Appendix 4: Sample Business Plan

How to Successfully Integrate Midwives into Your Practice | Appendix 4

This sample Business Plan was developed by Heather Shannon, CNM, MS, MPH as part of her MPH

project. A small community hospital used this plan to launch a practice with two midwives and includes

plans for practice growth and the addition of more midwives. See Appendix 2 for a high-level summary

of the financial considerations as well as a sample pro forma tool to help developing a business plan for

integrating midwives.

Business Plan for

Midwifery Practice at

HOSPITAL

YEAR

By AUTHOR

Executive Summary

An opportunity exists for the development of a midwifery service at YOUR HOSPITAL and YOUR

PRACTICE to be implemented in the 20XX fiscal year. The practice model will be provider-based nurse

midwives, integrated with the existing Department of OB/GYN. As part of ongoing efforts to improve

access to care in YOUR County, HOSPITAL and YOUR DEPARTMENT jointly support this idea of a new

midwifery practice.

Midwifery care focuses on diagnosing and treating conditions related to women’s health during

their lifecycle. Midwives are primary care providers that manage medical conditions within their scope

of practice, provide educational support, and focus on prevention to increase individual health and

wellness of all gynecological and obstetrical patients. XXX Midwifery Practice will be a venue for women

in need of access to full-scope midwifery care or for women seeking an alternative to traditional

allopathic gynecological and obstetrical care.

The population that will benefit most is located on the near west side of YOUR CITY and YOUR

County and is made up of primarily of Latino, African American, and Caucasian women. By starting a

practice in this area, it offers an opportunity to care for women in zip codes with an underserved,

disparate population affected with limited access to care and adverse perinatal outcomes as well as

those women interested in midwifery care. Besides the underserved urban population, the practice will

draw on the suburban and rural population from western YOUR County. The patient mix anticipated will

be XXX% obstetrical and XXX% gynecological. The payor mix anticipated will be XXX% public insurance

(Medicaid) and XXX% private insurance.

Seed money for the XXX Midwifery Practice during the startup and first two years of operations

will need to be explored. The financial plan shows the practice will be financially dependent on seed

money for the first two years and by year three, the practice will begin to show a profit. Years four and

five will show a profit and sustainability as patient volume continues to grow. The projected start-up

costs will be $XX, which includes marketing, renovations, office furniture, equipment, and supplies, and

building rent. Year one, the anticipated practice costs will be $XX and revenues will be $XX, for a deficit

of $XX. For year two, the anticipated growth will be XXX% and practice costs will be $XX with revenues

of $XX and a deficit of $XX. In year three, the anticipated growth will be XXX% and practice costs will be

$XX with revenues of $XX. The practice will see its first profit of $XX. In year four, the anticipated

growth will be XXX% and practice costs will be $XX with revenues of $XX, yielding a profit of $XX. In year

five, the anticipated growth will be XXX% and practice costs will be $XX with revenues of $XX, yielding a

profit of $XX.

There is a need in YOUR County women’s health market for midwifery care, specifically on the

LOCAL AREA. YOUR County has the largest number of zip codes, scoring below the national average for

early prenatal care (PNC), indicating that it has a high proportion of women who do not receive PNC in

their first trimester in XXX (see Appendix A). YOUR County has eight zip codes above the national

average for low birth weight (LBW)

of XXX% (see Appendix A). Five of the XXX zip codes are within a

two miles of the proposed near west side location. YOUR HOSPITAL is positioned to develop a

midwifery practice, which meets the needs of the community and the hospital. The philosophy of

midwifery care will complement the culture at XXX and will serve to assist the institution in achieving its

goals of excellence in women’s services into the future.

LBW is defined as neonatal weight at birth of 5lb 8oz or 2,500grams from CDC

http://www.cdc.gov/pednss/what_is/pednss_health_indicators.htm

Table of Contents

Company Summary ....................................................................................................................................... 5

Scope of Services .......................................................................................................................................... 7

Management Systems................................................................................................................................... 8

Information Management and Technology .............................................................................................. 9

EMR ........................................................................................................................................................... 9

Billing ......................................................................................................................................................... 9

Financial Plan .............................................................................................................................................. 10

Five Year Plan .............................................................................................................................................. 11

Start-up ................................................................................................................................................... 11

Year One .................................................................................................................................................. 14

Year Two ................................................................................................................................................. 16

Year Three ............................................................................................................................................... 18

Year Four ................................................................................................................................................. 20

Year Five .................................................................................................................................................. 22

Market Analysis Summary .......................................................................................................................... 26

Market Segmentation ............................................................................................................................. 26

Consumers .......................................................................................................................................... 26

Competition ........................................................................................................................................ 27

Target Market Segment Strategy ........................................................................................................ 27

Service Business Analysis ........................................................................................................................ 27

Competition and Buying Patterns ....................................................................................................... 28

Marketing Strategy ..................................................................................................................................... 28

Marketing Materials ............................................................................................................................... 29

Marketing Expenses ................................................................................................................................ 29

Sales Strategy .......................................................................................................................................... 30

Keys to Success

........................................................................................................................................... 31

Appendices .................................................................................................................................................. 33

Company Summary

XXX Midwifery Practice will be a provider- and academic-based midwifery practice that offers

many advantages to XXX and its community. This practice will be folded into an existing infrastructure

through the XXX department of OB/GYN and will offer a competitive edge by working with midwives in

the XXX. Midwives will bill for services provided and will be a minimal additional liability insurance

expense.

