School of Commerce

Project management Department

Project identification Analysis and Appraisal of

Cardiac clinic

Submitted to
Dr. Mengistu B (Phd.)

Prepared by:
1. Rutha Tadesse
2. Samrawit Tesfaye
3. Tizita Goytabe
4. Wuletaw Ayele
5. ZelalemGebreyesus

September, 2019
Table of Contents
Acknowledgements..............................................................................................................................iii
Abbreviations.......................................................................................................................................iv
Executive summary...............................................................................................................................v
Chapter One: Project Identification..................................................................................................1
1. INTRODUCTION............................................................................................................................1
2. PROJECT SELECTION PROCESS.................................................................................................1
Project Rating Index..............................................................................................................................2
Chapter Two :Market and Demand Analysis...................................................................................4
2.0 Introduction.................................................................................................................................4
2.1 Market Trends......................................................................................................................4:
2.2 Our Target Market.................................................................................................................5
2.3 Our Competitive Advantage........................................................................................................6
2.4 SALES AND MARKETING STRATEGY...........................................................................6
2.5 Marketing Strategy and Sales Strategy..................................................................................6
Chapter Three:Technical Analysis....................................................................................................8
3.1 INTRODUCTION.......................................................................................................................8
3.2 Materials and inputs....................................................................................................................8
3.2.4 Environmental impacts of using these materials.................................................................10
3.2.5 Utilities...............................................................................................................................11
3.3. Locations and Site Selection....................................................................................................11
3.3.1 Location selection..............................................................................................................11
3.3.2 Site selection...............................................................................................................11
3.4. Structure and Civil Works........................................................................................................12
Chapter Four :Financial Analysis of Projects.................................................................................14
4.1 Introduction...............................................................................................................................14
4.2 Technical Aspects of Financial Analysis...................................................................................14
4.2.1 Projection of cash inflows and outflows of the project.......................................................15
4.2.2 Profit and Loss Projection (5-Year)....................................................................................15
4.2.3 Cash Flows (5-Year)..........................................................................................................16
4.2.4 Breakeven Analysis............................................................................................................17
4.2.5 Payback Period...................................................................................................................17
Chapter Five: Human Resource and Organization........................................................................18

ii
 5.1 Introduction...............................................................................................................................18
5.2 Organizational Structure............................................................................................................19
5.3 Organizational function and requirement..................................................................................20
5.4. Staffing plan, Job Description and Orientations.......................................................................21
5.5. Continuing Staff Education......................................................................................................21
Chapter Six: Economic Analysis of Projects...................................................................................22
5.1 Introduction...............................................................................................................................22
5.2 Detail Analysis..........................................................................................................................22
Chapter Seven :Project Appraisal...................................................................................................24

iii
 Acknowledgements

We would like to express our gratitude to the staffs of St Paul hospitalswho were willing

toshare their experiences with us and take part in the studies. We would also like to thank

staffs within Cardiac Rehabilitation centers of Black lion hospitals for their unreserved

support.

iv
Abbreviations

ACS Acute Coronary Syndrome

ACSLT Acute Coronary Syndrome with Low Troponin

BBB Bund le Branch B lock

BMI BodyMass Index

BP Blood Pressure

CR Cardiac Rehabilitation

CVD Cardiovascular Disease

ECG Electrocardiograph

FT Fibrinolytic Therapy,

WHOWorld HealthOrganization

v
 Executive summary

In the last few decades, developing countries have been undergoing an epidemiological
transition in which the causes of morbidity and mortality are shifting from primarily
communicable to primarily non-communicable diseases, including cardiovascular
diseases.Ethiopia is the second most populous country and one of the fastest growing
economies in Africa. However, there are few hospital on the spectrum of cardiovascular
diseases addressing just one or two segments of this important problem. The strategic
objectives of this project are to provide a much higher efficiency, sustainable quality (of
healthcare provision) respecting the principles of flexibility, so that the integrated facilities
and services will be able to respond to changes in demographic development and
epidemiology at increased economies of scale and economies of scope.

In Ethiopia health complications related to cardiovascular, especially for the urban

communities, is becoming the major health threat. This threat is mostly manifested with
obesity, high blood pressure, dyslipidemia, heart diseases and diabetes. The truth is that the
demand for cardiologist services has steadily grown over the last five years, as healthcare
reform legislation broadened insurance coverage and the plummeting unemployment rate
increased disposable income. No doubt the heart failure clinic line of business will continue
to grow and become more profitable because the aging baby-boomer generation in Ethiopia
are expected to drive demand for heart failure related care services.

Access to highly skilled workforce, proximity to key markets and ability to quickly adopt
new technology are part of our competitive advantages that we will be bringing to the table.
All the materials and equipment’s will be obtained through purchasing from the local market
and through international bidding process. Project activities will mainly support soft
interventions aimed at systemic improvements to health service delivery. No major
environmental impacts are attributed to any of the project interventions and thus further
environmental assessment will not be warranted.

vi
The company's location, Mexico, Addis Ababa is very favorable, providing high visibility,
medium traffic, and transport accessible. . Accordingly, the rent that will accounted for in
this project will be the same to other areas of the city.The house will be obtained by renting
but partition and minor structure adjustment performed by the project.The payback period of
the original investment will be one year and 11 months.

