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Organization of a Healthcare Facility

Incorporating the Clinic

The main goal of opening a business enterprise is to earn profit. Careful analysis should precede business plan development to determine the best business form that will maximize profit, reduce liabilities, minimize taxes, and yet maintain effective running of the business. In cases where running of a business involves more than one person, it is advisable to formulate a memorandum of understanding or operation rules that would define ownership stakes, roles, and duties of each employee. The choice of business entity is guided by a number of factors. The degree to which personal assets are protected from risks associated with business liabilities is the first core factor to consider. It is particularly important to create boundaries between personal life and business activities. Secondly, it is necessary to start a business that will attract investors and lenders who can help the business to grow fast. Moreover, financial plan should provide  incentives for employees that are realistic, attractive, and yet beneficial for the business. In addition to these factors, the cost of starting and running the business is also important in operating a business venture. Finally, the strategy of taxation must be given careful consideration in order to avoid double or even multiple taxation of the income generated (Fialky, 2012).

Advantages of Incorporating the Clinic

There are several reasons that will motivate the decision to incorporate the business. The hospital sector will be involved in providing services to a wide range of customers. Judging from the trends in the healthcare market, the owner of the business must be protected from risks of business liabilities. Therefore, one of the advantages that the venture will enjoy after incorporating the enterprise is personal assets protection. The owner of the business will be protected from creditors’ recovery of debts. In this sense, personal assets will be out of bound in the operation of the business. Therefore, stakeholder(s) resources will safe thus allowing them to invest without fear (Carter, 2012).

Another advantage of incorporating the enterprise is to ensure its long-lasting existence. Corporations may last for a long time even after their original owners are gone. Incorporated management of enterprises and their operations continue regardless of the owners of the venture at any given time. The increase or reduction of the number of shareholders does not in any way affect the existence of the business (Fialky, 2012). Unlike other business, where withdrawal of one partner leads to dissolution of the business, corporate venture cannot be affected by this factor. Moreover, the existence of shares reduces the hustles related to ownership transfer in future in case there is a need to do so. This advantage attracts investors, who feel safe to invest in the business since they can easily pull out their money in case of business failure (Fialky, 2012).

Incorporating the clinic has an additional advantage of enjoying low taxes as compared to other forms of business such as a partnership or proprietorship. One way of achieving lower taxation is to minimize salary paid to stakeholders in order to minimize escalated rates of individual taxation and earn income from the enterprise in the form of dividends that are minimally taxed. Incorporating the clinic also give it an ability to adjust salaries that owners get in ways that impact corporation's profits and, subsequently, its tax obligations (Carter, 2012).  The business person can venture in pension projects and other fringe benefit packages for a corporation for the reason that they can be categorized as tax-deductible enterprise expenditures. In this form of business, expenditures such as medical expenses, entertainment expenses, commuting costs, and recreational facilities costs all become tax deductible, which is an added revenue generation strategy.

Raising capital for the business is also easier for incorporate businesses. Through issuing of shares, the business will be able to raise starting capital more easily. The nature of business being incorporate venture attracts financial lending institutions, which can support the business financially. This will expand the business to serve many customers by increasing the number of clinicians. The clinic will also be able to raise additional funds through issue of stock and expand the number of stocks traded. The stock market can be increased by offering customers favorable incentives. This will help in recruiting talented clinicians and professionals who have the required specialization (Carter, 2012).

Incorporating the clinic will make people interested in the business form a positive perception of long-term financial stability. This will help to increase the total number of people willing to invest in the business.

Disadvantages of Incorporating the Clinic

Apart from the above stated advantages of incorporating the business, the clinic will faced a number of difficulties associated with corporate businesses. The main disadvantage of incorporating the clinic will be associated with double taxation. In many cases, dividends earned from shares as well as business profits are taxed. Thus, people who are workers in the clinic and happen to be shareholders of the clinic will experience this financial disadvantage. This is different from non-corporate firms where only profit is taxed. The clinic will be registered as S-corporation that does not suffer from this financial disadvantage (Carter, 2012). 