XXX Midwifery Practice will be a premier site in that the practice will offer a unique experience

that improves access to perinatal care. The practice will improve pregnancy outcomes within the

disparate population by referring patients to public health services (i.e. Public Health Nursing, XXX, etc.).

This practice will offer a unique educational opportunity to a variety of students, and create a one of a

kind continuity service within the XXX Departments of Family Medicine and Pediatrics.

Midwives will build caseloads of patients to deliver at XXX. The vast resources of XXX will

expedite the development of a sound practice infrastructure including marketing, communications, and

contracts with outreach sites.

XXX Midwifery Practice offers both a private and public health focus in that care delivered will

be the highest quality of women’s health services available. This practice will utilize midwives prepared

at the master’s level. The midwives will also obtain a faculty appointment with XXX College of Medicine

as Voluntary Clinical Instructor, College of Nursing as Voluntary Clinical Faculty, first assistant for

cesarean sections, collaborate with public health organizations, develop a solid referral system with

health and human service providers, and collaborate with private physicians at XXX. The midwives will

be employed by XXX and be licensed in YOUR state, must also maintain membership in American College

of Nurse Midwives (ACNM) and Your State Association.

Location and Facilities

XXX Midwifery Practice will be strategically looking to draw from the LOCATION in order to

address the population in need of improved access to women’s health care and demonstrated by lowest

percentage of births receiving early prenatal natal care (PNC) and highest percentage of babies born

LBW (see Appendix A). The geographic locations of the targeted population are women who live on the

XXX- Areas in need and zip codes. This area ranges from urban to rural population and will attract

socioeconomically disadvantaged and middle-class women.

Besides drawing from this location, a steady flow of patients will come from YOUR COUNTY.

This includes NEIGHBORING TOWNS. The location of this office will be in the LOCATION OF OFFICE.

Refer to Figure 1.

The startup requirements include the rental of approximately 2500 sq feet office space to be

used by the midwifery practice. A three-year to five-year lease will be anticipated. Renovations will

need to be planned in order to create an office that optimizes patient flow and convenience.

Figure 1 Location of XXX Proposed Midwifery Practice in Relation to Other Providers in Location, Date

INSERT YOUR OWN CENSUS MAP WITH PLOTTED OTHER PROVIDER OFFICES

Company Ownership

This will be a provider based academic midwifery practice with XXX as the employer of the

professional staff with an onsite director, XXX.

Scope of Services

XXX Midwifery Practice will provide full-scope women’s health care to women of all ages by

offering a complete care package. The number of midwives depends upon the volume of deliveries and

patient volume in the outpatient sites. The perceived national benchmark for CNM staffing ratios is 8-10

deliveries per clinical midwife full time employees (FTE) per month. By year four, this practice should

meet this goal. An initial team of two full-time midwives, including the director, for the start-up practice

will serve XXX. This initial team will build the patient caseload and care for patients in the primary

outpatient office. Midwife staffing levels will be assessed regularly and additional midwives will be

added as the practice grows. Flexibility during the growth periods will be enhanced by the use of prn

(pro re nata - as needed) midwives. In addition, prn coverage for midwife time off will be needed.

Once the practice has demonstrated its ability to recruit patients and has a caseload of over 20

patients due to deliver each month, the first prn midwife will be recruited. A 24/7 in-house model will

provide coverage for deliveries. The aggressive growth occurs when the practice will be delivering 35-40

babies per month. Outpatient coverage at the office will be dependent upon the volume of outpatient

visits. It will be anticipated that a schedule of two midwife providers per day will be easily filled once

the volume of 20-30 births per month has been reached.

All of the patient care will be provided by a midwife. Each midwife will establish his/her own

gynecological patient base, while the obstetrical patients will be shared within the practice. This assures

continuity of care to our patients. In addition to the 24/7 midwifery coverage, there will be a 24/7

medical back up coverage available through collaborative efforts with XXX laborists. The practice

estimates that 10% of women registering for care will risk out to which a solid referral system will be in

place with XXX Department of OB/GYN and MFM faculty.

Centering Pregnancy™ is a group PNC program that will be implemented once the practice

grows. It will be offered to those interested in participating, but will be encouraged to be attended by

all pregnant teens and those with limited support systems. All clinical staff will be trained facilitators to

run the sessions. Please refer to Appendix B for further details.

XXX Midwifery Practice will have access to the XXX system’s support services (nutrition, social

work, substance abuse, etc). This will add assurance that our patients will have coordinated care within

the same medical system. With the addition of XXX electronic medical record system (EMR),

coordinated care will be more efficient (see Appendix C).

Down-stream revenue from referrals will result over time as the midwives refer complicated OB

and GYN patients to the XXX physician’s practice and to XXX. In addition, referrals to pediatric

practitioners for every baby born in the practice will help expand the pediatric caseload for pediatric

practices in the community. Referral to Family Medicine providers for pediatric and primary care will

contribute to the success of this new practice.

Management Systems

XXX Midwifery Practice will initially have two FTE midwives, two receptionists, two Registered

Nurses (RNs), and a director that is included in the two FTE midwives. The staff midwife and director

will be exempt staff and paid a predetermined salary. The receptionists and RNs will be non-exempt

staff and will be paid hourly wages. All staff will earn fringe benefits. As the practice grows, additional

midwives, RNs, medical assistants, and receptionists will be added.