Cumulative net profits in excess of 7,000,000 birr over a five-year period, and average
monthly sales of 4,234,000, while maintaining adequate levels of liquidity. The Cardiac
clinic will be a private-run start-up business dedicated to providing excellent quality health
service to the residents of Addis Ababa, in a manner that generates fair and equitable returns
for present and future owners, and superior value to our customers.

Investing on prevention, screening, and early management of cardiac disease will help
mitigate the upward pressure on the country health budget and adverse effect on household
welfare and economic growth. The share of non-communicable disease in aggregate in
Ethiopia has risen from 52 percent in 2016 to 77 percent in 2017 and the total number
attributable to non-communicable disease has increased by 40 percent during this period.
This trend poses a significant cost to the economy in general and household economic status,
in particular.

In our experience, a team of twenty multi-skilled employees’ works best for our kind of
business. Working as a team is critical to our success. We recognize that human resources are
most valuable asset. Our personnel strategy will focuses on selecting, training, rewarding,
and stimulating all employees in order to build employee loyalty, and increase performance.

The overall risk of the project is rated substantial given that there are three project risks that
are also rated substantial by the Systematic Operations Risks-Rating Tool. The project is
appraised by the group members for budget allocation by the concerned bodies.

vii
viii
 Chapter One

Project Identification

1. INTRODUCTION
Projects have a major role to play in the economic development of a country. Since the
introduction of planning in our economy , we have been investing large amount of money in
projects related to industry, minerals, power, transportation, irrigation, education etc. with a
view to improve the socio-economic conditions of the people.

These projects are designed with the aim of efficient management, earning adequate return to
provide for future development with their own resources. But experience shows that there are
several shortcomings in the ultimate success of achieving the objectives of the proposed
project.

2. PROJECT SELECTION PROCESS

Identification of a new project is a complex problem. Project selection process starts with the
generation of project ideas. In order to select the most promising project, the entrepreneur
needs to generate a few ideas about the possible project one can undertake. The project ideas
as a process of identification of a project begins with an analytical survey of the economy
(also known as pre-investment surveys). The surveys and studies will give us ideas. This
project identification may be broadly divided into four stages,

1. conceptual stage:
At this stage the group members have generated ideas about different project related
to health, construction, manufacturing and Agricultural sector. Based on this the
followings eight project ideas were forwarded by the group members:
A. Reduction of poverty through integrated practices
B. Manufacturing of IT equipment’s
C. Health care services to vulnerable communities
D. Cardiac Clinics
E. Rehabilitation center for Drug users
F. Construction of market infrastructures

1
 G. Quality education for school aged girls
H. Development of Integrated logistics services
2. screening stages:
The group members discussed on each and every ideas generated in the above stage
and unviable ideas were eliminated. Consequently, the first five project ideas were
selected.
3. identification stage :
Identification is only the beginning in the lifecycle of a project. Having identified the
prospective projects, the details of each project will have to be worked out and
analyzed in order to determine which of them could be reckoned as suitable for
inclusion in the plan, allocate funds and put into execution.

Project Rating Index

The group used project rating index for section process and accordingly the group
members identify the following factors relevant for project rating and assigned
weights to these factors based on its relative importance.

Input availability, Technical know-how, Reasonableness of cost, Adequacy of

market, Complementary relationship with other products, Consistency with
governmental priorities, sustainability and Beneficiary interest

The group used a 5-point scale for rating the project proposal on the above listed
factors and then for each factor, multiply the factor rating with the factor weight to
get the factor score and at the end we used the summation of all the factor scores to
get the overall project rating index

5 – Very good 2- Poor

4- Good 1- Very poor

3 – Average

2
 Project 1 Project 2 Project 3 Project 4 Project 5
   

Factor FW FS FS FS FS FS
Factor Factor Factor Factor Factor
     
    5 4 3 2 1   5 4 3 2 1   5 4 3 2 1   5 4 3 2 1   5 4 3 2 1  
Input availability 0.25   4       1   4       1       2   0.5 5         1.25         1 0.25
Technical know-how 0.1   4       0.4   4 3     0.7       2   0.2 5         0.5   4       0.4
Reasonableness of 0.05     3     0.15         1 0.05     3     0.15   4       0.2   4       0.2
cost
Adequacy of market 0.15     3     0.45         1 0.15   4       0.6   4       0.6 5         0.75
Complementary 0.05       2   0.1       2   0.1   4       0.2   4       0.2     3     0.15
relationship with
other projects
Sustainability 0.1         1 0.1       2   0.2     3     0.3 5         0.5     3     0.3
Consistency with 0.1         1 0.1       2   0.2     3     0.3     3     0.3         1 0.1
governmental
priorities
Beneficiary interest 0.2         1 0.2       2   0.4       2   0.4     3     0.6       2   0.4
 Total Score            
2.5 2.8 2.65 4.15 2.55

Based on the project rating index, Project – 4 is selected (Cardiac Clinics)

3
 Chapter Two

Market and Demand Analysis

2.0 Introduction
The development of hospital health care provision has recorded a great leap in recent years. This
has mainly been caused by the progressive introduction of new highly specialized diagnostic and
therapeutic procedures, introduction of a comprehensive electronisation of hospitals and
improved process management. In context of this development, hospitals in Ethiopia are run with
a relatively low level of productivity, mainly due to their outdated infrastructure and poor
logistics arrangements

The strategic objectives of this project are to provide a much higher efficiency (more output
while maintaining cost levels), sustainable quality (of healthcare provision) respecting the
principles of flexibility, so that the integrated facilities and services will be able to respond to
changes in demographic development and epidemiology at increased economies of scale and
economies of scope.

