Describe the three-level revenue forecast

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Reference no: EM132742475

Assignment: Three-Level Revenue Forecast

Three eye-ear-nose-and-throat physicians decide to hire an experienced audiologist in order to add a new service line to their practice.

They ask the practice manager to prepare a three-level volume forecast as a first step in their decision making.

Assume audiologists were designated as "eligible for physician and other prescriber incentives." Thus the new service line was a logical move.

Assumptions: For the base level (most likely) revenue forecast, assume $200 per procedure times 4 procedures per day times 5 days equals 20 procedures per week times 50 weeks per year equals 1,000 potential procedures per year.

For the best-case revenue forecast, assume an increase in volume of one procedure per day average, for an annual increase of 250 procedures (5 days per week times 50 weeks equals 250). (The best case is if the practice gains a particular managed care contract.)

For the worst case revenue forecast, assume a decrease in volume of 2 procedures per day average, for an annual decrease of 500 procedures. (The worst case is if the practice loses a major payer.

Reference no: EM132742475

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