The practice director, XXX, comes with the experience and knowledge of midwifery care XXX –

add qualifying skills here.

All staff and providers will be expected to continue to improve their skills and knowledge base.

All staff will be expected to complete all mandatory UMU trainings and updated trainings. Midwives will

be expected to fulfill continuing education requirements that pertain to the practice of midwifery

and/or women’s health.

Information Management and Technology

In order to comply with HIPPA and improve efficiency of billing, the practice will use a secured,

networked, EMR, also used by XXX. Using this system will allow for continuity of care with other

disciplines i.e., MFM, social work, nutritional services, medicine, etc.

EMR

XXX Midwifery Practice will utilize XXX EMR system in order to secure the success and efficiency

of the office. EMR technology will increase the systematic approach for each patient and improve

continuity of care. A benefit of the EMR will be an increase in revenues by allowing more patients to be

seen without working harder or longer as with paper charting. Collections will be improved through

optimized coding, management of referral and eligibility date, and tracking of managed care contracts.

EMR will reduce transcription costs, data analysis costs, paper shortage and access costs, staff costs, and

paper/forms costs. Risk will be reduced with the improvement of the quality of documentation,

maintaining security and integrity of patient data, safe check system with medication interactions,

allows for analysis of payor relationships, and will be compliant with the documentation and coding

laws. Tracking of patients, protocols, indicators, and recalls will improve the quality improvement of our

practice.

Billing

XXX Midwifery Practice will utilize XXX, a Management Services Organization utilized by XXX

Department of OB/GYN, as an outside billing agency. This will allow the midwifery practice to focus

primarily on patient care. XXX will use electronic claim billing and filing, which in turn will allow us to

utilize the benefits of electronic claim filing, i.e. faster payment for processing insurance claims, while at

the same time allowing us to maximize valuable clinic time and work force.

Financial Plan

XXX Midwifery Practice will need to rely on seed money for the first two years or until the

practice breaks-even. Projected losses for the first two years will be expected, but anticipate breaking

even in year three. It is anticipated that the practice will expand enrollment to XX New OB’s and XX

Established OBs per month by the end of 20XX (year four) and the maturation of these enrolled patients

to delivery would result in XX deliveries per month by mid-20XX. Developing sound referral networks

will insure the successful growth of the practice. On-going analysis of outpatient volume and deliveries

will be critical to monitor profitability of the practice. Table 1 describes the anticipated growth of

patient type by year and anticipated deliveries. Table 2 discusses the anticipated expenses, revenues,

and surplus/deficits for the first five years, including the start-up costs.

Table 1 Patient Growth by Type and Year

OB GYN

Total

Patients Total Deliveries

Year 1

Year 2

Year 3

Year 4

Year 5

Table 2 Anticipated Yearly Expenses, Revenues, and Surplus/Deficits

Years

Expenses

Revenues

Surplus/Deficit

Start up Costs

$XX

Year 1

$XX

-$XX

Year 2

$XX

-$XX

Year 3

$XX

Year 4

$XX

Year 5

$XX

An anticipated mix of insurances (XX% private, XX% public) will ensure that in three years, the

practice will break even and in five years be self-sustaining. With the advancement of XXX billing

system, efficient and quicker returns will be generated. For those patients who participate in public

insurance, the staff will offer assistance in completing any application forms in a timely manner to

assure adequate coverage during the pregnancy and post partum, and newborn care. These efforts will

be coordinated with the LHD to create a position of outreach and onsite referral programs from public

health agencies.

Payments according to procedure codes and patient growth are detailed in Appendix D. It will

be anticipated that a fast growth will occur in year two, three, and four. Year five will continue to show

growth, but at a slower pace.

Five Year Plan

Start-up

Objectives

1. Finalize seed funding through XXX.

2. Secure office space and leasing details.

3. Educate both lay and professional community members, regarding midwifery care as an

alternative to traditional women’s health care and address misconceptions of associated

with midwifery care starting early summer 20XX. This will be accomplished through

outreaches

and speaking engagements targeting populations that will benefit most by this

service through multiple marketing avenues.

4. Use XXX to assist in the recruiting of midwives and staff by early spring 20XX.

5. Two months prior, begin scheduling patients for the first day of operations.

6. Credential midwives (hospital and insurance) hired before the start of operations.

Costs

The estimated start-up expenses will be $XX. This sum includes the planning, marketing,

purchase of medical equipment, medical supplies, office furniture and equipment, office supplies, EMR

start up, building renovation, and rent. Marketing will be the most important expense during the six

months prior to the day of operations at $XX. Marketing efforts will be focused on educating the

community about midwifery care and the

proposed practice (Table 3). Figure 2 breaks down to the percentage of contribution of the Start-up

Costs.

Table 3 Start-up Costs

Start up Costs

Non-Personnel Services

Medical equipment and supplies

$XX

Marketing

$XX

Office furniture/equipment and

supplies

$XX

Rent

$XX

Building renovation

$XX

Total

$XX

Outreaches are systematic attempts to provide services beyond conventional limits.

