Medline
Consulting
Complete
Healthcare Management Solutions
Contents Page
1.0 Medline Consulting – Company Profile 1
1.1 Sanjay
Cherian 1
1.2 Christy Li 2
1.3 Abi
Akin-Bankole 2
1.4 Laurynas
Jonusauskas 2
1.5 Joseph
Lynn 2
2.0 External Environment – Indian
Healthcare 3
2.0.1 Political Factors 3
2.0.2 Economic Factors 3
2.0.3 Social Factors 3
2.0.4 Technological Factors 3
2.1
Competitive Factors 4
3.0 Medline Consulting Services 4
4.0 Market Segmentation 4
4.1
Service Positioning 5
4.2
Competitor Evaluation 5
5.0 Competitive Advantage 5
6.0 International Growth Strategies 6
7.0 Financial Evaluation 6
7.1
Scenario Analysis 7
8.0 Conclusion 7
9.0 Appendix A 8
10.0 Appendix B 8
11.0 Appendix C 9
12.0 Appendix D 9
13.0 Appendix E (I) 10
13.1
Appendix E (II) 10
1.0 Medline Consulting – Company Profile
Medline
Consulting provides hospitals an innovative platform offering expertise in
operations, technologies and management services. Medline Consulting has many
years of experience within the complex Indian Healthcare environment from which
we draw our management expertise.
Our
vision:
·
To raise the quality of
healthcare management services in India
and Asia to world-class standards
To raise the quality of
healthcare management services in
Our
mission:
·
To deliver recommendations
for efficient administration, inventory management, integration of medical
records, financial solutions and efficient use of human resources
·
To reduce patient waiting
time, dramatically increase productivity, and consistently deliver the highest
quality in patient care
·
To develop management pathways for hospitals
to benchmark their services and achieve the “Gold Seal of Approval” from The
Joint Commission (International Accreditation for Hospitals)
1.1 Sanjay Cherian – Director of Operations & Process
Management
A
qualified medical doctor holding a Masters in Surgery, and a PhD in Cardiac
Surgery, with over 8 years experience treating critically-ill patients, he has
held responsible positions at several heart centres in India Oxford
1.2 Christy Li – Director of Finance
Having
obtained her Bachelors in Mathematics, and a Fellowship from the Institute of Actuaries Oxford
1.3 Abi Akin-Bankole – Director of Market Research
Holding
a Bachelors in Computing, she has 8 years professional work experience in
insurance and telecommunications. She is enthusiastic, driven by an urge to
bring satisfaction to clients by providing concise market research. She is on
the Board of a Nigerian IT firm, and runs a successful clothing/accessories
company. She is currently undertaking an MBA at Grenoble Graduate School of
Business.
1.4 Laurynas Jonusauskas – Director of Human Resources
Laurynas
Jonusauskas has a PhD in History, and 13 years of experience in diplomatic
capacities working in close relation with the European Union, as well as with
Central European countries. He has authored and co-authored several historical
books. His core competencies include International Relations, and Human
Resource Management.
1.5 Joseph Lynn – Director of Information Systems
He
has diverse experience in Information Systems, having worked for blue chip
firms including American Express, and other corporate clients since 2001. He is
Director of Techahedron, an emerging IT Services firm experiencing steady
growth. His core competencies include web services, enterprise solutions and
open source, providing competitive advantage through integrated Information
Systems.
2.0 External
Environment – Indian Healthcare
The
Indian healthcare environment is extremely dynamic. It is propelled by the
rising demand for medical care, and the rapid advances in medical technology. A
PEST analysis was undertaken to assess the Healthcare business environment in India
2.0.1 Political Factors: Indian
Healthcare is estimated at US$ 34 billion, growing at a rate of 16% annually[1].
Inadequate infrastructure in government-funded hospitals has resulted in a boom
in private sector hospitals[2].
Taxes and customs duties are imposed on imported medical products, in order to
promote domestic production and to also improve investment in healthcare.
2.0.2 Economic Factors: Availability of credit
facilities, interest rates, and economic policies have a significant impact on
investment opportunities in all sectors, including healthcare.
2.0.3 Social Factors:
With a steadily increasing population and
lifestyle changes, there is a rising demand for hospitals in India India
2.0.4 Technological Factors: Healthcare
is highly technology dependent, and hospitals, like other organizations, are
under constant pressure to update their Information Technology systems and equipment,
despite the high costs of repairs and replacements..
A
detailed “size up” analysing the strengths and weaknesses of each PEST factor is listed in Appendix A.