2.1 Market Trends

In the last few decades, developing countries have been undergoing an epidemiological transition
in which the causes of morbidity and mortality are shifting from primarily communicable to
primarily non-communicable diseases, including cardiovascular diseases.Ethiopia is the second
most populous country and one of the fastest growing economies in Africa. However, there are
few hospital on the spectrum of cardiovascular diseases addressing just one or two segments of
this important problem.

Cardiovascular diseases (a group of disorders of the heart and blood vessels) were mainly
considered the problem of the developed world just a few decades back. However, currently,
reports suggest that it is becoming a primary health concern for middle and low income
countries. The reports show that the proportion for the epidemic in developing countries already
accounts for almost 10% of the cases and it is likely to become the developing world’s leading
cause of death. According to World Health Organization (WHO), if the current trend continues,
by 2015, 20 million people will die because of cardiovascular disease.
Unbalanced nutrition reduced physical activities and tobacco and alcohol consumption are
among the behaviors most commonly associated with the increased risk of cardiovascular
disease. In Ethiopia health complications related to cardiovascular, especially for the urban
communities, is becoming the major health threat. This threat is mostly manifested with obesity,
high blood pressure, dyslipidemia, heart diseases and diabetes. 

4
Healthcare reforms have expanded the pool of clients able to take advantage of industry services.
The industry has benefited from substantial growth in the number of Ethiopians and changing
Ethiopian demographics will drive the use of physician services. External factors such as the
number of people with medical care services from organizations and nongovernmental
organizations funding forhealth care in the Cardiologists industry impact business performance

Other notable trends in this business is that heart failure clinics are expected to perform well due
to the inelastic demand for their services, and the majority of heart failure patients are covered
their costs by themselves and by other donors. With the aid of technology, it is becoming easier
to manage heart related ailments that before now are not easy to handle.

This business has recently begun consolidating due to pressures of healthcare reform. The truth
is that the demand for cardiologist services has steadily grown over the last five years, as
healthcare reform legislation broadened insurance coverage and the plummeting unemployment
rate increased disposable income.

One thing about this industry is that labor costs are on the high side. Again, heart failure clinics
have faced nurse and physician shortages and have struggled to recruit qualified personnel.
Industry profitability has generally risen over the past five years due to increases in service
prices.

No doubt the heart failure clinic line of business will continue to grow and become more
profitable because the aging baby-boomer generation in Ethiopia are expected to drive demand
for heart failure related care services.

2.2 Our Target Market

Our plans to service a wide range of patients in and around Addis Ababa and from different
regions. We will ensure that we target both self – pay customers and those who have health
insurance cover from different government and non-government organizations.

The fact that we will open our doors to a wide range of customers does not in any way stop us
from abiding by the rules and regulations governing the industry. Our staff will be well – trained
to effectively service our customers and give them value for their monies.

Our customers can be categorized into the following;

 The whole residents within in Addis Ababa where our heart failure clinic is located
 Peoples from different regions within Ethiopia
 Medical tourists from other neighboring countries
 Different INGO and GO

5
2.3 Our Competitive Advantage

Apart from the competition that exists amongst various heart failure clinics, they also compete
against other healthcare services providers like general hospitals, teaching hospitals and health
centers that also provide treatment for heart related ailments.

Access to highly skilled workforce, proximity to key markets and ability to quickly adopt new
technology are part of our competitive advantages that we will be bringing to the table.

Our heart failure clinic facility will well position (centrally positioned) and visible, wewill have
enough parking space with good security. Our employees will be trained to provide customized
customer service to all our patients. Our services will be carried out by highly trained
cardiologists and other healthcare professionals.

We are going to be one of the few heart failure clinics in the whole of Addis that will run 24
hours a day and 7 days a week. We will have enough workers that are ready to run a shift system.

Lastly, all our employees will be well taken care of, and their welfare package will be among the
best within our category. It will enable them to be more than willing to build the business with us
and help deliver our set goals and achieve all our business aims and objectives.

2.4 SALES AND MARKETING STRATEGY

2.4.1. Sources of Income

The Clinic will ensure that we will do all we can to maximize the business by generating income
from every legal means within the scope of our industry. Below are the sources we intend
exploring to generate income for:

 Heart problem diagnosis

 Heart disease prevention and treatment
 Cardiac catheterization
 Pacemaker insertion and management
 Clinic follow-ups with telephone monitoring
 Educational programs on nutrition, exercise and medications
 Office-based infusions by trained nurses

2.5 Marketing Strategy and Sales Strategy

The marketing and sales strategy adopted will be based on generating long-term personalized
relationships with customers (patients). In order to achieve that, we will ensure that we offer top

6
notch heart failure related health care services at affordable prices compared to what is
obtainable in Ethiopia.

Our employees will be well trained to provide excellent services. We know that if we are
consistent with offering high quality services and excellent customer service, we will increase
the number of our customers by more than 25 percent for the first year and then more than 35
percent subsequently.

The clinic will adopt the following sales and marketing approach to win customers over;

 Introduce our heart failure clinic and the services we offer by sending introductory letters
to health management organizations, medical insurance companies, etc
 Advertise our heart failure clinic in community based newspapers, local TV and local
radio stations
 Engage in direct marketing
 Enter into business partnership with health management organizations, sports clubs,
government agencies and health insurance companies.