Figure 2 Categories of Start-up Costs

Table 4 Milestones

Milestone

Date

Budget

Manager

Department

Approval of Business

Plan by Hospital

1/1/2012

OB/GYN/hospital

Sign lease with

Landlord

2 to 4 mos

prior to

opening

OB/GYN

Design and place first

ads

Feb 2012

OB/GYN and

Marketing

Begin educational

sessions

Mid-winter

2012

$1,100

OB/GYN

Sign contracts with

XXX for billing,

scheduling, and

recruiting

4 to 6 mos

prior to

opening

OB/GYN

Place first ads to

recruit midwives

4 mos prior to

opening

OB/GYN

Place ads for RN

3 mos prior to

opening

$600

OB/GYN

Begin scheduling

patients

2 mos prior to

opening

OB/GYN

New Employee

Training

1 mo prior to

opening

Human Resources

Computer and phone

line set up

1 mo prior to

opening

OB/GYN, Hospital

Open house

1 day prior to

opening

$1,500

OB/GYN

Begin first

appointment

Early summer

of 2012

OB/GYN

Year One

Objectives

1. Anticipate XX deliveries by end of year one and a total OB/GYN patient base of XX GYN and

XX OB patients.

2. Midwives will be appointed to the College of Medicine and College of Nursing.

3. Partner with XXX to coordinate public health referrals for those in need.

Costs

For the first year of service, the anticipated personnel costs will total $XX and non-personnel

costs will total $XX. The total costs will be $XX. Marketing efforts will continue to be a necessity and

consume a large part of the non-personnel budget at $XX. See Table 5.

Table 5 Year One Budget

Personnel Services

Annual Budget

1 Midwives annual salary

$XX

Director annual salary

$XX

Office Manager

$XX

2 RN annual salary

$XX

2 Receptionists annual salary

$XX

Sub Total

$XXX

CNM Fringe with @39%

$XX

Director Fringe RF @ 43%

$XX

Staff Fringe RF @ 43%

$XX

Personnel Total

$XXX

Non-Personnel Services

Malpractice Insurance (annually)

$XX

Overhead (telephone, pagers)

$XX

EPIC transactions per CNM per Year

$XX

EPIC transactions, Director per year

$XX

Marketing

$XX

Rent (per year)

$XX

Office supplies

$XX

Medical supplies (≤ $500/item)

$XX

Non-Personal Services Total

$XX

Total Personnel and Non-Personnel Costs

$XX

Revenues

The practice will anticipate XXX obstetrical (OB) patients and XXX gynecological patients, before

a 10% transfer or risk out rate. Of the XX patients, XX will deliver in the first year (see Appendix E). Look

to Appendix D for a breakdown of anticipated CPT codes, RVU’s, and the average reimbursement rates

for a XX% public and XX% private payor mix. The midwifery practice will estimate revenues to be $XX,

which puts the practice at a deficit of $XX. Seed money will support the difference. See Figure 3.

Figure 3 Year One Expenses and Revenues

Year Two

Objectives

1. Patient growth is expected at XXX%.

2. Anticipate a patient base of XXX OB patients and XXX GYN patients with XXX deliveries.

3. Consider acceptance of students of all disciplines for clinical rotation and field placement.

4. Begin Centering Pregnancy™/Parenting program

How to Successfully Integrate Midwives into Your Practice | Appendix 4

Appendix 4: Sample Business Plan

Costs

For the year two of service, the anticipated personnel costs will total $XX due to the need for

more staff. The non-personnel costs will total $XX. The total costs will be $XX. Look to Appendix D for a

breakdown of anticipated CPT codes, RVU’s, and the average reimbursement rates for a XX% public and

XXX% private payor mix. See Table 6.

Table 6 Year Two Budget

Personnel Services with 3% COLA for exempt

Annual Budget

2 Midwives annual salary

$XX

Director annual salary

$XX

Office Manager

$XX

2 RNs annual salary

$XX

1 MAs annual salary

$XX

2 Receptionists annual salary

$XX

CNM Fringe @39%

$XX

Director Fringe RF @ 43%

$XX

Staff Fringe RF @43%

$XX

Personnel Total

$XX

Non-Personnel Services

Medical supplies (≤ $500/item)

$XX

Office supplies

$XX

Rent (per year)

$XX

Malpractice Insurance (annually)

$XX

Overhead (telephone, pagers)

$XX

Marketing

$XX

EPIC transactions per CNM per Year

$XX

EPIC transactions, Director per year

$XX

Non-Personnel Services Total

$XX

Total Personnel and Non-Personnel Expenses

$XX

Revenues

The practice will anticipate a XX% growth in year two. The patient breakdown will be XXX

obstetrical (OB) patients and XXX gynecological patients, before a 10% transfer or risk out rate. Of the

XXX patients, approximately XX of OB patients will deliver in year two, increasing the revenues from year

one by XX%. Look to Appendix D for a breakdown of anticipated CPT codes, RVU’s, and the average

reimbursement rates for a XX% public and XX% private payor mix. The midwifery practice will estimate

revenues to be $XX, which puts the practice at a deficit of $XX. Seed money will support the difference.

See Figure 4.

Figure 4 Year Two Expenses and Revenues

Year Three

Objectives

1. Patient growth is expected at XX%.

2. Anticipate a patient base of XXX OB patients and XXX GYN patients with XXX deliveries.

3. Increase the number of midwives to four and employ additional support staff (1-MA and 1-

RN).