2.1 Competitive factors – Healthcare Management Consultancy
Management
Consultancy in Indian Healthcare is a very attractive opportunity, representing
a “niche” segment, since there is a growing demand for Healthcare Management
Consultants to match with the rising number of private hospitals. Detailed
analysis of the threats in the existing Indian Healthcare Management
Consultancy environment as demonstrated by Porter’s 5 Forces, revealed a low to
neutral threat, indicating a good potential market (Appendix B)
3.0 Medline
Consulting Services
Medline Consulting provides
professional consultancy services for
private hospitals and their affiliates through process and operations
management, leading to an enhanced customer experience. The company’s “critical
success factor” is customer satisfaction, which is achieved primarily through
streamlining of the various management processes within hospitals by providing
medical and technological expertise to enhance productivity and customer
service. Medline Consulting clearly understands and adapts to the core values
of the hospitals and its patients, namely, the service quality, dependability,
fast service, staff flexibility, and affordable cost.
4.0
Market Segmentation
Market
analysis indicates an evidence of increasing growth within the healthcare in India
and Asia (Table 1), leading to a
consequent increased demand for healthcare management consultancy.
1. Pharmaceutical – US$10 billion growing at 12% despite global economy
2. Hospitals/Nursing Homes – US$12 billion – growing at 20%
3. Medical Equipment – US$2 billion, growing at 15%
4. Clinical Lab Diagnostics – US$2 billion – growing at 30%
5. Imaging Diagnostics – US$1 billion – growing at 30%
6. Services – US$2 billion – growing at 40%
Table 1
4.1 Service Positioning
Medline Consulting is positioned as a
consultancy firm that works with private hospitals to strategically plan and
improve business processes to meet the high expectations of both hospitals and
patients.
4.2 Competitor
Evaluation
There are few healthcare consultancy firms in India , including Hosmac India Ltd (in Mumbai),
MedRite Health Solutions (in Hyderabad ), and
Astron Hospital & Healthcare Consultancy (in New Delhi
5.0 Competitive
Advantage
Private
hospitals within the Indian Healthcare sector are currently managed either by
General Management Executives who focus on narrow financial objectives, while
being unaccustomed to the realities of patient care or by Medical Professionals
who excel in their area of medical expertise, but often encounter challenges in
healthcare management due to their poor business acumen.
Medline
Consulting are strategically positioned to help provide quality operations and
process management services to private hospitals within the Indian Healthcare
sector by efficiently leveraging the core competencies of its Directors. We
offer a unique blend of excellent healthcare expertise and competent business
capabilities, bringing efficiencies in operations, while emphasising on the
quality of patient care.
Working
in close conjunction with hospitals, using a combination of our proprietary
methodology, expansive toolkit and knowledge expertise, Medline Consulting
develops clear management pathways for hospitals to benchmark their services
and achieve the “Gold Seal of Approval” from The Joint Commission
(International Accreditation for Hospitals), thus emerge as “leaders in quality
and safety within the healthcare environment”.
6.0 International
Growth Strategies and Alliances
Medline
Consulting plans to initially launch in Chennai, with a jurisdiction which
covers around 10 multi-specialty hospitals and over 100 smaller medical
practices. Medline Consulting intends to pursue aggressive growth objectives
through market development strategies leveraging our professional reputation
and client testimonials to expand into South India
by 2012. This growth will offer the credibility to build relationships with
doctors, hospitals and medical insurance companies to further extend our
services to the whole of India Pakistan , Nepal ,
Bangladesh and Sri Lanka
7.0 Financial
Evaluation
The
attached 4 years company value analysis (Appendix D) is developed by using the
Rappaport model based on realistic forecast on sales and operating expenses. We
have developed a preliminary budget to launch our business – the initial set-up
cost is estimated to be £20,000, including training, installation of
information systems, administration and advertising. MedLine Consulting is
proposed to be mainly financed by shareholder loans.
With
a fast-growing healthcare environment and our expanding client networks, with a
4-year planning horizon, we have projected our client base to grow by 30% each
year. Initially, we propose to charge £10,000 for a full set of consultation
based on the clients’ requirements. The consultancy charge is expected to
increase by 10% after the first year of operation.
For
non-fixed operating expenses (incorporating a 2% inflation rate) include
administrative and marketing expenses, rent, salaries and training. In order to
increase the sales, we projected the incremental working capital to be 10% per
annum. The corporate tax rate is calculated at 33% p.a., and the cost of
capital is assumed to be 5.5% based on major banks’ prime rates.
We
forecast to generate a positive cash flow within our 4-year planning horizon,
by when Medline Consulting will be valued at £205,482 assuming no further
expansion.
7.1 Scenario analysis
A
scenario analysis is established to analyze the possible future company values
by considering the best and worst scenarios (Appendix E). The model
demonstrates the variables of initial number of clients, rate of client base
growth, and the gross profit margin are highly sensitive to the future cash flow
and the payback period.