2.6 Our Pricing Strategy

We will ensure that all our services are offered at highly competitive prices compared to what is
obtainable in Addis Ababa. The payment policy adopted by will be inclusive because we are
quite aware that different customers prefer different payment options as it suits them.

7
 Chapter Three

Technical Analysis
3.1 INTRODUCTION

The success of an enterprise depends upon the entrepreneur doing the right thing at the right
time. Starting a new venture is a very challenging and rewarding task. A businessman has to take
numerous decisions, right from the conception of a business idea, upon the start of production.
Hence, the identification of the project to be undertaken,requires an analysis of the project in
depth. Therefore, a technical analysis of the project has to be undertaken.An important aspect of
technical appraisal is concerned with defining the materials and inputs required, specifying their
properties in some detail, and setting up their supply programme. There is an intimate
relationship between the study of materials and inputs and other aspects of project formulation,
particularly those concerned with location, technology, and equipment.

3.2 Materials and inputs

An important aspect of technical appraisal is concerned with defining the materials and inputs
required, specifying their properties in some detail, and setting up their supply programme.

3.2.1 Materials Required

1. The clinic required the following Equipment’s & instruments:

a) Diagnostic equipment’s:

o Cardiology Stethoscope, o Reflex hammer

o Ophthalmoscope, o Tuning fork,
o Sphygmomanometer, o Hand lens,
o Tape meter, o Otoscope,
o Thermometer,

b) Weighing scales for adults,

c) Height Measurement,

d) X-ray viewer,

e) Examination couch,

f) Examination light,

g) Standard 12 lead EKG machine,

8
 h) Echocardiography facility,

2. Equipment’s for Emergency/ observation room:

a) Resuscitation couches #2, g) X-Ray viewer,

b) Cupboards and shelves, h) Resuscitation set: Ambu bag,

c) Wheelchair and patient i)Resuscitation trolleys,

d) Defibrillator, j) Glucometer,

e) ECK machine, k) Oxygen source,

f) Cardiac Monitor, l)O2 face mask/ Nasal prongs/

3. Equipment for Stress test room:

a) Holter monitors (24 hour ambulatory EKG),

b) Pulse oximeter,

c) Resuscitation set on trolley,

d) Defibrillator,

e) Thread mill,

f) Couch,

4. Emergency medicines

3.2.2 Sources of materials

All the materials and equipment’s will be obtained through purchasing from the local market and
through international bidding process.

3.2.3 Cost of Materials

No Material Quantity Unit Cost Total cost

(birr)
1 Cardiology Stethoscope, 1 80,150.00 160,300.00
2 Ophthalmoscope 1 134,231.0 134,231.00
0
3 Sphygmomanometer 2 50,000.00 100,000.00
4 Tape meter 20 350.00 700.00
5 Thermometer 50 500.00 25,000.00
6 Reflex hammer 5 250.00 2250.00

9
7 Hand lens, 12 500.00 6000.00
8 Tuning fork, 30 100.00 3000.00
9 Otoscope 10 1100.00 11000.00
10 Weighing scales for adults, 5 5000.00 25,000.00
11 Height Measurement, 5 200.00 1000.00
12 X-ray viewer, 1 1,000,000 500,000.00
13 Examination couch, 2 84,000.00 168,000.00
14 Examination light, 8 500.00 4000,00
15 Standard 12 lead EKG 1 2,000,000 1,000,000.00
17 Echocardiography facility 1 250,000.0 250,000.00
0
18 Resuscitation couches 2 100,000.0 200,000.00
0
19 Cupboards and shelves, 4 2,5000.00 10,000.00
20 Wheelchair and patient 10 1200.00 12,000.00
21 Defibrillator, 2 230,000.0 460,000.00
0
22 ECK machine, 1 520,000.0 520,000.00
0
23 Cardiac Monitor, 1 800,000.0 300,000.00
0
25 Resuscitation set: Ambu bag, 2 24,000.00 48,000.00
26 Resuscitation trolleys, 2 3500.00 7,000.00
27 Glucometer, 9 2500.00 22,500.00
28 Oxygen source, 2 450,000.0 900,000.00
0
29 O2 face mask/ Nasal prongs/ 15 200.00 3,000.00
30 Holter monitors (24 hour ambulatory EKG), 1 150,000.0 150,000.00
0
31 Pulse oximeter, 2 15,000.00 30,000.00
32 Resuscitation set on trolley, 2 100,000.0 200,000.00
0
33 Defibrillator, 1 82,000.00 82,000.00
34 Thread mill, 1 14,000.00 14,000.00
35 Couch, 1 2300.00 2,300.00
Total 5,347,281.00

3.2.4 Environmental impacts of using these materials

None of the project components will finance physical investments, such as the construction of
new infrastructure and/or the rehabilitation of existing infrastructure. Project activities will
mainly support soft interventions aimed at systemic improvements to health service delivery. No

10
major environmental impacts are attributed to any of the project interventions and thus further
environmental assessment will not be warranted.

The project will make the people and their surroundings a positive contribution to the
achievement of environmentally sustainable development. The project includeprogrammes for
human resource development and methods development which, in a health and medical context,
relate to environmentally sustainable development. Theproject include education and training
and contribute to a greater understanding of the prevention and solution of environment-related
problems and promote sustainable development in an inter-sectorial perspective. The project
provide knowledge on the environment and the importance of environmental effects on health in
any other ways.The project will take factors which affect the environment into consideration in
connection with the building of clinics (Waste disposal and sewage disposal etc.)