4. Coordinated efforts with local universities to conduct research.

5. Contract with XXX to be a clinical site field placement for student nurse midwives.

Costs

For the year three of service, the anticipated personnel costs will total $XX and non-personnel

costs will total $XX. The total costs will be $XX. See Table 7.

Table 7 Year Three Budget

Personnel Services with 3% COLA for exempt

Annual

Budget

3 Midwives annual salary

$XX

Director annual salary

$XX

Office Manager

$XX

3 RNs annual salary

$XX

2 MAs annual salary

$XX

3 Receptionists annual salary

$XX

CNM Fringe with @39%

$XX

Director Fringe RF @ 44%

$XX

Staff Fringe RF @44%

$XX

Personnel Total

$XX

Non-Personnel Services

Medical supplies (≤ $500/item)

$XX

Office supplies

$XX

Rent (per year)

$XX

Malpractice Insurance (annually)

$XX

Overhead (telephone, heat, water, gas, pagers)

$XX

Marketing

$XX

EPIC transactions per CNM per Year

$XX

EPIC transactions, Director per year

$XX

Non-Personnel Services Total

$XX

Total Personnel and Non-Personnel Expenses

$XX

Revenues

The practice will anticipate a XX% growth in year three. The patient breakdown will be XXX

obstetrical (OB) patients and XXX gynecological patients, before a 10% transfer or risk out rate. Of the

XXX patients, approximately XXX of OB patients will deliver in year three, increasing the revenues. Look

to Appendix D for a breakdown of anticipated CPT codes, RVU’s, and the average reimbursement rates

for a XX% public and XX% private payor mix. The midwifery practice will estimate revenues to be $XX

anticipating a profit of $XX. The practice will be self-sustaining. See Figure 5.

Figure 5 Year Three Expenses and Revenues

Year Four

Objectives

1. Patient growth is expected at XX%.

2. Anticipate a patient base of XXX OB patients and XXX GYN patients with XXX deliveries.

3. Continue to cultivate academic and referral relationships.

Costs

For the year four of service, the anticipated personnel costs will total $XX and non-personnel

costs will total $XX. The total costs will be $XX. See Table 8.

Table 8 Year Four Budget

Personnel Services with 3% COLA for exempt

Annual

Budget

4 Midwives annual salary

$XX

Director annual salary

$XX

Office Manager

$XX

4 RNs annual salary

$XX

3 MAs annual salary

$XX

3 Receptionists annual salary

$XX

CNM Fringe with @39%

$XX

Director Fringe RF @ 43%

$XX

Staff Fringe RF @43%

$XX

Personnel Total

$XX

Non-Personnel Services

Medical supplies (≤ $500/item)

$XX

Office supplies

$XX

Rent

$XX

Malpractice Insurance (annually)

$XX

Overhead (telephone, heat, water, gas, pagers)

$XX

Marketing

$XX

EPIC transactions per CNM per Year

$XX

EPIC transactions, Director per year

$XX

Non-Personnel Services Total

$XX

Total Personnel and Non-Personnel Expenses

$XX

Revenues

The practice will anticipate a XX% growth in year four. The patient breakdown will be XXX

obstetrical (OB) patients and XXX gynecological patients, before a 10% transfer or risk out rate. Of the

XXX patients, approximately XXX of OB patients will deliver in year four, increasing the revenues. Look

to Appendix D for a breakdown of anticipated CPT codes, RVU’s, and the average reimbursement rates

for a XX% public and XX% private payor mix. The midwifery practice will estimate revenues to be $XX

anticipating a profit of $XX. See Figure 6.

Figure 6 Year Four Expenses and Revenues

Year Five

Objectives

1. Patient growth is expected at XX%.

2. Anticipate a patient base of XXX OB patients and 877 GYN patients with XXX deliveries.

3. Increase midwives to six and employ one additional LPN and receptionist.

4. Expect to be self-sustaining.

5. Begin the development of a midwifery-training program.

Costs

For the year five of service, the anticipated personnel costs will total $XX and non-personnel

costs will total $XX. The total costs will be $XX. See Table 9.

Table 9 Year Five Budget

Personnel Services with 3% COLA for exempt

Annual

Budget

5 Midwives annual salary

$XX

Director annual salary

$XX

Office Manager

$XX

5 RNs annual salary

$XX

3 MAs annual salary

$XX

4 Receptionists annual salary

$XX

CNM Fringe with @39%

$XX

Director Fringe RF @ 45%

$XX

Staff Fringe RF @45%

$XX

Personnel Total

$XX

Non-Personnel Services

Medical supplies (≤ $500/item)

$XX

Office supplies

$XX

Rent

$XX

Malpractice Insurance (annually)

$XX

Overhead (telephone, heat, water, gas, pagers)

$XX

Marketing

$XX

EPIC transactions per CNM per Year

$XX

EPIC transactions, Director per year

$XX

Non-Personnel Services Total

$XX

Total Personnel and Non-Personnel Expenses

$XX

Revenues

The practice will anticipate a XX% growth in year five. The patient breakdown will be XXX

obstetrical (OB) patients and XXX gynecological patients, before a 10% transfer or risk out rate. Of the

XXX patients, approximately, XXX of OB patients will deliver in year five, increasing the revenues. Look

to Appendix D for a breakdown of anticipated CPT codes, RVU’s, and the average reimbursement rates

for a XX% public and XX% private payor mix. The midwifery practice will estimate revenues to be $XX

anticipating a profit of $XX. See Figure 7.

