Creating a Radiology
Business
Plan
John J. McGreevy M.B.A. RT ( R)
Where to begin?
Identifying the need
•
•
•
•
•
•
I need a new MRI unit our unit is over 12 years
I can not perform the exams our referring physicians are requesting
We are losing patients
Patients are waiting 10 day for an appointment
Our exams take too long on the old unit
We can not compete with the other organizations in our area
Information gathering
• What do I need to do to get started
• I need information Market, Procedure volumes
• Where do I get this information
• What resources are available to me
• Who are the Key Stake Holders and Decision Makers
• RFP to Identify equipment needs and configurations
The Market
• What is my market
• Primary Service area usually defined by the
• organization’s marketing department
• Where can I find information on procedure
volume
• In house marketing department
• SG2 for a fee
• Advisory board for a fee
• IDPH website http://www.idph.state.il.us/
• Health facilities planning board
http://www.hfsrb.illinois.gov/
• Facility profiles and summary sheet
• http://www.hfsrb.illinois.gov/hfsrbinvent_data.
htm
• Hospital Profiles and Annual Bed Reports
Customer and Demographics
• Define who your target customers are
• Patients
• Referring physicians
• Physician extenders
• Insurance providers
Key elements and decisions
Market position: Technology assessment in relation to market RFP
Unique selling position: What gives your products/services the
edge
Anticipated demand: What is the anticipated quantity procedures
for your primary service.
Pricing strategy: Are you competing with Outpatient Centers. If
so how do plan to compete. Only verifiable consistent published
price is from CMS
Value to customer: How do your customers view your
products/services Value based purchasing
Growth potential: What is the anticipated percentage growth of
the product in the future. MRI US generally predicted to grow at a
faster rate that Nuclear Medicine. 2 presentation tomorrow
S.W.O.T. analysis
[List each of your businesses strengths, weaknesses, opportunities or threats in the table below and then outline how you plan to address each of the weaknesses/threats.]
Opportunities
Threats
1. Build on customer and brand loyalty
1. Declining Reimbursements
2. New Service Not currently offered Cardiac MRI, CT, PET/CT
2. Healthcare reform
3. Unmet demand long wait for services
3. Clinical Decision Support Systems changing ordering patterns
4. Competition from other providers
Strengths
Weaknesses
1. Good referring physician relationships
1. High Capital Outlay
2. High patient satisfaction
2. Accurate information on competition
3. Financially stable organization
4. High quality service
Competitors
Competitor
Type of
Facility
Size
Market share
(%)
Value to customers
Strengths
Weaknesses
[Number of
staff and/or
turnover]
[Estimated
percentage of
market share]
[Unique value to
customers. E.g.
convenience, quality,
price or service?]
[What are your
cozgnbzgbpetitor's main
strengths?]
[What are your competitor's
main weaknesses?]
[Competitor name]
[Number of
staff and/or
turnover]
[Estimated
percentage of
market share]
[Unique value to
customers. E.g.
convenience, quality,
price or service?]
[What are your competitor's
main strengths?]
[What are your competitor's
main weaknesses?]
[Competitor name]
[Number of
staff and/or
turnover]
[Estimated
percentage of
market share]
[Unique value to
customers. E.g.
convenience, quality,
price or service?]
[What are your competitor's
main strengths?]
[What are your competitor's
main weaknesses?]
[Competitor name]
[Number of
staff and/or
turnover]
[Estimated
percentage of
market share]
[Unique value to
customers. E.g.
convenience, quality,
price or service?]
[What are your competitor's
main strengths?]
[What are your competitor's
main weaknesses?]
[Competitor name]
[Number of
staff and/or
turnover]
[Estimated
percentage of
market share]
[Unique value to
customers. E.g.
convenience, quality,
price or service?]
[What are your competitor's
main strengths?]
[What are your competitor's
main weaknesses?]
