Bellaire Clincal Labs Essay

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INTEROFFICE MEMORANDUM TO: WANDA LANDS FROM: JOE MACK DATE: OCTOBER 22, 2003 SUBJECT: 2003 OPERATING PLAN This memo is being written in regards to the 2003 operating plan for Bellaire Clinical, Inc., the media campaign for 2003, and the future of Bellaire. The purpose of this memo is to highlight key factors regarding the operating plan in order to prepare for the next operating year. Competition has started to increase in the clinical laboratory testing industry, causing some uncertainties in the upcoming year. The new marketing plan looks to promote Bellaire’s accuracy, responsiveness, and flexibility in hopes to bring in new specialty contracts to improve Bellaire’s performance. Numerous hours have been spent developing the…show more content…
Many laboratory companies are attracted to Boston due to their high concentration of physicians and hospitals. Also, due to Medicare and Medicaid’s increased efforts to control costs of health care services, Bellaire’s operating margins have been negatively affected over the past few years. The planned media campaign has the ability to increase the number of tests performed. The success of the planned media campaign and company performance has a great impact on Bellaire Labs’ future. Estimation of Revenues According to Brownlee, II, Lilly, and Lynch (2004), each year “Bellaire follows these five-steps to determine planned revenues: • Estimate future test volumes based on prior year actual test volumes, customer needs, competition, demographic shifts, and contract negotiations • Estimate how many tests are to be routine and how many are to be specialty tests • Estimate what proportion of tests will be billed to physicians, patients, or other parties like Medicare, Medicaid, or private insurance companies • Determine expected average price per test for routine and specialty tests based upon planned tests and negotiated fee schedules • Calculate overall revenue and review total volumes and revenues for reasonableness” Various estimations cause changes to be made from 2002 to 2003. Overall tests volumes for 2003 can be predicted to increase between 1.5% and 2.5%, due to the demographic shift in the population of

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