Figure 7 Year Five Expenses and Revenue

Figures 8 and 9 provide a visualization of five year anticipated patient mix of OB or GYN and the

anticipated deliveries in five years.

Figure 8 Five Year Anticipated Patient Types/Growth

Figure 9 Five Year Anticipated Deliveries

Market Analysis Summary

According to U.S. Census Bureau (2010), XXX% of women who reside in YOUR County are of

childbearing age (15-44). The YOUR CITY area has multiple opportunities for strategic partnerships to

enhance rapid practice growth. This population of patients will positively respond to a practice with

midwifery care and a supportive caring environment. Potential community partners to enhance rapid

growth of underserved and Medicaid patients include:

 YOUR PERINATAL OUTREACH

 Family Planning Service

 LOCAL Health Department PRENATAL PROGRAM

In addition, targeting patients with private insurance who are seeking a “high-touch” experience

associated with a tertiary care setting will be a balance to the payor mix of the practice. Contract

negotiations between XXX and private payors to add midwifery care to the existing contracts is a critical

first step.

Market Segmentation

Consumers

With nearly XX% of the population in YOUR County in 20XX comprising of women, there will be

an advantage to developing an alternative women’s health service. The advantage is to offer access to

an alternative option to traditional allopathic women’s health care. The practice will target women 15

and older who are interested in alternative women’s health care. The mean age of this community is

40; therefore, the practice will be very capable of providing routine gynecological, family planning,

perimenopausal, and postmenopausal care. One of the biggest strategies will be to educate the women

of YOUR County on the services midwives provide and disprove the myths associated with midwifery

care. The practice will strive to provide a unique experience that will cater to women by offering a

prime location that is convenient to access, a quality experience with each patient visit that includes

“high touch” concept that addresses each patients need, and modern technology to provide information

understandable by women with low levels of health literacy.

Competition

There are currently XX OB/GYN practices and XX private midwife practice that are affiliated with

YOUR HOSPITAL. XX out of the XX accept GYN patients only, while the other four provide OB/GYN

services. XX of these practices employ midwives. The solo midwife is also affiliated with HOSPITAL,

located XX miles away in TOWN. XX practices are located in TOWN (XX miles); XX in the STREE/TOWN

(Xmiles) and the XX practice is located TOWN STREET (Xmiles). See Appendix F.

Target Market Segment Strategy

XXX Midwifery Practice will locate and focus its efforts on the western side of YOUR County

population. Our segmentation strategy is geographic for the reasons of: the urban, suburban, and rural

patients of this area are in need of alternative women’s health care that addresses the individual needs

and the access to care problem; the expected growth of the local population has been projected that a

few suburban towns will increase in population by XX6%.

Service Business Analysis

XX Midwifery Practice will be part of a larger medical industry. It will be associated with an

academic center, a community hospital, a high-risk obstetrical center, a hospital-based women’s health

resident clinic, a faculty generalist OB/GYN private practice, HOSPITAL private OB/GYN providers, and a

faculty family practice group. Private OB/GYN practices in YOUR County are numerous and generally

smaller (XXX providers).

According to the Census Bureau, there are nearly XXX women near the office (ZIP CODE),

suggesting an excellent patient-midwife ratio based on the number of midwives as well. With the

limited number of surrounding OB/GYN provider practices, these statistics are favorable for patient

growth.

Competition and Buying Patterns

In general, competition among midwives and OB/GYN practices in YOUR County and the

surrounding area is small. With projected growth in population of XX%, a XX% in annual pregnancies will

continue to be expected, and the limited number of women’s health providers, this practice creates a

great potential for meeting patient load goals in year three.

Marketing Strategy

The first strategy for a successful start will be based on the development of collateral materials

such as a practice brochure, which must be developed quickly. A web site will be a very important tool

for targeting all women and a link to the ACNM midwife locator engine should be established

immediately. A comprehensive marketing and communications plan will be one of the priorities during

the first few weeks that the Director is on-board. This strategy will quickly create a high profile, logo,

“look”, name recognition, and understanding of midwifery care within the community through public

speaking, networking, promotional events, and printed advertising. These marketing tools will be

followed up with a sales strategy that relies on a pleasant and accessible location, well-trained, highly

motivated employees, and a commitment to provide the best care and patient experiences possible in

every interaction. An innovative component of this program will be the linking of this midwifery

practice to public health programs, such as XXX. The advantage of this strategy is that every element of

it is within our control.

XXX Midwifery Practice will have a competitive edge based on an alternative option to women’s

health care, location, quality of care, availability to patients, 24/7 inpatient coverage, quality time spent

with each patient, focus on individual needs and providing education and support, strong social supports

and referral for those in need of additional services, pleasant staff and office environment. All of these

factors will result in high level of patient satisfaction and high self-referral rates.

In conjunction with XX Marketing Department, a momentum will be created approximately

three months prior to actual start of business to get the name and the kind of services offered

recognized. Along with this, extensive education will be provided to the community and professionals

addressing myths associated with midwives and the benefits of midwifery care.

Marketing Materials

To accomplish a visible presence, the practice will offer written materials that promote

midwifery care and the office location that is simple to read coupled with a professional and polished

look and feel. The information will include facts regarding midwifery care, roles of midwives in the

obstetrical community, biographical information, location, photos, as well as other promotional

materials. This will be available for our patients as well as potential patients.

