GMAs INCREASE REVENUE!

Some organizations choose to develop a business plan before proceeding with Group Medical Appointments. Atypical business plan defines the scope of work to be undertaken, the resources required to implement the plan and the expected benefits including return on investment calculations. The following information is included to assist those organizations who choose to create a detailed financial model before starting GMAs.

Typical GMA costs include: facilitator salary, benefits and training; marketing flyers, mailers, newsletters; and group room space (eq. lease costs).

Revenue Increase Calculation Example:

The key to calculating the revenue increase is to begin with an agreed upon measure for the value of a physician's time. Most organizations already have a measure or can easily calculate one. Some commonly used measures are: Charges per hour, RVU's per hour, or Encounters per hour.

As an example, let's say that our physician generates an average of $16,000 in charges per week for 40 hours of work (before adding GMAs). So the physician generates $16,000 ÷ 40 = $400 in charges per hour.

In a 90 minute Group Medical Appointment we estimate the physician will generate $960 in charges.

The calculation of revenue increase from GMA's is:

GMA charges - (charges per hour × 1.5 hours) or
$960 - ($400 × 1.5) = $960 - $600 = $360 per GMA

Assuming two GMA's per week, the annual revenue
increase is:

2 GMAs × 52 weeks × $360 per GMA = $37,440
 

Return on Investment
Continuing with our example, assume we incurred $10,000
in start-up costs and project annual costs of $20,000.

R.O.I. =
Start-Up Costs
Revenue Increase - On-going Costs

0.57 =
$10,000
$37,440 - $20,000

For this example the ROI is 7 months (.57 ×12).