Health Care Financial Management II
Health Care Financial Management II Health Care Financial Management II Health Care Financial Management II Practical Exercise in Sunk Cost Analysis Practical Exercise in Sunk Cost Analysis Practical Exercise in Sunk Cost Analysis Show more Health Care Financial Management II Health Care Financial Management II Health Care Financial Management II Practical Exercise in Sunk Cost Analysis Practical Exercise in Sunk Cost Analysis Practical Exercise in Sunk Cost Analysis On January 1 2007 Mr. DMB CFO for the Warehouse Health System purchased a new CT scan for the radiology department On January 1 2007 Mr. DMB CFO for the Warehouse Health System purchased a new CT scan for the radiology department On January 1 2007 Mr. DMB CFO for the Warehouse Health System purchased a new CT scan for the radiology department On January 1 2007 Mr. DMB CFO for the Warehouse Health System purchased a new CT scan for the radiology department On January 1 2007 Mr. DMB CFO for the Warehouse Health System purchased a new CT scan for the radiology department On January 1 2007 Mr. DMB CFO for the Warehouse Health System purchased a new CT scan for the radiology department On January 1 2007 Mr. DMB CFO for the Warehouse Health System purchased a new CT scan for the radiology department On January 1 2007 Mr. DMB CFO for the Warehouse Health System purchased a new CT scan for the radiology department On January 1 2007 Mr. DMB CFO for the Warehouse Health System purchased a new CT scan for the radiology department after evaluating cost and quality of CT scans from five (5) vendors. The purchase price of the CT scan was $1 million dollars. after evaluating cost and quality of CT scans from five (5) vendors. The purchase price of the CT scan was $1 million dollars. after evaluating cost and quality of CT scans from five (5) vendors. The purchase price of the CT scan was $1 million dollars. after evaluating cost and quality of CT scans from five (5) vendors. The purchase price of the CT scan was $1 million dollars. after evaluating cost and quality of CT scans from five (5) vendors. The purchase price of the CT scan was $1 million dollars. after evaluating cost and quality of CT scans from five (5) vendors. The purchase price of the CT scan was $1 million dollars. after evaluating cost and quality of CT scans from five (5) vendors. The purchase price of the CT scan was $1 million dollars. after evaluating cost and quality of CT scans from five (5) vendors. The purchase price of the CT scan was $1 million dollars. after evaluating cost and quality of CT scans from five (5) vendors. The purchase price of the CT scan was $1 million dollars. The cost per procedure in technical and professional labor and supplies is $650 dollars. The cost per procedure in technical and professional labor and supplies is $650 dollars. The cost per procedure in technical and professional labor and supplies is $650 dollars. The cost per procedure in technical and professional labor and supplies is $650 dollars. The cost per procedure in technical and professional labor and supplies is $650 dollars. The cost per procedure in technical and professional labor and supplies is $650 dollars. On February 1 2007 one of the radiologist on staff informed Mr. DMB of a CT scan that would significantly decrease the On February 1 2007 one of the radiologist on staff informed Mr. DMB of a CT scan that would significantly decrease the On February 1 2007 one of the radiologist on staff informed Mr. DMB of a CT scan that would significantly decrease the On February 1 2007 one of the radiologist on staff informed Mr. DMB of a CT scan that would significantly decrease the On February 1 2007 one of the radiologist on staff informed Mr. DMB of a CT scan that would significantly decrease the On February 1 2007 one of the radiologist on staff informed Mr. DMB of a CT scan that would significantly decrease the On February 1 2007 one of the radiologist on staff informed Mr. DMB of a CT scan that would significantly decrease the On February 1 2007 one of the radiologist on staff informed Mr. DMB of a CT scan that would significantly decrease the On February 1 2007 one of the radiologist on staff informed Mr. DMB of a CT scan that would significantly decrease the cost per procedure to $325 per procedure. The purchase