ESSAY #2 – required for all students: Based on the LearnScapes Episode Equipment Purchase, you will prepare an Excel spreadsheet and you will prepare a multi-part essay in Word answering the questions described below.This essay need to be a minimum of 4 pages in Word not counting any questions you copy below, plus an Excel spreadsheet.It should be more pages if needed to fully cover the issues and explain your answers to the questions.
Navigate LearnScape Episode: Equipment Purchase
In this LearnScape, you are the CFO of small rural women’s health center within Bright Road
Health Care System. The physicians in the center have approached you to purchase a mammography 3D machine, at a cost of $500,000. The equipment is state-of-the-art and excellent for early diagnosis, but the women’s health center has limited funds and currently does not have a large incidence of breast cancer diagnosis. However, because the women’s health center is less than 50 miles from a metropolitan area, it’s possible that women might go to the larger metropolitan hospital (not in the Bright Road Health Care System) for diagnosis, treatment, and follow-up care. The physicians are arguing that getting the equipment would increase the center’s market share of general mammograms and certainly assist in early detection. In addition to thinking about the impact of the machine on early diagnosis and increasing revenue, you are keenly aware of the importance of keeping the young physicians happy, as they are fairly new to the small community and could easily move out of town. On the other hand, at the monthly meeting, the Board of Directors has indicated they want to keep a tight control over frivolous spending, as they are uncertain how new federal (such as PPACA) and state regulations will impact the solvency of the hospital corporation. You will need to consider finance, authority of Board of Directors, public relations/marketing, wishes of medical staff, needs of the community, and future implications when making a decision.
IN ADDITION TO THE FACTS IN THE VIDEO, YOU MUST ASSUME THE FOLLOWING:
•The purchase and initiation of services for the 3D mammography machine requires the grant of a Certificate of Need under Tennessee law.
•The closest urban area is a county the size and population mix of Rutherford (but assume this is about ONE hour away by bus).The closest 3D mammography machine is owned by a group of private physicians in a diagnostic center called Best Women’s Health Clinic.100% or the utilization of this machine is for patients who are either private pay or have commercial insurance.They do not provide services to TennCare or Medicare patients.
•Best Women’s Health Clinic will oppose the CON applicant for a 3D mammography machine.It will argue that the utilization of its 3D machine is at 80% now, but it will decrease by an estimated 20% if Bright Road gets approval because many of Best’s patients drive from the surrounding rural counties.
•Your other assumptions are as follows:
oFees to obtain CON: $20,000 first year only
oMachine: $500,000 ($100,000 per year)
o Renovations:$150,000 first year only Training: $10,000 first year only Salaries $210,000 per year
oMiscellaneous:$5,000 – $15,000 per year
oFemale population over 50: 9500 (increases 5% annually)
§Private Pay 10%
o Charges including tax:
§Medicare (80% allowable) $ 80
•Moore Radiology is the radiology group contracted to provide radiology services at your rural hospital and for other hospitals in the Bright Roads Healthcare system. Dr. Lien provides most of the radiology services for your hospital.Dr. Lien wants the new 3D Mammography machine and threatens to quit, purchase a 3D Mammography machine and open his own surgery center a block away from the hospital if your hospital does not agree to purchase a 3D Mammography machine.
LearnScape Characters – see the Appendix at the end
Additional Doctor: Dr. Lien – a radiologist with Moore Radiology who threatens to quit, purchase a 3D Mammography machine and open his own surgery center, if the hospital does not purchase a 3D Mammography machine.
Based on the video and assumptions above, prepare the following:
•Excel Spreadsheet:Prepare this first.Create a five (5) year projection of revenue and expenses using the assumptions above. In addition, create your own additional assumptions where necessary and state those assumptions clearly and specifically. The point here is to do a basic financial analysis to see if this project is financially feasible.It does not matter your specific format as long as it is easy for the reader to follow and you make reasonable assumptions and formulas.Save your file in Excel as Lastname-Essay2.xlsx and upload it to the Final Exam Dropbox.
•Essay in Word:This essay will have 4 parts (each part should be a minimum of one (1) page) In your answers, you must include discussion of other materials you have been assigned or that we have discussed, including articles, any applicable cases, textbook readings, applicable videos, other CON applications, or discussions led by guest speakers that you can use to relate to or support your points.You also need to add original research you have found. You do not need to use a formal citation format, but reference all sources and make it clear when you are referring to a source.Be sure to use quotes if you are quoting from a source.Also, give me enough details about the source (such as title, author, date, page number, weblink) so I can easily find it.
•Part I: Perspective of the Doctors.Make the case for the 3D mammography machine from the perspective of the doctors, clearly stating the ethical theory, ethical principles, and virtues/values that best support the doctor’s argument. Be specific in relating the facts to the ethical issues.Fully explain your rationale.
•Part II: Perspective of the Board.Make the case against the 3D mammography machine from the perspective of the Board, clearly stating the ethical theory, ethical principles, and virtues/values that best support this argument. Be specific in relating the facts to the ethical issues.Fully explain your rationale.
•Part IIII: Certificate of Need/ Health Services Development Agency.Create an analysis based on the four Tennessee CON criteria, including need, financial feasibility and orderly development, and quality.Fully explain the criteria and fully explain your rationale.Based on your analysis, state whether you think the CON will be approved by the THSDA.
•Part IV: YOUR Recommendation as the CFO. Write a letter to Mr. Quinn Smith, Chairman of the Board, in a formal letter format. Give your recommendation (approve, disapprove, or hold/ reconsider*).Provide your specific rationale with the evidence from the LearnScapes video, assumptions above, and your stated reasonable assumptions.Balance the financial concerns, the authority of the Board of Directors, public relations/marketing, the wishes of medical staff, whether you think CON approval will be granted, and future implications when making a decision.
Also, clearly state the ethical theory, ethical principles, and virtues/values that best support this argument. Be specific in relating the facts to the ethical issues.Fully explain your rationale.
*Note, if you do not think the CON is likely to be approved, but otherwise you determine the Board should approve the purchase, you should explain your rationale and advise the Board to hold and reconsider at another date (and you can give the future date).You may also decide to hold/reconsider for other reasons; if you do, just be sure to explain your rationale.
Save this essay in Word as Lastname-Essay2.docx and upload it to the Final Exam Dropbox.
Appendix: LearnScape Characters
Thomas Jenkins, Physician at the Women’s Health Center
Thomas is in his early 30s. He’s new to the Women’s Health Center, just having moved from a large city so he and his wife could raise their children in a large home with a yard.In his previous position, he was the top OB/GYN in his large hospital, which was touted as one of the most technologically advanced hospitals in the metropolitan area.
Maria Vasquez, Director of Nursing at the Women’s Health Center (case management)
Maria is in her late 40s. She’s a bright, very outspoken, knowledgeable woman. Maria is a breast cancer survivor, in remission for 10 years. She educates women in the community about the importance of prevention and early detection.
Quinn Smith, Chairman of the Board of Bright Road Health Care System
Quinn is in his 50s. In his capacity, Quinn takes on the responsibility for corporate governance, capital formation, setting the company’s operating strategy, and guiding it to profitability. The student will work with Quinn to get his opinion on the financial impact of the purchase, and its return on investment.