The project will contribute to or counteract the pollution of surface water or groundwater, air or
land through hospital waste, dumping of medicines, chemicals etc. The project entail the risk that
chemicals or medicines can be unintentionally spread outside the project area, by air, water or
via food chains, through their use, or through poor storage conditions or inadequate facilities for
the destruction of waste products.

3.2.5 Utilities
The clinic requires installation of 320 voltage of electricity and water supplies and
telecommunications for smooth functioning of the different machineries installed in the clinics.

3.3. Locations and Site Selection

3.3.1 Location selection
Location choice is made from a wide geographic area within which several alternative sites may
have to be considered.

Factor Weight Addis Bahir Hawas Weight score

Ababa dar a Addis Bahir Hawas
Ababa dar a
Availability of 0.4 5 3 2 2.0 1.2 0.8
professional
Availability of 0.2 4 4 2 0.8 0.8 0.4
public transportation
Infrastructure 0.3 4 3 3 1.2 0.9 0.9
Availability
Proximity to other 0.1 5 3 4 0.5 0.3 0.4
hospitals
Total 4.5 3.2 2.5

From different cities with in the country Addis Ababa is selected for the project location and it
scored a result of 4.5 according to the criteria selected by the group.

11
3.3.2 Site selection

Once the location or alternative locations are decided upon, a specific project site or alternative
sites should be defined. The feasibility study should analyze and assess alternative sites on the
basis of key aspects and site specific requirements

Factor Weight Megenag Piasa Mexico Weight score

na Megenag Piasa Mexico
na
Availability of 0.4 2 3 5 0.8 1.2 2.0
professional
Availability of public 0.2 4 4 3 0.8 0.8 0.6
transportation
Infrastructure 0.3 3 3 4 0.9 0.9 1.2
Availability
Proximity to other 0.1 4 3 5 0.4 0.3 0.5
hospitals
Total score 2.9 4.2 4.3

The company's location, Mexico, Addis Ababa is very favorable, providing high visibility,
medium traffic, and transport accessible. . Accordingly, the rent that willaccounted for in this
projectwill be the same to other areas of the city.

The clinic will be located just minutes from the main bus stations from different regions. There
are different buildings options for renting in the selected location. Other advantages of the
chosen location include:

o Plenty of parking, garages, and additional storage area available

o Excellent central location with easy access to major destinations, freeways
andother transportation means
o Different laboratories and government hospitals
o High profile area with easy access from all parts of town
o All utilities required for operating a clinic are available

3.4. Structure and Civil Works

The house will be obtained by renting but partition and minor structure adjustment performed by
the project.

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Required Quant Area
Reception, Recording & Waiting area 1 30 sq. m
Examination room(s) 1 20 sq. m
Emergency & resuscitation room 1 50 sq.m
Treatment/ procedure room 1 20 sq. m
Laboratory room, 2 30 sq. m
X-Ray room(s), 5 As per ERPA standards
US/ Echocardiography room, 1 20 sq. m
Stress test Room (can be shared) 1 20 sq. m
Store room for medical supplies 1 12 sq. m
General purpose room 1 12 sq. m
Toilet room(male & female) 2 8 sq. m
Incinerator (fixed), 1 10sq. m
Total 150sq. m

The clinic will utilize 150 square m. The market rent in this high profile area is between birr
500.00 and birr 7500.00 per square foot per month. We have estimated birr 100,000 monthly rent
expense.

13
 Chapter Four

Financial Analysis of Projects

4.1 Introduction
Financial analysis is defined as the process of discovering economic fact s about an enterprise
and/or a project on the basis of an interpretation of financial data. Financial analysis also seeks to
look at the capital cost operations cost and operating revenue. The analysis decisively establishes
a relationship between the various f actors of a project and helps in maneuvering the project's
activities. It also serves as a common measure of value for obtaining a clear-cut understanding
about the project from the financial point of view.

4.2 Technical Aspects of Financial Analysis

Start-up expenses
The start-up expenditures for cardiac clinic is summarized below:

Startup Expenses

Sources of Capital

Investment requirement 7,347,281.00

Total Investment 7,347,281.00

Startup Expenses

Personnel 700,000

Capital Expenditures 5,347,281

Consulting Services 90,000

14
Promotion 100,000

Laboratory Reagent 400,000

Utility expenses 100,000

Total Start-up Expenses 6,737,281

4.2.1 Projection of cash inflows and outflows of the project

Revenue Forecast (5 - Year):
Year 1 Year 2 Year 3 Year 4 Year 5
Examination 1,150,00 1.500,000
2,000,00 2,100,000 2,200,000
Laboratory service 750,000 1,000,000
0 1,500,000 1,500,000
Surgery 1,500,00 1,750,001,250,00 2,000,000 2,000,00
0
1,750,00
3,400,000 4,250,0000 5,000,00 5,600,00 5,700,000
0

4.2.2Profit and Loss Projection (5-Year)

