Capital Expenses

Financial Resource Management HSC571
July 21, 2014

Capital Expenses At Baptist Hospital Cancer Center it has been determined that a proposal for expenses for a digital imaging system is needed. This system is the BioVision by Faxitron. It is a Digital Surgical Biopsy Specimen Imaging System. The total cost is $99,875.00. With this acquisition it will include an instant corroboration of an effective biopsy procedure. This system has over twenty features. Some of these includes the 10cm x 15cm digital detector, high resolution 2.3 MP flat-panel LCD monitor, Ergonomic Keyboard, Transparent Imaging Door, 3 Hour Battery Backup Operation, Battery Life Indicator, Automatic Exposure, Automatic Calibration, 2 times Magnification, and DICOM compliant. The best feature will be the time saved in the operating room by using this imaging system. Additionally it includes one year warranty and one day of in-service training by a factory trained professional. This proposal explains how the acquiring of Faxitron’s BioVision is supported by the organizations goals and management needs and improving the financial well being of the Miami cancer center. The purpose for this report is to establish the need to invest in this system. The report will disclose financials and operating costs. The Baptist Hospital Cancer Center is a corporation that provides outpatient treatments to patients in its targeted area. Most of our patient about 85% to 90% will have health insurance or a medical cost reimbursement program. The lower cost it will attract patients who are paying for their own procedures, for example cosmetic cancer procedures. The center will offers outpatient services to adults and children in that targeted area. These services include consultation and outpatient procedures. A source for revenue for the surgery center is performing MRI, CAT scan, ultrasound, and other diagnostic procedures provided to patients through the new modernized facility. The center will then engage one or two radiologists who can provide these services to our outpatients. The Center’s mission is to provide outpatients with specialized and general high-tech care at reasonable costs and with a focus toward compassion. The Baptist Hospital Cancer Center will allocate same day cancer and medical care. This will include diagnostic care and preventative services. Cancer center’s area will be a modern concept in a health care locations where patients can have outpatient procedures and other procedures performed in a professional and modern facility without being admitted to a hospital. The main source of revenue for the Cancer Center is outpatient services executed onsite. In the center, the standard assumption is that patients stays between 6 to 10 hours until they are discharged depending on the procedure. The center has several contemporary operating rooms as well as a recovery room. The procedures currently offered include outpatient procedures, cosmetic procedures, and emergency outpatient services. The center will receives payments from our patients co-pays, Medicare, and insurance companies. Approximately 85% of the centers current patients use private insurance, Medicare, or Medicaid. There is going to be huge growth in the industry. The “Value Based Purchasing” options available by way of The Affordable Care Act have already been established. This plan allows for payments to Cancers similar to those that are already popular under the Medicare program. The report to Congress referred to need to improve payment quality and speed for this cancer center services. The intention is to reward this center for providing “better value, outcomes, and innovations, instead of merely volume” (Centers for Medicare & Medicaid Services, 2013). The plans is that Baptist Cancer Center’s will consistently be at a profit. Even for periods of recession, outpatient centers enjoy economic stability. People always need specialized diagnostic care and cancer patients require radiation treatments continuously. As the population increases so does the demand for outpatient treatment. The predicted growth rate of outpatient care in the next two decades is expected to grow rapidly as the baby-boomers demand treatment. The demand for these cancer centers increase based on the medical cause of the patient’s treatment. For example, as the baby boomers age there is an increased demand for disease management, this includes screening, diagnostics, and deliberation. An important draw for patients is that center provides them access to the most up to date technology. Considering Medicare data for the period 2000 to 2007 there has been a growth in outpatient services for all kinds. It will continue to increase and this means updated technology will be required for the cancer center, hospitals, and physician offices as well as other facilities that offer alternative sites for of outpatient procedures. We can conduct a comprehensive study of the growth factors for the cancer center. Hoping that the predicted growth for this typer of center will reflect the move away from the hospital inpatient surgeries to outpatient surgeries. The center needs to be prepared to use disease screening for common procedures, for example, breast cancer. Because these patients will have a choice, they will be drawn to this center that can provide them with the newest and improved technology, fast recovery times, pharmaceutical services, and modern x-ray procedures.