price for CT scan # 2 is $1.1 million dollars. cost per procedure to $325 per procedure. The purchase price for CT scan # 2 is $1.1 million dollars. cost per procedure to $325 per procedure. The purchase price for CT scan # 2 is $1.1 million dollars. cost per procedure to $325 per procedure. The purchase price for CT scan # 2 is $1.1 million dollars. cost per procedure to $325 per procedure. The purchase price for CT scan # 2 is $1.1 million dollars. cost per procedure to $325 per procedure. The purchase price for CT scan # 2 is $1.1 million dollars. cost per procedure to $325 per procedure. The purchase price for CT scan # 2 is $1.1 million dollars. 1) What should Mr. DMB CFO do? Should he purchase CT Scan # 2? 1) What should Mr. DMB CFO do? Should he purchase CT Scan # 2? 1) What should Mr. DMB CFO do? Should he purchase CT Scan # 2? 1) What should Mr. DMB CFO do? Should he purchase CT Scan # 2? 1) What should Mr. DMB CFO do? Should he purchase CT Scan # 2? 2) What additional informantion is needed to make a decision to purchase CT Scan # 2? 2) What additional informantion is needed to make a decision to purchase CT Scan # 2? 2) What additional informantion is needed to make a decision to purchase CT Scan # 2? 2) What additional informantion is needed to make a decision to purchase CT Scan # 2? 2) What additional informantion is needed to make a decision to purchase CT Scan # 2? 2) What additional informantion is needed to make a decision to purchase CT Scan # 2? 3) What could have been done to avoid this situation if at all? 3) What could have been done to avoid this situation if at all? 3) What could have been done to avoid this situation if at all? 3) What could have been done to avoid this situation if at all? 3) What could have been done to avoid this situation if at all? 4) Utilize the speadsheet model to anaylze changes in cost per procedure revenue changes volume changes. 4) Utilize the speadsheet model to anaylze changes in cost per procedure revenue changes volume changes. 4) Utilize the speadsheet model to anaylze changes in cost per procedure revenue changes volume changes. 4) Utilize the speadsheet model to anaylze changes in cost per procedure revenue changes volume changes. 4) Utilize the speadsheet model to anaylze changes in cost per procedure revenue changes volume changes. 4) Utilize the speadsheet model to anaylze changes in cost per procedure revenue changes volume changes. 4) Utilize the speadsheet model to anaylze changes in cost per procedure revenue changes volume changes. 4) Utilize the speadsheet model to anaylze changes in cost per procedure revenue changes volume changes. 5) What suggestions would you provide Mr. DMB if a) he did purchase CT Scan # 2 b) if he did NOT purchase 5) What suggestions would you provide Mr. DMB if a) he did purchase CT Scan # 2 b) if he did NOT purchase 5) What suggestions would you provide Mr. DMB if a) he did purchase CT Scan # 2 b) if he did NOT purchase 5) What suggestions would you provide Mr. DMB if a) he did purchase CT Scan # 2 b) if he did NOT purchase 5) What suggestions would you provide Mr. DMB if a) he did purchase CT Scan # 2 b) if he did NOT purchase 5) What suggestions would you provide Mr. DMB if a) he did purchase CT Scan # 2 b) if he did NOT purchase 5) What suggestions would you provide Mr. DMB if a) he did purchase CT Scan # 2 b) if he did NOT purchase 5) What suggestions would you provide Mr. DMB if a) he did purchase CT Scan # 2 b) if he did NOT purchase CT Scan # 2? CT Scan # 2? Assume the volume is projected to cap at 5000 procedures. Assume the volume is projected to cap at 5000 procedures. Assume the volume is projected to cap at 5000 procedures. Assume the volume is projected to cap at 5000 procedures. Janaury 1 2007 February 1 2007 CT Scan # 1 CT Scan # 2 Initial Cost ($1000000) ($1100000) Volume: # of procedures Volume: # of procedures 5000 5000 cost per procedure cost per procedure $650 $325 Total Variable Cost Total Variable Cost $3250000 $1625000 Net Revenue per procedure Net Revenue per procedure $1000 $1000 Net Revenue Net Revenue $5000000 $5000000 Net profit without fixed cost Net profit without fixed cost $1750000 $3375000 Add Back Initial Cost Add Back Initial Cost ($1000000) ($1100000) Profit $750000 $2275000 Show less
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