8.0 Conclusion
Through
close collaborations with hospitals, doctors, health insurance companies, and
general management consultants, using a combination of our proprietary
methodologies, an expansive toolkit and knowledge expertise, Medline Consulting
is the clear choice for providing high quality and cost-effective healthcare
management solutions.
9.0 Appendix A
10.0 Appendix
B
11.0 Appendix
C
12.0 Appendix D
Constants: Variables:
Consulting fee $10,000 Client
base growth 30%
Set up cost $20,000 Consulting
fee growth 10%
Operating expense $10,000 Gross
profit % 50%
Shareholder loan $20,000 Expense increase 2%
Tax rate 33%
Inc. WC investment 10%
Cost of capital 6%
Company Value Analysis: (in USD)
|
Year
|
0
|
1
|
2
|
3
|
4
|
|
No. of clients
|
10
|
13
|
17
|
22
|
29
|
|
Sales
|
100000
|
143000
|
185900
|
241670
|
314171
|
|
Gross Profit
|
50000
|
71500
|
92950
|
120835
|
157086
|
|
Set up Cost / Expenses
|
30000
|
10200
|
10404
|
10612
|
10824
|
|
Operating Profit
|
20000
|
61300
|
82546
|
110223
|
146261
|
|
Tax
|
6600
|
20229
|
27240
|
36374
|
48266
|
|
Incremental WC investment
|
|
4300
|
4290
|
5577
|
7250
|
|
Operating FCF
|
13400
|
36771
|
51016
|
68272
|
90745
|
|
Present Value of FCF
|
13400
|
34854
|
45835
|
58142
|
73251
|
|
Acc. PV
|
13400
|
48254
|
94089
|
152231
|
225482
|
Summary:
Present Value
of Future Cash Flow: $ 225482
Company
Value: $ 205482
13.0 Appendix E (I)
Constants: Variables:
Consulting fee $10,000 Client
base growth 30%
Set up cost $20,000 Consulting
fee growth 10%
Operating expense $10,000 Gross profit % 30%
Shareholder loan $20,000 Expense increase
2%
Tax rate 33%
Inc. WC
investment 10%
Cost of capital 6%
Company Value Analysis - Best
scenario: (in USD)
|
Year
|
0
|
1
|
2
|
3
|
4
|
|
No. of clients
|
15
|
23
|
34
|
51
|
76
|
|
Sales
|
150000
|
247500
|
371250
|
556875
|
835313
|
|
Gross Profit
|
105000
|
173250
|
259875
|
389813
|
584719
|
|
Set up Cost / Expenses
|
30000
|
10200
|
10404
|
10612
|
10824
|
|
Operating Profit
|
75000
|
163050
|
249471
|
379200
|
573894
|
|
Tax
|
24750
|
53807
|
82325
|
125136
|
189385
|
|
Incremental WC investment
|
|
9750
|
12375
|
18563
|
27844
|
|
Operating FCF
|
99750
|
99494
|
154771
|
235502
|
356666
|
|
Present Value of FCF
|
99750
|
94307
|
139054
|
200557
|
287906
|
|
Acc. PV
|
99750
|
194057
|
333111
|
533667
|
821574
|
Summary:
Present Value
of Future Cash Flow: $ 821574
Company
Value: $ 801574
13.1 Appendix E (II)
Constants: Variables:
Consulting fee $10,000 Client
based growth 30%
Set up cost $20,000 Consulting
fee growth 10%
Operating expense $10,000 Gross
profit % 50%
Shareholder loan $20,000 Expense increase 2%
Tax rate 33%
Inc. WC
investment 10%
Cost of capital 6%
Company Value Analysis - Worst
scenario: (in USD)
|
Year
|
0
|
1
|
2
|
3
|
4
|
|
No. of clients
|
5
|
6
|
7
|
8
|
9
|
|
Sales
|
50000
|
63250
|
72738
|
83648
|
96195
|
|
Gross Profit
|
15000
|
18975
|
21821
|
25094
|
28859
|
|
Set up Cost / Expenses
|
30000
|
10200
|
10404
|
10612
|
10824
|
|
Operating Profit
|
-15000
|
8775
|
11417
|
14482
|
18034
|
|
Tax
|
4950
|
2896
|
3768
|
4779
|
5951
|
|
Incremental WC investment
|
|
1325
|
949
|
1091
|
1255
|
|
Operating FCF
|
-19950
|
4554
|
6701
|
8612
|
10828
|
|
Present Value of FCF
|
-19950
|
4317
|
6020
|
7334
|
8741
|
|
Acc. PV
|
-19950
|
-15633
|
-9613
|
-2279
|
6462
|
Summary:
Present Value
of Future Cash Flow: $ 6462
Company
Value: $ -13538
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