Overview
Big Bend Medical Center is a full-service, not-for-profit, acute care hospital with 325 beds located in Big Bend, Texas. The bulk of the hospital’s facilities are devoted to inpatient care and emergency services. (Gapenski, pg. 27) The outpatient services section of the hospital is used by the Outpatient Clinic, as well as the Dialysis Center. The Outpatient Clinic, which makes up about 80 percent of the outpatient services section, has recently grown in volume and has created a need for 25 percent more space than it currently has. Moving the Dialysis Center to a new building was decide to allow expansion of the Outpatient Clinic. A change and focus on the allocation of costs has some department heads angry and claiming of unfairness; and some are less likely to receive their end-of-year bonus. Rick Simmons, CFO, is completely in charge of how indirect costs are allocated, but the only restriction was they must be done within outpatient services. Before leaving Big Bend, Rick drafted an indirect cost allocation that had concerned the Director of the Dialysis Center, John Van Pelt. His concerns must be taken into consideration as well as fairness and promoting overall cost savings for the organization while a new allocation is created and

Executive Summary The Dialysis Center at Big Bend Medical Center performs hemodialysis and peritoneal dialysis, which are alternative processes that remove wastes and excess water from the blood for patients with end-stage renal (kidney) disease. In hemodialysis, blood is pumped from the patient’s arm through a shunt into a dialysis machine, which uses a cleansing solution and an artificial membrane to perform the functions of a healthy kidney. Then, the cleansed blood is pumped back into the patient through a second shunt. In peritoneal dialysis, the cleansing solution is inserted directly into the abdominal cavity