[Competitor name]
Local Market MRI Analysis
Facility
Bed
Size
# of I/P # of O/P Total
Visits
Visits
visits
# of
MRI's
Open
MRI's Model
% I/P
Busines % O/P
s
Business
M to F Hours of
Operations
O/P Saturday O/P Sunday
Hours
Hours
Comments
0
Loyola University Medical
Center
University of Chicago
568
571
4,250
3,370
10,500 14,750
10,877 14,247
5
6
Rush University
674
4,193
7,982 12,175
4
UIC
438
3,617
7,064 10,681
5
Northwestern Memorial
Hospital
Palos Hospital
720 11,199
366 N/A
36,791 47,990
2,080
11
1
0
0
3 1.5T GE 1 3T
Siemens, 1.5T Ultra
short bore Siemens
2 3T units 4 1.5T units
29%
3 out patient 7 am
to 7 pm 1
inpatient 7am to
11 pm
71% 1inpatient 24/7
7 am to 7 pm
24%
1 unit 24/7 3 unit
7 am to 11pm
1 unit 24/7 2
2units 7am to 7
units 7 am to
76% pm
11 pm
0
1 3T unit 3 1.5 T units
34%
34%
0
1 7T 1 3T 3 1.5T
11 Siemens Magnets 5
in free standing
outpatient Blg. 6 mixed
use inpatient and
outpatient in hospital
setting
0
1.5 T
1 inpatient unit
24/7 3 units 7 am
66% to 11pm
1 unit 24/7 3 unit
7 am to 11pm 1
66% unit 8 am to 4:30
2 units 24/7 9
units 6 am to 11
77% pm
23%
N/A
N/A
Not available all
MRI services
provided under
contract off site
Joint Venture
3 units 7 am
to 7 pm
Nurse staff in
Radiology
handles
sedation 5
nurses
assigned to
7 am to 7
MRI on day 2
pm
on PMs
Nurse staff in
Radiology
handles
1 unit 24/7 I sedation 6
unit 7 am to nurses
7 pm. On
assigned to
call if
MRI on day 3
volume is
on PMs 1 on
high
midnight
Contract for 2
outpatient
units 7 am units. No
to 7 pm
peds sedation
3 units 7 am 2 units 7 am
to 11pm
to 11 pm
No Peds
sedation
cases very
2 units 24/7 2 units 24/7 rare to have
9 units 6 am 5 units 6 am anesthesia
to 11 pm
to 11 pm
cases
Not available
all MRI
services
provided
under
contract off
site Joint
Venture
Little Company of Mary
Hospital
280 N/A
St. James Hospital
167
N/A
1,658
1,656
N/A
3,314
1
N/A
0
1.5 T GE
50%
34%
Resurrection Medical Center
362
2,477
4,854
7,331
2
0
GE 16 channel State of the art
1 picker unit old
Alexian Brothers
387
3,469
7,182
10,651
5
0
1 3T 4 1.5 T
33%
Ingalls
383
4,919
8,861
13,780
5
0
Our Lady of the Resurrection
151
736
1,001
1,737
2
0
1 3 T 4 1.5T
1 3T unit 1 old 1.5 unit not
staffed as a back up
Westlake Hospital
220
631
988
1,619
1
0
1 1.5 T
0
1 GE HDX 16 channel. I mobile
unit removed 2 months ago
St Mary's of Nazareth
322
773
2,700
3,473
1.5
Not available all MRI
services provided
under contract off site
Joint Venture
1 unit 7 am to 11pm 1 unit 7am to 7
50% 1unit 7 am to 7 PM
pm
Not available all MRI
services provided
under contract off
site Joint Venture
on call
No Peds sedation No
trauma
No Peds sedation
cases very rare to
have anesthesia cases
7 am to 3:30 PM on call
1 unit 7 am to
Open MRI at
11pm 2units 7
1 unit 7am to outpatient facility no
am to 4 PM
4pm then oncall peds sedations
36%
66% 6 am to 10:30 PM
1 unit 24/7 3unit 7 am
to 11pm; 1 unit 7 am
67% to 5pm
1 unit 24/7 3unit 7 am
to 11pm; 1 unit 7 am
64% to 7pm
3 units 7am to 11 2 units 7 am to
pm
7 pm
No peds no sedations
42%
58% 7am to 7 pm
8 am to 4:30 pm on call
No sedation patients
no peds
39%
61% 8 am to 4:30 PM
7am to 3:30
on call
No sedation patients
no peds
8 to 4:30
Volume may drop
hours have been
expanded due to loss
of mobile
22%
78% 7am to 7 pm
8 to 4:30
MRI center is not
entirely hospital
owned it is a
partnership with
physician investors
2 units 8am to
1 unit 8am to
4:30
4:30 PM
2 units 7 am to 7 1 unit 8am to
PM
4:30 PM
2 units 7 am to 7 2 units 7 am to
PM
7 pm
36%
2 units 7 am to 10pm.