The practice will provide multiple educational brochures from ACNM and American College of

Obstetricians and Gynecologists (ACOG). In addition, patient information handouts will be available via

Department of OB/GYN website.

Besides patient friendly written brochures and handouts (English and Spanish), there will be a

number of videos, mailings, and other materials used to promote the medical office and medical

information. This will include magazine/newspaper advertisements, movie theaters, buses, and bus

shelters, commercial announcements on the radio and television, billboards, as well as other advertising

avenues for getting the word out.

Marketing Expenses

Media Utilized / Associated Costs of the Media Budgeted Funds

Media

Budgeted Funds

Print and Social Media

Bus / Bus Shelters

$XXX (for 3 months)

Billboards

$XXX (for 2-3 months)

Print Advertising

$XXX (for 3 months)

Movie

$XXX (10 weeks, $XXX/mo.)

Radio

$XXX

$XXX (flyers/brochures/posters)

Agency News Letters

XXX

WIC Tribune

March Of Dimes

Upstate

Blog , Update,

Announcements website,

Seminar Series, HOSPITAL Family Resource

Center, Physician’s Practice Magazine

Food for Outreach visits to Organizations

11 organizations @ $100per site

Website Advertisement

Business Finder

Healthcare Directories

Facebook

Twitter

$XXX

Total

$XXX

Sales Strategy

The practice will offer incentives to the patients to serve as small mementos for each delivering

patient as well advertisement of the practice. This may include monogrammed bags, Onsies, pens,

coffee mugs, water bottles, stationary, etc. The marketing team will research this for comparative

pricing and quality of products once the practice is operating.

Approximately four months prior to opening, the major marketing activities will begin. These

activities will be in collaboration with the Marking Department at XXX and the lead agent will be XXX.

She will assist the Director in connecting with the most important marketing avenues. In addition, XXX

will assist with placing ads for midwifery positions and setting up interviews.

Approximately two months prior to opening the practice will begin scheduling patients to be

seen on the opening day. An arrangement will be made to have a receptionist available to operate the

telephone to schedule appointments through the Department of OB/GYN at XXX.

Once operations are commenced, emphasis in advertising will continue for the next year and

will continue to use the XXX Marketing advantage until second to third year of business, which by then

our word of mouth will take over as our main source of referrals, thus reducing the costs of advertising.

All pricing for visits and procedures will be billed according to industry standards and monitored

by the Department of OB/GYN and XXX. The practice will contract with the major private insurance

carriers (Excellus, MVP, Aetna, United Health Care, and POMCO, etc) in our area and public insurance

programs (Medicaid, Medicaid Managed Care, Medicare, etc).

Keys to Success

The keys to a successful midwifery practice will rely on patient satisfaction, the staff and office

organization, and the marketing and sales of midwifery care.

Patients

• Educate patients on the importance of preventative care and regular check-ups

• Stress the importance of follow-up care through a recall system to remind patients of their

appointments

• Focus on women’s health needs

• Alternative option in women’s health care

• Convenience of office location

Staff and Office Organization

• Unique, state of the art model that includes Centering Pregnancy™, continuity component,

teen focus, relationship with local colleges and universities to perform credible research,

and XXX

• Recognize that office staff is as crucial in the success of the business

• Progressive atmosphere

Finances

• Keep a low overhead

• Use EPIC for the latest and most accurate billing practices

• Optimize the number of patients we see in an hour while providing quality midwifery care

Marketing and Sales

• Aggressively market and create a presence in the community by catering to hospitals,

perinatal outreach programs, community organizations, schools, colleges, universities,

popular media avenues, and much more.

• Network with XXX OB/GYN, MFM faculty, Family Medicine and Primary Care providers,

Family Planning Service, and XXX for referral relationship

• Location in an area with a low women’s health services

• Located close to XXX

Appendices

APPENDIX A

ZIP CODES WITH THE LOWEST PERCENTAGE OF BIRTHS RECEIVING EARLY PNC IN YOUR COUNTY

ZIP CODES WITH THE HIGHEST PERCENTAGE OF BABYS WITH LBW

IN YOUR COUNTY

APPENDIX B

CENTERING MODEL OVERVIEW

Centering is an evidence-based redesign of health care delivery that helps to promote:

• safety,

• efficiency,

• effectiveness,

• timeliness,

• culturally appropriate patient-centered care, and

• more equitable care.

Centering is a model of group healthcare, which incorporates three major components:

assessment, education, and support. Group participants meet with their care provider and other

group participants according to a regular schedule for a much longer period of time (usually 90-120

minutes) than a usual check-up visit. Centering promotes individual health empowerment and

community-building. The 13 Essential Elements of Centering secure these benefits.

At the start of a typical session, patients have a brief individual assessment by the care provider,

participate in self-care activities, complete a Self-Assessment Sheet on a particular topic, enjoy

https://www.centeringhealthcare.org/pages/centering-model/model-overview.php

refreshments, and have informal conversation with the other participants. When the group “circles

up” together, there is facilitated discussion about a heath topic and the exchange of corporate

wisdom on shared health experiences. Groups are lively, interactive, and patient-centered.

Agencies bill for group care in the same way as corresponding individual care visits. Centering

Pregnancy care starts around the beginning of the second trimester and goes through delivery.