Year 1 Year 2 Year 3 Year 4 Year 5
Revenue (Sales)
Service sales 3,400,000 4,250,0000 5,000,00 5,600,000 5,770,000
Sales of cardiac instruments 40,000 1,000,000 0 1,100,000 1,00,000
Total Revenue (Sales) 3,440,000 5,250,000 1,000,00 6,700,00 6,770,000
0
Operating Expenses 6,060,00
0
Personnel 700,000 800,000 1,000,000 1,00,000
Capital Expenditures 5,347,281 200,000 350,000 350,000
Consulting Services 90,000 120,000 150,000 150,000
Promotion 100,000 100,000 900,000 100,000 100,000
Laboratory Reagent 400,000 500,000 250,000 600,000 700,000
Utility expenses 100,000 100,000 120,000 200,000 200,000
Total Start-up Expenses 6,737,281 1,820,00 100,000 2,350,000 2,350,000
600,000
Profit Before Taxes -3,293,281 523,281 100,000 4,350,000 4,420,000
2,070,00
Tax (35%) 0 183,148 0 1,522,500 1,547,000

3,990,00
0

15
 1,396,50
0
Net Profit 0 340,132 2,593,50 2,827,500 2,873,000
0

4.2.3Cash Flows (5-Year)

Year 1 Year 2 Year 3 Year 4 Year 5
Cash Received
Cash from Operations
Cash Sales
Cash from Receivables
3,440,000 5,250,000 6,060,000 6,700,00 6,770,000
0 0 0 0 0
Subtotal Cash from Operations
3,440,000 5,250,000 6,060,000 6,700,000 6,770,000

Additional Cash Received

New Borrowing 100,000 0 0 0 0
New Other Liabilities (interest- 0 0 0 0 0
free) New Long-term Liabilities 0 0 0 0 0
0 0 0 0 0
Sales of Other Current Assets
0 0 0 0 0
Sales of Long-term Assets 0 0 0 0 0
New Investment Received 0
Subtotal Cash Received
3,540,000 5,250,000 6,060,000 6,700,000 6,770,000

Expenditures
Expenditures from Operations
Personnel
Capital Expenditures 700,000 800,000 900,000 1,000,000 1,00,000
90,000 120,000 120,000 150,000 150,000
Consulting Services
100,000 100,000 100,000 100,000 100,000
Promotion 400,000 500,000 600,000 600,000 700,000
Laboratory Reagent 100,000 100,000 100,000 200,000 200,000

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Utility expenses
Total Start-up Expenses 1.390,000 1,620,00 1,820,000 2,000,000 2,0000,000

Additional Cash Spent

Taxes
Principal Repayment of Borrowing 0 183,148 1,396,500 1,522,500 1,547,000
Other Liabilities Principal 0 0 0 0 0
Repayment 0 0 0 0 0
Long-term Liabilities Principal 0 0 0 0 0
Repayment 0 0 0 0 0
Purchase Other Current Assets 0 0 0 0 0
Purchase Long-term Assets 5,347,281 200,000 250,000 350,000 350,000
Dividends 0 0 0 0 0
Subtotal Cash Spent 5,347,281 383,148 1,646,500 1,872,500 1,897,000

Net Cash Flow -1,807,281 4,866,852 4,413,500 4,827,500 4,87300

Cash Balance -1,807,281 3,059,571 7,473,071 12,300,571 17,173,571

4.2.4Breakeven Analysis

Breakeven Analysis

Variable Costs
Personnel 10.00%
Consulting services 3.00%

Fixed Costs
Personnel 700,000
Capital Expenditures 5,347,281
Consulting Services 90,000
Promotion 100,000
Laboratory Reagent 400,000

Total Fixed Costs 6,737,281

Total Variable Costs 13%

Breakeven Sales level = 6,738,155

4.2.5Payback Period
Payback period is the number of years required to return the original investment from the net
cash flows (net operating income after taxes plus depreciation).Shorter payback period is
preferred commonly used as a first screening method

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If payback < acceptable time limit, accept project

If payback > acceptable time limit, reject project

Based on the analysis of Cash inflows and cash outflows of the project, the payback period will
be one year and 11 months.

Chapter Five
Human Resource and Organization
5.1 Introduction
The successful implementation and operation of an industrial project needs different categories
of human resources such as management & staff with sufficient skills and experience. Therefore,
the feasibility study should identify and describe such requirements and assess the availability of
human resources as well as the training needs. The human resource issue reflects the need to
bolster our capabilities to match our positioning.

The cardiac clinics will have the following staff:

No Professionals Number of professionals

1 Cardiologist 3
2 Internist (Optional) 1
3 GP (optional) 1
4 Radiographer 1
5 Nurses 4
6 ECG and stress test trained/ experienced nurse 1
7 Laboratory technologist 1
8 Laboratory technician 1
9 Cleaner 2
10 Reception 1
11 Accountant 2
12 Security 2
13 Total 20

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In our experience, a team of twenty multi-skilled employees’ works best for our kind of
business.Working as a team is critical to our success. We recognize that humanresources are
most valuable asset. Our personnel strategy will focuses on selecting, training, rewarding, and
stimulating all employees in order to build employee loyalty, and increase performance.

It will be easy to find and select the best new members of our team. The health universities, well
strengthen in the area, along with international professionals, have contributed to the formation
and growth of many skilled employees. In theselection process, the background check is a must
in this line of the sector of cardiac.

As our clinic will be open Monday through Saturday from 11:00 AM to 8:00 PM, the team of
twenty can operate effectively only by using alternative work schedules that take into account the
busiest periods of the day.

