The Purchase of Health Care Equipment Project

The Purchase of Health Care Equipment Project

An equipment acquisition proposal was being considered by a large health care organization, XYZ
Health Care. The array machine will enable the hospital to perform autoimmunity tests Gar
immunoglobulins G. M. and A and complements C3 and C4) in-house rather than sending them to a
reference laboratory. Test turnaround time is expected to decrease by 2 days. The array machine
costs $50,000, with a useful life of 5 years. The depreciation schedule will be $ 10, GOO/year. The
expected volume for tests is one of each of the five autoimmunity tests per day. Having the tests
done by the reference laboratory costs the hospital on average of $ TO/test. The hospital’s average
charge to patients is $20/test. If the array machine is acquired and the tests done in-house, the
costs of reagents would average $2/test. The array machine can run a maximum of 40 patient
samples and perform 20 different tests on each sample every 2 hours. Except in extraordinary
circumstances, tests would be run Monday through Saturday. The machine requires approximately
1 hour of technician time (valued at $15/hour) each day to calibrate it, to conduct a test run for
control purposes and to perform general maintenance. This is a fixed cost because it does not vary
by volume. Technician setup time to run tests is negligible. Beyond the five autoimmunity tests the
laboratory wants to perform in-house, the machine can also perform apolipoprotein cardiac
profiles that are currently done on equipment in the clinical chemistry department. The array machine can provide a quantitative measure and not just the positive or negative indicator that the
clinical chemistry department‘s current equipment gives. Deliverables: The CEO of XYZ Health Care
has hired you as a consultant to prepare a report addressing the following questions listed below.
How many autoimmunity tests per year will have to be performed on the array machine to break
even? – Given the present volume of tests, would there be an annual net contribution and. if so.
how much? – lf half of the patients have Medicare coverage (DRG reimbursement includes all tests),
would the laboratory break even on the equipment? If not, should the equipment be acquired
anyway? The written report must include the following: – APA formatted cover and reference page
APA formatted double-spaced typed submission in Times New Roman font – The report must
include excel spreadsheet incorporated within the word document with calculations using excel
functions and graph illustration – The report must not exceed four to five (4-5) pages (which
excludes the required cover page reference page and any graphs/illustrations) Resources: Longest,
B.B., Rakich, j.S., & Darr, K. (2000). Managing health services organizations and system. Baltimore:
Health Professions Press

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