The clinic will have to undergo or prepare to cope with added costs of operation associated with maintenance of records and securing statutory regulations and formalities. The clinic will be governed by a set of regulations, which are usually not emphasized in sole proprietorship or partnership forms of business. These regulations, maintenance certificates, reports about the meetings, and other necessary records will have to be maintained in appropriate order and safety (Carter, 2012).

Separation of personal assets from business liabilities can also negatively impact the owner. Individuals cannot borrow money from incorporate financial account. This leads to loss of flexibility because in cases of personal debts, there is no ability to use business finances to cater for the debts.  

Therefore, judging from the above discussion, it would be wise to incorporate the clinic in order to make it successful.

Determining the Feasibility of the Clinic

Judging from the location of the clinic, it is likely that the venture will be a profit making organization. Therefore, the feasibility study needed in this case is that of revenue generating firm. Feasibility study is defined as a write-up, which evaluates the viability of a project. It is useful for the administration and management team. There are some areas that need to be evaluated while conducting the feasibility study for this clinic. These areas are discussed further in the paper.

Market Analysis

The study should gather information related to past, present, and forecasted market gap. This will be done by an in-depth analysis of the demand and supply figures related to fields of dermatology, gynecology, heart disease, respiratory disease, surgery, and gastroenterology. Conditions related to heart diseases, dermatology, respiratory problems, and surgery are common with affluent people. In this case, the location of the clinic justifies the demand for services meaning that there are potential clients (market). The level of income for people living in the proposed location will make them able to afford to pay for the services. The supply for targeted services needs consideration. This will help to determine the competition scale and level of likelihood that clients will prefer this clinic over others (Savior, 2011).

Technical Analysis

Technical analysis involves evaluation of the size of the clinic and whether it is able to offer the projected amount of services. The size of the clinic will mainly depend on the size of the market. The location of the clinic in an exclusive neighborhood has a favorable position for the clinic to thrive. The clinic will have to be opened at a strategic time. Moreover, the clinic should consider implementing the most effective and efficient technology in its operations. For instance, surgery procedures and laboratory investigations should be carried out using the updated technology (Savior, 2011).

Financial Analysis

The clinic should ensure that financial analysis is in balance with its operations. The expenses (administrative, miscellaneous, capital, and operational cost) should be less than the revenue generated by the amount that can allow the clinic to sustain its operations without any external funding. Revenue sources should be well delineated and the expected amount of profit for the next five years must be projected (Savior, 2011).

Environmental Analysis

Wastes from the hospital should be well disposed in a way that will not interfere with the environment. They should not in any way contribute to the environmental pollution.

Organizational Analysis

A realistic outline of the clinic’s mission, vision, and philosophy should be drafted and validated to gauge their purported influence on the community. Operational analysis also includes determining the organizational structure, flow of command, and job descriptions for each level (Savior, 2011).

With a help of the analysis of the above fields it will be easier to determine the profitability of the clinic.

Contract Structure with Necessary Clauses for Medical Staff

There are certain rules that relate to contracts. First, it should be written and structured like a form. Second, involved parties must be legally eligible to sign a contract, while the contractor must obtain their consent in a non-coercive manner. Lastly, the contract must be within the jurisdiction of the law (Defense Acquisition University, 2011). The contract structure is illustrated below:

Performance Management Agreement for the Year 2012



.................................................................. Clinic/ Hospital


................................................................... Medical staff


This service agreement made and entered into on ‘3/08/2012’ by the Administrator of ‘This Clinic’ and ‘Medical Staff’.



The clinic administrator is engaged in employing the medical staff to deliver services in the clinic.

The medical practitioner involves in delivering services to patients as stipulated in his/her job description.

The clinical administrator and the medical staff collaborate to protect the wellbeing of patients.

Therefore, in consideration of mutual covenants and other considerations described here, the two parties agree to the following;

1.1 Non-solicitation clause:  as a medical staff, you should not solicit other employees of this clinic to work for you after you terminate your contract.