In addition to salaries, important bonuses and incentives will be included in the personnel table
that will be used to reward employee performance, on a pay-for-performance basis. The
cornerstone of our personnel plan will to maximize productivity and minimize labor burden of
the company's operating expenses, while maintaining strong employee commitment to the
success of operations.

Trying to appropriate compensation incentives to our company's performance targets,increases

the likelihood that these goals will be achieved. Our performance-based pay strategy takes into
consideration the linking of employee compensation to the achievement of measurable business
targets. Employees that perform well are eligible for various types of performance-based pay,
such as cash bonuses, awards, profit-sharing plan, and stock option program.

The ultimate goal of all our employees is to meet or exceed our customers' expectations. We
willempowered to take any reasonable action to avoid a customer leaving our premises
dissatisfied.

Our continuous improvement policy will encourages all employees to continually look for ways
to keep updated with the latest technology, to improve processes, reduce costs and save time.
This approach serves the goal of reducing costs and delivery times, and increasing the service
quality and customer satisfaction.

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5.2 Organizational Structure
Organizational structure reveals vertical operational responsibilities & horizontal linkages &
represented by organizational chart. The structure of an organization will determine the modes in
which it operates and performs. The organizational structure of the clinics will be as follows:

Medical Director

HR Manager

Finance Manger

Cardiologist GP Radiographer Internist

Nurse Laboratory technician

Cleaner Security guards

The all experts required by the clinics are available with in the country at a large extent and
therefore the clinics will not face any problem related to human resource.

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5.3 Organizational function and requirement
The cardiac clinic shall have a responsible person who organizes & carries out the major
functions of Human Resource Management (HRM). The cardiac clinic shall make sure the clinic
& each service unit shall maintain asufficient number of staff with the qualifications, training
and skills during regularworking hours as per this standard. The cardiac clinic shall ensure that
all health professionals recruited & working arelicensed as per the registration and licensing
requirement of the appropriate organ.

Each person who is involved in the performance of duties involving directpatient care shall have
an occupational health screening prior to entering active status and once every five (5) years
thereafter. A health professional shall not conduct health examination for himself/ herself. The
cardiac clinic shall keep on file the medical checkup reports of all staff and shall make available
during inspection by the appropriate organ. Each person who is involved in direct patient care
and who has been absent from duty because of an illness that is communicable & required to be
reported to the MOH shall, prior to returning to duty, obtain certification from a physician or
other qualified healthprofessional, as provided for in the specialty clinic's policies, that he or she
may return to duty without apparent danger of transmitting the cause of the illness to any patient.

The cardiac clinic shall regularly follow the immunization status of all employees and all other
persons who routinely come in contact with patients or patient areas against selected
communicable disease. Immunizations shall be in accordance with current guidelines developed
by the MOH. The specialty clinic shall update the employment record for all staff. The record
shall contain to a minimum: copy of license or information on credentials, health examination.
(fitness for duty), work history, current job description, and evidence of orientation, in- service
education / training and copies of annual evaluation.

5.4. Staffing plan, Job Description and Orientations

The specialty clinic shall avail as a minimum the staff requirements stated above. All staff in the
cardiac clinic shall be provided with written current job descriptions that detail the roles and
responsibilities and be oriented to their specific jobs at appointment by unit head or CCO.
Organizational and administrative structure of the specialty clinic shall be posted in a visible
place and orientation to all staff working in the clinic shall be provided by the clinic

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management. Orientation on specialty clinic policies, including environmental safety programs,
infection control, and quality improvement shall be provided.

5.5. Continuing Staff Education

The specialty clinic shall ensure and facilitate that its staffs receive training in order to perform
assigned job responsibilities. The professional working in the specialty clinic shall receive
ongoing Continuing Professional Development (CPD) or continuous medical education (CME)
to maintain &update or advance his/ her skills and knowledge.

Chapter Six
Economic Analysis of Projects
5.1 Introduction
Economic appraisal aims at assessing the economic viability of a project from the point of view
of the economy as a whole and determining whether the implementation of the project improves
a country’s net economic welfare. When a project is financially feasible, investors and financial
institutions would be willing to finance and undertake the project. When the government is
deciding about implementing a project, that decision is made based on whether the project is
economically viable. Even if the project is financially bad, government may support it through
the budget if it is economically viable.

5.2 Detail Analysis

Investing on prevention, screening, and early management of cardiac disease will help mitigate
the upward pressure on the country health budget and adverse effect on household welfare and
economic growth. The share of non-communicable disease in aggregate in Ethiopia has risen
from 52 percent in 2016 to 77 percent in 2017 and the total number attributable to non-
communicable disease has increased by 40 percent during this period. This trend poses a
significant cost to the economy in general and household economic status, in particular.

Cardiac disease related disability reduces labor force participation of the working-age
population, their productivity and savings, ultimately affecting economic growth. Rising
Cardiacs and the subsequent burden on the health system would result in patients incurring more
of the incremental cost of care. Two facts substantiate this claim. First, Cardiac treatment is in
general expensive (requiring emergency care and hospitalization) and recurring in nature.
Second, owing to Ethiopia low public health expenditure and the country’s tight fiscal space, the
cost of rising prevalence of NCDs will inevitably be borne by patients. This higher OOP

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payment will have implications on welfare through reducing nonmedical development
expenditures and investments (including educational and nutritional spending).

