You have been placed in charge of the Lowell SARS-CoV-2 (COVID-19) immunization clinic. You are using the Johnson & Johnson vaccine which only requires one shot. The head of the Lowell Public Health Finance Office is asking you to project the financial implications of this new program for the entire year. Specifically, she is wondering whether you will be making or losing money and what is your average cost per dose for the vaccine. What will you tell her? You set up your clinic in specially rented space that is costing $1500 per month. Your salary with fringes is $90,000 per year and you estimate that you will devote 50% of your time to running the clinic. In addition you will need to hire a full time pharmacist (annual salary with fringes $70,000) to prepare the vaccine and a licensed practical nurse (annual salary with fringes $50,000) to administer the vaccine. Cleaning of the clinic will be performed by the City of Lowell Housekeeping office which has an annual budget of $300,000. Based on the square footage of your clinic compared to the other spaces they care for, you estimate you will need 10% of their time. The City of Lowell IT Office has an annual budget of $200,000 and you estimate they will spend 10% of their time in developing software for the clinic. The vaccine costs $64 per dose and the needle and syringe costs $1 per dose. Medicaid and insurance companies will reimburse you $95 per immunization. You estimate that you will provide 20,000 immunizations in the first year. Based on these estimates what will you say as to whether you will be making or losing money over 1 year and what is your average cost per dose for the vaccine? Show your calculations. Explicitly identify fixed direct costs, indirect costs, variable direct costs and total revenue. How will your estimates change if you perform only 15,000 vaccinations instead of 20,000?
Answers
Explanation:
to prepare the vaccine and a licensed practical nurse (annual salary with fringes $50,000) to administer the vaccine. Cleaning of the clinic will be performed by the City of Lowell Housekeeping office which has an annual budget of $300,000. Based on the square footage of your clinic compared to the other spaces they care for, you estimate you will need 10% of their time. The City of Lowell IT Office has an annual budget of $200,000 and you estimate they will spend 10% of their time in developing software for the clinic. The vaccine costs $64 per dose and the needle and syringe costs $1 per dose. Medicaid and insurance companies will reimburse you $95 per immunization. You estimate that you will provide 20,000 immunizations in the first year. Based on these estimates what will you say as to whether you will be making or losing money over 1 year and what is your average cost per dose for the vaccine? Show your calculations. Explicitly identify fixed direct costs, indirect costs, variable direct costs and total revenue. How will your estimates change if you perform only 15,000 vaccinations instead of 20,000?
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