1.2 Non-competition agreement: the full time medical staff should not work in another sector that competes with and harms clinic’s activity, unless called to assist, consult, or he or she is a student in a program of the external sector.

1.3 Termination clause: the contract holds for ten renewable years. However, a contract may be terminated on the basis of under-achievements, moral turpitude, low standard of care, lack of cooperation, failure to uphold the institution’s code of ethics, or personal interest in terminating the contract.

1.4 Changes agreement: the clinic’s administrator can make changes to the contract during performance as long as those changes fall within the contract's scope. The medical staff is entitled to an equitable adjustment of the contract when changes made by the administrator result in increased contract costs or performance time (England, 2000).


2.1. In case of a disagreement regarding the contract the clinical administrator and the medical staff have a duty to resolve matters without resorting to arbitration arrangements. In case of a failure to do this, hospital’s authorized representatives must try to resolve the issue(s) and their decision must be jointly agreed upon and written down as a proof.

2.2 Inclusions of this contract shall be construed and its implementation, therefore, should be governed in correspondence to the laws of the State of Texas, USA.

Plan for Hiring Specialists for the Clinic

Hiring and filling of the employees of and required specialists will be based on their qualifications. Since this is a business entity, the remuneration stated by applicants should also be considered during the recruitment process. The plan to be devised for hiring employees will undergo a general recruitment procedure. The required number of vacancies in every department of the hospital is identified. Job descriptions of a vacancy and person’s specifications will then be drafted to ensure that the right person fills the vacancy. After this step, vacancies will be advertised through available media with the aim of attracting many specialists. Media that can be used are posters, radio, television, newspapers, magazines or the website. Once the advertisement is done, the clinic will appoint a number of interviewers to assess the qualification levels of people, who sent their application forms. The responses of vacancies will be analyzed and categorized into three groups: those who do not qualify, candidates with marginal qualification, and those who fully meet the requirements. Those who do not qualify are eliminated at this point, while those with marginal qualification are given a chance in case candidates who are qualified fail to respond (Heathfield, 2012).  

Qualified individuals are listed. A convenient date for an interview will then be set by the interviewer. The listed individuals will be sent an invitation note to attend the interview. The role of the interviewer is to identify personal fitness for the job and also to help identify other traits not pronounced in the job description. The interview will then be conducted by a panel of interviewers, and candidates will be evaluated accordingly. The decision is then made through rating applicants’ abilities and qualifications. Successful candidates will then be invited to orientation and training once the clinic starts its operations (Heathfield, 2012).

Medicare/Medicaid as Potential Pay sources for the Exclusive Clinic

Medicare covers are available for all American citizens who are 65 years and also for people with certain disabilities. The program is funded by the payroll taxes and program participants. Including this program in the payment strategy of the clinic will maintain flow of cash from people outside the “exclusive neighborhood”, who may seek medical attention here. Moreover, some of the conditions are managed using highly expensive drugs, the cost of which needs to be covered by such programs (Kathleen et al., 2007).

Medicaid is funded by the federal and state government. However, its qualification clause proves to be more complex than the one of the Medicare program. It is supposed to cater for those people who are poor, but some conditions and restrictions that vary from state to state disqualify some of the citizens. Services covered by this program encompass a wide range of services carried out in hospitals (Kathleen et al., 2007).

In the healthcare sector consistent flow of cash is extremely important. Services offered to most clients are not negotiable due to the agency and vitality. Therefore, in cases where a patient cannot pay for services and the condition has to be managed, it is better to accept the insurance cover than lose the income. Medicare and Medicaid are secondary sources of income that are important when the patient cannot pay for but receive hospital services. Several hospitals have been closed especially along the Mexican-American border due to influx of immigrants who benefit from free care and who are not covered. However, there are several cases of improvement in hospital management through funding from Medicare and Medicaid programs. These programs are important in ensuring that cases of fraudulent debts do not occur in hospitals. The two programs are extremely crucial in assisting to pay for the drugs (Kathleen et al., 2007).

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