An urban, coastal hospital struggled during summer months to reach more remote parts of its market areas due to traffic congestion. In additional, fast growth created emerging areas that did not have high levels of access to hospital or emergency care. This hospital desired to locate a Freestanding Emergency Department in an area with desirable demographic and growth profile, while also understanding the impact, if any, of a new facility on its existing hospital income.
Catalyst’s charge was to complete a comprehensive proforma that considered potential market size and makeup, location, appropriate facility sizing, and costs of construction and operating. With the input of ED, finance and other hospital staff, Catalyst created an interactive set of tools that allowed the hospital stakeholders to manipulate growth, revenue and cost variables and allowed the testing of multiple conservative and aggressive scenarios. Catalyst developed a set of proxies for revenue and cost targets based on known operations and contractual arrangements at the main hospital.
Catalyst determined that one area was more attractive than another for creating a facility due to a number of factors, including available land, an attractive demographic, available services and fast growth. The proforma identified not only whether the endeavor would be profitable, but also provided a break even point during a ten-year period. Catalyst also provided a space program for the planned facility that would specifically meet the needs of the new local market.