demand, This American DOC, HealthTap, LiveHealth ONLINE, SPECIALISTS ON CALL, and Consult A Doctor (Online doctor consultation services, 2020). Other popular platforms are AmeriDoc, virtuwell, Ringadoc, 2nd.MD, STAT DOCTORS, MeMD, interactiveMD, RapidRemedy, USARAD, and SECOND OPINIONS. Therefore, a large network of US organizations provides online medical consulting services at an affordable cost.
However, hospital-based service delivery may have strong patient demand. People who use the hospital’s services are likely to have a higher level of trust in its specialists. Moreover, the provision of online consultations by a medical institution, rather than by individual certified doctors, will allow the patient to be connected to the EHRS system and enter relevant health data into it. Therefore, hospital-based online medical consulting has a significant competitive advantage over independent companies. One consultation’s cost can be calculated following the average market value – from $ 39 to $ 49.
There is also the option of offering patients monthly or annual plans for $ 99 and $ 799, respectively. In addition to direct counseling, physicians will add records to the EHRS, and patients will enter their daily health data and symptoms.
The operating budget variables should be defined and calculated to launch the service successfully. Typically, the operating budget consists of all revenues and costs over a period of time, such as a quarter or a year (Operating budget, 2020). The operational budget is prepared as a projected goal or a plan for the chosen period. The main components of the operating budget commonly used by most businesses include income, variable costs, fixed costs, non-cash expenses, and non-operating expenses.
Revenue in the operating budget depends on revenue drivers, including volume, the projected number of units of the service sold, and the unit price. In the presented case, there will be three types of services – Online consulting for expecting mothers (Service 1), Online consulting for newborns (Service 2), and Pediatric online consulting (Service 3). The price for Services1, 2, and 3 will be 39 $ for a 15-minutes online session. The projected volume will depend on demand and is estimated as 300 services per month for each service.
Further, variable costs will include the cost of services sold, direct selling costs, marketing costs, payment processing fees, and direct labor costs. The cost of services sold will be quite high in the first year but will decrease further. The calculation of the cost of services sold will be the sum of the cost of producing the service, including the cost of purchasing equipment for making video calls and the cost of purchasing an application for online consulting. Thirty laptops for the medical staff will be purchased at the cost of $ 500 per unit. A licensed version of the application will then be purchased, which will be compatible with the existing EHRS at $ 100 per unit for each laptop. Therefore, the cost of services sold will be 30 laptops * $ 500 + 30 licenses * $ 100 = $ 15,000 + $ 3,000 = $ 18,000 per first month and $ 0 for the following months.
The cost of direct selling will be the sum of the salaries of managers hired for this purpose. Payment for managers’ work will be made hourly; the hospital will employ freelancers since there is no need to hire full-time managers. Besides, there is no need to increase sales to the maximum possible since the hospital professionals’ capabilities limit the services’ volume. The online medical consulting service will be introduced as an additional service provided by the hospital. The salary of three managers who will carry out direct sales per month will be $ 1000 * 3 = $ 3000, which is the sum of the direct selling costs.
Marketing costs will be low as they will consist of printing and installing ten advertisement banners near the hospital, printing 10,000 leaflets, and ads on the hospital’s website. In the future, targeted advertising on the Internet could be launched. The cost of printing and installing ten banners will be $ 1,000. Printing and distributing 10,000 leaflets will be $ 100 (distribution costs are not included, as hospital patients will receive brochures from hospital staff). Therefore, marketing costs are $ 1,100.
Payment processing fees will be minimal as payments will be made through a service provided by local banks. The service will be billed annually and will be $ 10 per month for one laptop. The total cost of the payment processing fee will be 30 laptops * 10 $ = 300 $ per month. The salary of medical consultants will be 50% of the service’s cost, that is, $ 19.5 per service. Therefore, medical consultants’ monthly salary will be $ 19.5 (salary) * 300 (services sold per month) * 3 services = $ 17550 per month. The direct labor cost for health practitioners and selling managers is $ 17550 per month + $ 3000 per month = $ 20550 per month.
As a rule, fixed costs do not change depending on changes in income, and therefore are constant over the time frame of the operating budget. Fixed expenses will amount to salary benefits for the project manager and telecommunications costs. The project manager’s salary benefits will be $ 500 per month, and Internet costs from the general budget will cover telecommunications costs. The online medical consulting service will be provided alternately by 30 professional hospital staff from 8 am to 8 pm. A 1-hour shift schedule will be developed for each employee to enable continuous consulting.