The project will improve efficiency in two ways: through the focus on prevention and early
detection of cardiac diseases rather than treatment after complications and through encouraging
utilization of care at PMCIs that are arguably cheaper than utilization at specialist-level hospitals.
Bypassing the primary care center and visiting higher-level facilities for detection and
management of chronic cardiac case is inefficient because both labor and capital costs are much
higher at this level.

The project attempts to change this through incentivizing spending more on primary and
secondary prevention of cardiac disease (through early detection and effective management of
cardiac case) at lower levels of care.

The cardiac disease-specific interventions that are explicitly incentivized are also cost-effective
as per global evidence drawn from the Disease Control Priorities project (see Horton et al.
2017)and other international studies (for example, Goldie et al. 2005).Reorganizing the cardiac
clinic system and making it responsive to the needs of the population will benefit the poor more
than the better-off.

The strengthening of primary care in Ethiopia is not expected to create unmanageable budgetary
liabilities. There are several salient points to be made here. First, to a significant extent whatis
required is a redeployment of both supply capacity and demand from the secondary level to the
primary business facilities, resulting in a change in the proper utilization patterns of cardiac
clinicslevel, to free up space at the higher level for more complex services (and in anticipation of
the increaseddemand at all levels by a rapidly aging population). To the extent this occurs, the
aggregate budget would not be affected. Second, one of the goals of cardiac clinic strengthening
is precisely to enhance efficiency, by reorienting care toward lower (and therefore less costly)
levels of the system. Third, about half of health spending is on human resources, and because the
capacity of the medical education system imposes a constraint on the inflow of new medical
professionals to the health system, there is a natural brake on the rate of increase in the system’s
largest single cost item. Of course, the question of human resource availability may raise other
concerns, but from the narrow budget sustainability perspective it should be reassuring. Fourth,
because the prevailing method of paying providers is input-based (line item budgets and
salaries), increases in demand for care do not automatically result in higher spending, as would
be the case if output-based funding such as fee-for-service was the norm (as in many other
countries).

To be sure, Ethiopian health system will require a significantly larger budget over the medium to
long term, not only to address the more advanced health care needs of an aging population but
also to address systemic issues such as low salaries/compensation of medical professionals.

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However significant increases in the health budget are currently constrained by the overall fiscal
environment (particularly low tax revenues)and the budget share allocated to health.

In summary, the factors noted here suggest that strengthening cardiac clinics facilities will not
impose an undue burden on the budget. To illustrate this, various costing scenarios were
conducted during project preparation.

The estimated incremental cost of the cardiac clinics and primary clinics strengthening strategy
is a small fraction of the MoH’s budget, making it feasible to be embraced in the ministry’s
regular budget, especially given prospects of economic growth. Strengthening the cardiac clinic
and PHC system involvesmaintainingminimum standards in human resources, equipment, drugs,
and involves costs of staff training and maintaining personal health records. To analyze the
budgetary and fiscal implications of the proposed strategy, a macro-level incremental cost of the
major cost components is estimated under different scenarios. These cost components include
human resource, medical supplies/drugs, equipment, training costs, and medical records.

Chapter Seven
Project Appraisal

7.1 Introduction
Project appraisal is the process of assessing and questioning proposals before resources are
committed. It is an essential tool for effective decision on projects.

7.2 Overall Risk Rating and Explanation of Key Risks

The overall risk of the project is rated substantial given that there are three project risks that are
also rated Substantial by the Systematic Operations Risks-Rating Tool:

(a) Political and governance,

(b) Stakeholders, and

(c) Technical design.

Substantial political and governance risk is due to the highly contentious nature of reorganizing
the health sector generally and particularly in the country environment. Reforms initiated under
the Government can become politicized easily and can be blocked by important and powerful
stakeholders. To mitigate the political and governance risk, the team conducted a stakeholder

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analysis to identify key stakeholders, assess their position and relative influence on adoption and
implementation of the proposed cardiac clinic reorganization, and develop strategies.

Substantial stakeholder risk reflects the wide range of stakeholders participated on the business
including the government health institute, international organizations and others.

The nature of the technical risk is based on the ambitious nature of the project and the need
toensure that the clinic receives timely and quality technical support during the implementation
of the project. During the project preparation, this risk will mitigated through good technical
contributions from national and international experts in the design of the project and making sure
that good international experience will adapted to the country context.

The need to enhance institutional technical capacity will be addressed through capacity-building
support financed by the project which will give toobtain new knowledge aboutinnovations and
standards in people-centered health care.

7.3 Sustainability

The project has a great chance of sustainability because the project will implement clear business
leadership and business ownership for the cardiac clinic Different reports showed that there is a
great need of cardiac clinics in the country. In addition, the Government’s current National
Health Policy GTP II, its five-year national health master plan, highlight the importance of
reorganizing the primary-level curative institutions. These high-level commitments are crucial
for the sustainability of the project.

The sustainability of the project is enhanced by the thorough consultative process followed in the
preparation of the envisaged people-centered Cardiac clinic system. The clinic will establish
acoordination mechanism to harmonize planned technical and investment support to the clinics
system strengthening. The project will focus on building capacities and systems further enhance
the sustainability of the interventions under this project. Through process the project incentivizes
the establishment of standards, protocols, and systems, including better information management
that facilitates evidence- based decision making.

7.4 Conclusions

The group members concluded that the project is feasible from financial, environmental and
economic perspectives.

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