Research has shown increased patient and provider satisfaction in Centering groups and improved

patient outcomes.

APPENDIX C

EMR INFO

APPENDIX D

Payments According to Procedure Code, Patient Growth, and RVU by Year

THIS IS AN EXAMPLE

Procedure Code

RVU

Avg

Pmt

Year

99201 - OFFICE

OUTPATIENT VISIT U/A

PG test

111

$33

$1,17

$2,57

150

$4,89

226

$7,339

271

99202 - OFFICE

OUTPATIENT VISIT

423

$54

500

$27,0

1100

$59,5

2090

$113,

060

3135

$169,5

3762

99203 - OFFICE

OUTPATIENT VISIT

130

$82

120

$9,82

264

$21,6

502

$41,0

752

$61,59

903

99204 - OFFICE

OUTPATIENT VISIT

628

$113

$8,14

158

$17,9

301

$34,0

451

$51,08

542

99205 - OFFICE

OUTPATIENT VISIT

$182

$2,18

$4,81

$9,14

$13,71

99211 - OFFICE

OUTPATIENT VISIT

442

$11

$43

$95

$181

$271

99212 - OFFICE

OUTPATIENT VISIT

162

$31

$280

$617

$1,17

$1,759

99213 - OFFICE

OUTPATIENT VISIT

801

$41

$2,92

158

$6,42

301

$12,2

451

$18,31

542

99214 - OFFICE

OUTPATIENT VISIT

123

$55

$492

$1,08

$2,05

$3,083

99215 - OFFICE

OUTPATIENT VISIT

236

$84

0.9

$75

$166

$315

$473

99221 - HOSPITAL

ADMIT, STRAIGHTF

395

$74

$2,22

$5,64

145

$10,7

217

$16,07

260

99222 - HOSPITAL

ADMIT, MODERATE

863

$108

$6,49

132

$14,2

251

$27,1

376

$40,69

451

99223 - HOSPITAL

ADMIT, HIGH COMP

242

$143

$2,14

$11,1

148

$21,1

222

$31,71

266

99231 - SUBSEQUENT

HOSPITAL VISIT

167

$33

$495

$941

$1,411

99232 - SUBSEQUENT

HOSPITAL VISIT

121

$63

$2,84

$3,41

103

$6,48

154

$9,720

185

99233 - SUBSEQUENT

HOSPITAL VISIT

303

$80

13.5

$1,07

$5,59

133

$10,6

200

$15,94

240

99238 - HOSPITAL

DISCHARGE <30 MN

372

$50

$4,51

108

$5,42

205

$10,2

308

$15,44

369

99239 - HOSPITAL

DISCHARGE >30 MN

$44

99384 - PREVENTIVE

VISIT, NEW, 12

$61

$549

$1,20

$2,29

$3,442

99385 - PREVENTIVE

VISIT, NEW, 18

131

$80

$2,88

$6,33

150

$12,0

226

$18,05

271

99386 - PREVENTIVE

VISIT, NEW, 40

$121

40.5

$4,90

$10,7

169

$20,4

254

$30,72

305

99387 - PREVENTIVE

VISIT, NEW, 65

$146

4.5

$657

$1,44

$2,74

$4,120

99394 - PREVENTIVE

VISIT, EST, 12

$31

$256

$486

$729

99395 - PREVENTIVE

VISIT, EST, 18

677

$73

$4,81

125

$9,15

188

$13,73

226

99396 - PREVENTIVE

VISIT EST 40

249

$86

$6,38

141

$12,1

212

$18,19

254

99397 - PREVENTIVE

VISIT, EST, 65

$114

$188

$357

$536

APPENDIX E

Number of Patient Growth Related to Percentage of Growth

Pt Visits Number of Pts % Growth

New OB

New Gyn

Total

Year 2 # Pts XXX%

Est OB

New OB

Est GYN

New GYN

Total

Year 3 # Pts XXX%

Est OB

New OB

Est GYN

New GYN

Total

Year 4 # Pts XXX%

Est OB

New OB

Est GYN

New GYN

Total

Year 5 # Pts XXX%

Est OB

New OB

Est GYN

New GYN

Total

APPENDIX F

Location of XXX Proposed Midwifery Practice in Relation to Other Providers in YOUR County, STATE,

DATE

INSERT MAP

APPENDIX G

Mission/Vision/Philosophy

XXX Midwifery Mission Statement:

The mission of the XXX Midwifery Practice is to provide safe, full scope obstetrical and

gynecological services to women of YOUR County. This care will be provided in an ethical and

humanistic manner with focuses on prevention, safety, and patient satisfaction.

Vision of XXX Midwifery Practice will:

1. Be available to our patients.

2. Be viewed as an alternative to physician care, not a substitute.

3. Function within a system that allows for independent and collaborative practice and

referrals as needed.

4. Provide a focus on the prevention of untoward outcomes through patient participation and

education.

5. Participate in state and national organizations regarding issues affecting the practice of

midwifery.

6. Participate in continuing education, to improve the quality of practice.

XXX Midwifery Philosophy:

XXX Midwifery Practice believes in a comprehensive approach to women’s health. We believe

that the woman and her family should be involved with decisions regarding greater health and well-

being during her care. This will be achieved by creating an environment where the clinical staff educate,

participate in active listening, advise, and support the woman and her family.