Each employee will conduct four consultations per day and 88 consultations per month in 22 working days. Therefore hospitals’ consulting capacity will be 88 * 30 = 2640 services per month. This load will not exceed the existing Internet traffic limit. Non-cash expenses will include service cost depreciation and equipment depreciation. Non-operating expenses will be 10% income tax for health workers and managers, which is $ 2055 per month.
Operating Budget for Medical Online Consulting Service
|Costs and Revenues||Month 1||Month 2||Change in the following months||Year 1|
|Price per unit|
|Online consulting for expecting mothers (Service 1)||39$||39$||0|
|Online consulting for newborns (Service 2)||39$||39$||0|
|Pediatric online consulting (Service 3)||39$||39$||0|
|Online consulting for expecting mothers (Service 1)||300||300||0|
|Online consulting for newborns (Service 2)||300||300||0|
|Pediatric online consulting (Service 3)||300||300||0|
|Online consulting for expecting mothers (Service 1)||11700$||11700$||0|
|Online consulting for newborns (Service 2)||11700$||11700$||0|
|Pediatric online consulting (Service 3)||11700$||11700$||0|
|Cost of goods sold||18000$||0||0|
|Direct selling cost*||3000$||3000$||0|
|Payment processing fees||300$||300$||0|
|Direct labor cost||20550$||20550$||0|
|Total Variable Costs||39950$||20850$||0||269300$|
|Total Fixed Costs||500$||500$||6000$|
|Total Other Expenses||2055$||2055$||0||24660$|
*is not added to the sum, is duplicated in Direct labor cost.
The capital budget will include the major purchases required, including 30 laptops, 30 app licenses, ten banner ads, and 10,000 leaflets. The amount of major purchases required is $ 15000 + $ 3000 + $ 1100 = $ 19100.
Capital Budget for Medical Online Consulting Service
|Costs||Month1||Month2||Change in the following months||Year1|
|Major Purchases Required*|
|Licenses for app||3000$||0||0||3000$|
*is not added to the sum.
Human Resource Cost Budget
The salary of medical consultants will be 50% of the service’s cost, that is, $ 19.5 per service. Therefore, medical consultants’ monthly salary will be $ 19.5 (salary) * 300 (services sold per month) * 3 services = $ 17550 per month. The direct labor cost for health practitioners and selling managers is $ 17550 per month + $ 3000 per month = $ 20550 per month.
Human Resource Cost Budget for Medical Online Consulting Service
|Costs||Month1||Month2||Change in the following months||Year1|
|Selling managers salary||3000$||3000$||0||36000$|
|Medical consultants salary||17550$||17550$||0||210600$|
* is not added to the sum.
Why Should the Service be Given the Green Light?
Today, many scientists agree that online medical consulting is a useful tool for managing a medical crisis during a pandemic. It is noted that online consultations help alleviate pandemics (Zhou et al., 2020). Scientists also emphasize that the increased number of online consultations satisfied the increased demand for medical services (Zhou et al., 2020). Moreover, online consultations reduce hospital admissions, which is a positive indicator due to working overload. Other scientists note that trust is one of the main driving forces in implementing online consultation services (Li et al., 2018).
Given the current high level of confidence in the hospital staff, the new service will be successful among patients. Finally, experts provide many reasons for high service purchase motivation. Olson (2016) notes that the primary potential users of online counseling services are parents of young children, people with chronic conditions, those who travel much, and caregivers. Given the above, online medical consulting service should be given the green light.
Thus, a business plan for introducing the medical online consulting service in Holtz Children’s Hospital was provided. This business plan gives a comprehensive explanation of why a children’s hospital should implement this service. The two main reasons for this are patient safety and a tremendous competitive advantage over independent companies associated with patient EHRS connectivity. Besides, the business plan presents an operational budget for the service that proves the service’s potential profitability. The service will also increase the hospital’s rating in patients’ eyes and may attract new clients to the hospital.
Potential drawbacks may include increased workloads for doctors and nurses, which could affect the service’s quality. However, thanks to fair wages for health practitioners, a well-thought-out working schedule, and convenient technical application in the form of a licensed app and personal laptops, the project will overcome possible adverse side effects.
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