Productivity
Producitivity is the goal of the organization at the cancer center. The center is committed to being at the forefront when it comes to technology. This will be accomplished by Faxitron’s BioVison. This system is not only useful for daily imagining procedures. The surgeons will be able to use the BioVison in the operating room to reduce procedure times and advance patient care. The cutting-edge digital imaging technology comes with user-friendly software that is designed to be learned intuitively so that training time is short and the results are the finest images every time thereby bettering the workflow at the center and in the surgical suite. Specimen radiographs are ready for review immediately. This means that surgeons, technicians, and radiologists can view the x-ray simultaneously. The BioVision consistently reduces procedure times and saves on per procedure costs
Efficiency
The cancer center is in need of updated radiology equipment. The film x-ray equipment currently that we use is outdated, needs frequent repairs, and the x-ray results take a long period to be seen and look at. This means long wait times for the patients. The addition of a BioVision Digital Surgical Biopsy Specimen Imaging System would save the center money because the image takes only twenty-second to process and can be read right there, in the long run this will be cost saving. The BioVision is a 100% digital it does not use any film like the other machines do. Additional savings will be found from the outcome from using less paper, which will lead to less employee time transferring the film to be read at a different location, and less time trying to contact and schedule patients to review their x-rays results. The addition of new radiology equipment would eliminate the need for employees to wait on x-ray results, no need contact patients to explain the results or arrange for patients to make a return appointment to the center in order to review the findings. The BioVision uses the most up to date and foremost technology available. It is mostly valuable in a place like this center to practice where we can diagnosis of breast cancer. The standard of patient care will dramatically improve with BioVision. The best way to help your community of patients is the greatest achievement by offering them with the most advanced instruments/equipment. Increased Revenue One of the best ways to enhance the center’s revenue is by having an advanced customer service. Cancers centers are in competition with hospitals and medical centers the good way to attract business from physicians is by offering them the ability to refer patients and get results as fast and as conveniently as possible (French, 2011). The BioVision would definitely attract the attention of local physicians who would send their patients to the center for things like an x-ray as well as some tests and procedures.
Quality Assurance The administrative goals of the cancer center include making certain that the centers are prepared to enter into the next period of patient care, surgical remedies, and professional management by method of as proposed plan and to ensure a reliable, succinct involvement for patients, providers, families, and staff. The center is seeks to preserve a giant level of clinical patient standards. In doing so the organization will be better able to assess, detect, and increase the clinical results for its patients. By creating standardized procedures, we can take advantage on the use of modernized technology, cancer center will be able to make simpler the employee workflow which will increase employee productivity. Having a state-of-the-art clinical care center is one of the main goals. An example of how the BioVison would heighten quality assurance is the relevance of the equipment features. The BioVison eliminates the need to move the specimen to a different location because the unit is in the OR. It sets up easily and provides a superior digital image on the spot (Faxitron, 2013, p 6). This guarantee that the patient will not be bothered or required into an uncomfortable situation for a long time. The time reduction component lessen the workload for the workers thereby saving money on every procedure. Cleverley & Cameron (2011) refer to quality assurance in connection to revenue, however quality assurance in relevance to patient care can be improved using the Digital Imaging System. The patient information can be effortessly be approached from the system and reports created for the patient. The reports also can be used by these centers to help the clinical staff improve patient safety through reducing infection and helping with a fall prevention system. The reports that can be generated from this digital imaging system can help the management have an opportunity to analysis the documentation for accuracy. This information will help ensure quality patient care.
Economic Environment The economic environment of the cancer center will ameliorate at any time once the change has happened. The economic benefits by implement the digital imaging network is a cutback in the cost of work. This system integrates with the business office and will help with the coding and billing department. This system will link the clinical data to financial date and can improve documentation. Storage and supply costs will decrease with the use of the Digital Imaging System. Storage payments can be annihilate or decreased because of the amount of paper a health care facility must keep. An element to review is the price of an outside company that will shred our patient information. With the use of the Digital Imaging System we don’t need paper to be shredded and the result is a decrease in the cost. An improvement for the financial environment will in addition related to a reducing can for the need of repeated tests, such as x-rays because of a lost document. Reducing these duties above will help the staff will spend time that is effective with the patients.
Cost Containment The cancer center may have an ineffective way of practice when talking about medical record. There may be some areas of concern based on the place of documents, insufficient and lost documentation, and failure to complete on necessary needs of the patient. All of these issue will increase the cost and unneeded or ineffective treatment for the patient. The initial cost to get this system will be a lot at first and it may be awhile before we see the effects. The centers’s goal is to improve patient care by bringing down the cost of labor which then will lead to increase productivity. Will also help with decreasing the need for costly medications and unnecessary medications will help in cost containment and better patient results.
Leadership Role There are many testimonials available from reliable leaders and researchers in the field. The following are just a few from notables. Dr. G.W. Eklund, Clinical Professor of Radiology at the University of Illinois College of Medicine states that "Faxitron's unit has opened a new era in specimen radiography. The ultra-high resolution and 5 times magnification capability of needle core and excision biopsy tissue have enabled us to find micro-calcification that would otherwise escape detection. The superior contrast achieved with very low kV enables discrimination of soft tissue lesions that have similar density to normal glandular tissue. With Faxitron specimen radiography we can predict the extent and location of disease more accurately.” Dr. Michael N. Linver of the University of New Mexico School of Medicine considers the BioVision "…one of the great breakthroughs in breast cancer diagnosis in the past 10 years.” In his praise, Dr. Linver said of the BioVision “Through its exquisitely detailed magnification images, the Faxitron has expanded our understanding of breast pathophysiology, resulting in more accurate and complete diagnosis and better patient outcomes.” These leaders in the field point out the many benefits to the BioVision. Using this imagining system will allow the center to take its place as a leading cancer center as well as take a leadership role in educating its employees in the most modern technology.
