# Chebaiywa Clinic Case

Topics: Dentistry, Competition, Hospital Pages: 4 (924 words) Published: November 16, 2011
Question 1:
* Extraction and other services: 40% of all visits
Fillings and root canals: 60% of all visits

* Interest rate 2%
* Total investments: 4.710.000, starts in 2009 (startup, water well) * Positive cashflow start in 2012 till 2021
* Average revenue per patient = 873,8

* Assumptions:
* we did not take time of the different dental procedures into consideration. This is because I thought that the clinic would never get full, so there would never be a bottleneck situation where patients would have to wait that long that they would leave for the competitor. * Furthermore I assumed that more time was needed, that the extra costs was already calculated in the total costs of the particular treatment

* Answer to question 1a: 625 patients per year to break-even

* Question 1B: Since the average amount of people per day coming to a dental clinic in Eldoret is 22, in a radius of 80 km. * The total amount of potential clients per year is 22x365= 8030. * Currently there are 5 dentist active in the surroundings, if you would start a clinic, under perfect competition it would create 8030/6=1338,33 clients per clinic per year. * Since expectation is that Chebaiywa can offer lower prices and since the locals base their decision primarily on price, the amount of 624,32 client per year can be easily reached.

* Question 1C: The amount of patients needed to break-even is not affected by whether there will be more competition or not.

* The cashflows remain the same if the prices remain the same * However if the price needs to be adjusted in order to meet the competition, it is most likely that the amount of clients needed would increase. * The later the competition arises, the better. More time for the clinic to break even Question 2

The best payment alternative is giving patients the possibility to receive more/expanded services by paying a higher fee (e.g. in case: house calls, special access to...