Simulation Review Hcs/405

According to exhibit # 2, in order to break even annually, the clinic will have to cover the total operating expenses of $690,000. That means that the clinic will have to perform 986 scan per year, or approximately 4 scans per day to achieve this goal. Considering that the equipment in the clinic is capable of much more, this operation should have no problem in reaching and exceeding its goal daily if proper measures are put into place.

Purchasing new MRI scanners for the hospital is a good idea for the hospital because although expensive for the first time purchase, the maintenance issues will be less. Any product reused or refurbished automatically requires more maintenance. The only time a refurbished item is very good in comparison to the average life span of a new one is if all of the mechanics have been completely replaced with brand new pieces and the body of the machine is the only thing refurbished but that would be very unlikely. Maintenance costs is what will be cut over time and in the end the hospital will be happy that they purchased new medical machinery. It ensures that the machine will do the job correctly the first time around and doctors have more accurate results for patients.

The cost of Medical equipment plays a significant role in the delivery of health care. The clinical engineering at Victoria Hospital is an important branch of the hospital team management that are working to strategies ways to improve quality of service and lower cost repairs of equipments. The team members from Biomedical and maintenance engineering’s roles are to ensure utilization of quality equipments such as endoscope and minimize length of repair time. All these issues are a major influence in the hospital’s project cost. For example, Victory hospital, which is located in Canada, is in the process of evaluating different options to decrease cost of its endoscope repair. This equipment is use in the endoscopy department for

This charge is also another revenue stream for the hospital and contributes to the ROI of the equipment. GE, which is the manufacturer of the equipment, indicates that the equipment has a viable life span of up to 15 years, but the warranty only covers the first 6 years of use (Price, 2011). The above figures are a clear indication that the MRI equipment can provide the hospital with an adequate return on investment. These figures, the machine’s lifespan, and the growing demand for MRI scans serve to justify the purchase of the equipment. Other factors that enhance the returns from the equipment include:

Because this is the case, the Net Income effect of this decision has be the biggest factor to consider and an operating lease structure would therefore appeal to investors the most.

When considering requests such as a new piece of equipment, staff training, and supplies for the unit, a manager must consider the overall budget, constraints, and variances. If equipment has a useful life of more than one year and exceeds the minimum cost level of the facility, the manager may request the cost originates from the capital budget of the facility (Yoder-Wise, 2012). Large equipment such as a patient lift, which costs $3000 per lift, would be beneficial to the staff and

After twenty years the true allocation facility cost for the Dialysis Center should be zero, since the facility would be paid off and should have only minimal allocating facility costs such as opportunity costs and costs of using the center. If after the twenty years the building is not occupied it can be used from other medical centers or it could be rented out or sold. It is difficult to try to determine the opportunity costs for space occupied by all activities. The current system of facility allocation assigns equal opportunity cost across all activities and services and avoids the problem inherited in the new method.

Some other factors of operation to look at are scan times. There will be a significant amount of time saved when using this new piece of technology. As we know, time is money in any business and the amount of time saved will be viable in contributing to more income in other departments. Another point to look at is the enhanced imaging quality. So many times we are losing time and money on poor image results with our current machine. The quality of enhanced

16. What would the pre-tax lease payment have to be for you to be indifferent between leasing or buying?

Due to the technological advances in the medical industry, the clinic has decided on advanced medical equipment to provide quality care to the patients. The equipment that will be purchased is a High- Speed CT Scanner, X-Ray Machine, and an Ultrasound Machine. This equipment will allow more quick and efficient test and treatment. The options that can be made include: buying new or refurbished equipment with an option of a loan, acquiring on capital or operating lease. During this phase, I chose the most cost effective option to acquire the equipment. To acquire the equipment, I chose the operating lease. Since there are always potential advances in technology, buying the equipment may not be a good idea. In the long term, the equipment that was purchased will likely be replaced by newer technology in a few years. Due to the decisions of acquiring new equipment, the clinic is now doing well and the profits are growing which allowed growth for the clinic.

The first and for most important question is; how much money does the company have. Is the company capable to pay a large sum upfront for the equipment or only small payments each month?

The first expense I will start with is the expense that is considered the overhead costs. There are no overhead costs because your company has a vacant building that will be perfect for housing the MRI machine. The next expense will be the purchase price of the MRI machine which is two million five hundred thousand dollars. The next expense to take into account is the annual maintenance costs of one hundred and twenty five thousand dollars. The annual maintenance costs needs to be multiplied by five years, which means the cost for the maintenance comes out to six hundred and twenty five thousand dollars. The next expense associated with the MRI machine is the site preparation, site and installation cost of five hundred thousand dollars. The next expense associated with having an MRI in your network is the labor costs. The annual labor cost including benefits for the one and half employees is seventy thousand dollars. The annual costs of the staff have to be multiplied by five years and that equals out to be three hundred and fifty thousand dollars. The final expense to include is the supply costs for five years of running an MRI machine. The supply cost per scan is forty dollars. The MRI machine will be running for fifty weeks annually with twenty seven scans being done every week. When configuring the amount of supplies used annually you need to multiple twenty seven

Financial management is important to the organization because it provides pertinent finance and accounting information to help managers accomplish the purpose of the organization. Financial accounting provides accounting information to external users. On the other hand, managerial accounting is more for managers (internal users) to use for things like planning, budgeting, etc. The definition of finance has changed over the years, but it’s used to ultimately evaluate previous decisions and make assessments for future decisions of the organization.

Government financed health care typically has more control to place limitations on care offered to patients and doctors in order to keep costs down. Since payers must try to deliver the most care for the

Google’s total assets have steadily increased dating back from 2008 to 2012. Some key figures to point out in their assets are the slow growth between the second half of 2008