Organizational Need The Cancer center’s goal is to provide the highest quality of clinical care which means that all procedures at the facility should be state-of-the-art. This goal sets the standard for all of the centers staff offers to its patients and their families. Having a standardization provisions will help with compliance. In order to be the best we must consistently maintain the best possible inventory of equipment. The center must establish that its goals include an effort to accomplish an enhancement to the patient’s experience. The BioVision improves the center’s potential to increase the standard of care of the patients by doing a biopsy. Since the BioVision results are instant the nurses will be able to bring patient care plans up to real time. With the film being instant the staff will spend less time handling film, or worse making the patient come in to the facility to have another set of x-rays because of film development issues. Repairs for the film, paper, and other associated issues with film x-rays will be eradicated. The staff can ensure that all of the patient’s medical records are up-to-date and accurate. Physician orders will be contained in the file and available immediately upon the review of the record. This best way of maintaining patient medical records. This will allow the staff to make informed and speedy decisions about a patient’s healthcare needs. The acquisition, simple delivery method and installation, along with the training provided by Faxitron (and included in the quote price) correlates with our goals of patient care, long-term revenue augmentation, our leaders in the community, and ethical responsibility. Comprehensive, precise, readable images will enhance the maintenance of medical records, lessen the possibility of error during transport of and development of film and above all guarantee that diagnosis and treatment for patients occurs in a timely fashion. The staff will require less time in performing clerical duties and it will increase cost containment overall. This should increase employee job satisfaction thereby reducing the risk of staff resignation. All the center staffs will be pleased to be using the most modern imaging equipment available.
Justification
This capital expenditure is justified because the BioVision Digital Imaging System meets the administrative, business, and clinical needs of the center. The improvement in information management will heighten employee’s job satisfaction and will result in quality of patient care. The problems associated with film will be eliminated because here is no development, transfer, and transport of physical film x-rays required. The elimination of film problems will increase efficiency, productivity, quality, and profits. Cost containment with regard to employees will be assured by acquiring the Digital Imaging System will allow the staff to focus on clinical issues. We will have reduce wait times since we are able to review a patient’s medical records quickly. The Digital Imaging System will reduce the time required to file, warehouse, and preserve our supplies for x-ray reports. Storage wont be needed for the patient files. This will be an immediate hard cost savings as will the reduction on supplies needed to maintain a film and paper records. By incorporating the patient’s clinical records, insurance information and payment will allow for faster and convenient for billing. It will streamline the procedure for billing insurance companies because all the information will be in one comprehensive patient file. The BioVision cost of $99,875.00 total will be redeemed in less than a year with a minimum number of procedures with the new equipment. The attached Time & Cost Savings calculations demonstrate that using a low estimate of four surgical procedures and assuming patient screens of approximately 32 per day the immediate monthly savings compared to film will be an estimated $20,800.00 per month. This equates to an estimated savings of $249,600.00 in the first year. This more than meets the requirements established by Cleverley & Cameron whose studies indicate that a capital expenditure should be based on the assumption that it will not only deliver benefits for a decent time period (two years being the established minimum) but also that the expenditure will be recovered. As it has been demonstrated in this report the benefit in many aspects for the acquisition of a BioVison. The organization has been needing a way to streamline patient medical records and way to have up to date radiology services. The call for this report and proposal is an acknowledgment that the cancer center wants to promote patient care, speak to employee productivity issues, increase complete productivity and service, and make sure to reach high quality patient experiences. By reducing repeated information of documentation alone will allow for increased organization when satisfying patient needs and simultaneously increase employee job satisfaction and therefore employee retention. New higher levels of productivity and precision will cause revenues to increase because of patient allegiance.
References
Cleverley, W. O., Song, P.H. & Cameron, A. E. (2011). Essentials of health care finance (7th ed.). Sudbury, MA: Jones and Bartlett
The Joint Commission. (2013). “Revised Requirements for the Ambulatory Health Care Program.” The Joint Commission Perspectives. Retrieved on July 19, 2014 from http://www.jointcomission.com
Peer Reviews. (2013). “Ask the Experts.” Retrieved on July 19, 2014 from http://www.faxitron.com/medical/peer-reviews/peer-review-dr-gw-eklund