79% 1 unit 8am to 4:30 PM
2 units 7 am to 11pm.
70% 1 unit 7am to 7PM
1 unit 24/7 2 units 7
64% am to 11pm
1 unit 24/7 3 units 7
am to 11pm 1 unit 7
64% am to 7pm
4 1.5 T units
36%
64% 7 am to 11pm
8 am to 4:30 pm on call
No sedation patients
no peds
1 3T unit
14%
86% 7am to 11pm
8 am to 4:30 pm on call
No sedation patients
no peds
Macneal
293
1,562
5,832
7394
3
0
3 1.5T units
21%
Silver Cross
256
2,278
5,251
7,529
3
0
30%
Provena St Joseph Joliet
341
3,367
6,107
9,474
3
1
3 1.5 T units
3 1.5 units in hospital 1 open
in outpatient
Ingalls
383
4,919
8,861
13,780
5
0
5 1.5T units
Stroger ( Cook County)
464
2,415
4,242
6,657
4
0
West Suburban
202
371
2,281
2,652
1
0
36%
3 unit 7am to
11pm
2 units 7 am to
11 pm
No sedation patients
no peds
No sedation patients
no peds
No sedation patients
no peds
MRI procedures per unit select hospitals
Total MRI Procedures
Hospital
Procedures per Unit
2008
2008 Onsite
Admissions Outpatient Visits
2008 ED
Visits
MRI Units*
2006
2007
2008
% IP in 2008
2006
2007
2008
ACMC
Advocate Condell
Advocate Good Samaritan
Advocate Good Shepherd
Advocate Illinois Masonic
Advocate Lutheran General
Advocate South Suburban
Advocate Trinity Hospital
2
2
3
3
2
4
1
1
9,641
10,637
6,475
2,021
6,723
7,287
4,571
1,735
9,887
8,469
6,561
5,013
6,419
11,896
4,485
2,489
10,697
6,080
7,556
5,544
7,102
14,404
4,359
1,618
48.9%
47.9%
34.8%
37.9%
28.0%
39.8%
41.4%
7.2%
4,821
3,546
3,238
2,021
6,723
1,457
2,286
1,735
4,981
2,823
3,281
5,013
6,419**
2,974
2,243
2,489
5,349
3,040
2,519**
1,848**
3,551
3,601
4,359***
1,618
45,814
17,491
22,745
14,754
21,687
34,652
15,221
14,975
283,407
305,360
174,014
179,207
147,864
294,749
105,327
82,144
80,954
45,944
32,769
32,840
38,791
54,629
41,856
38,038
Loyola
Northwestern
Rush
University of Chicago
University of Illinois
5
11
4
6
3
11,597
47,213
12,175
14,247
10,681
15,973
52,268
11,959
16,232
11,511
14,834
48,925
12,083
17,295
10,075
20.8%
20.9%
31.7%
23.8%
17.4%
2,899
5,246
3,044
2,375
3,560
3,195
4,752**
2,990
2,705
3,837
2,967
4,448
3,021
2,883
3,358
37,940
54,481
35,423
29,840
22,204
685,574
521,774
377,494
401,714
453,215
55,648
79,188
46,356
82,828
55,680
Little Company
Palos Community
Holy Cross
South Shore
Silver Cross
Ingalls
Roseland
MetroSouth
1
0
1
1
2
5
1
1
0
0
0
43
7,529
13,780
144
2,929
1,412
0
1,623
43
7,182
14,678
42
3,247
3,549
0
1,685
31
7,612
8,158
69
2,886
40.0%
0.0%
35.4%
100.0%
29.9%
59.0%
40.6%
53.2%
0
0
0
43
2,510
2,756
17
732
1,412**
0
1,015
0
3,591
2,936
27
812
3,549
0
0
0
3,806
1,232
0
2,886
17,713
20,567
9,440
5,442
22,164
23,180
5,191
12,257
203,520
187,224
92,608
24,504
179,184
216,400
11,971
43,271
59,798
48,005
44,533
12,493
58,861
41,534
17,060
41,344
*MRI units include owned in 2008, shared and contracted units
**Added a MRI unit
***Removed a MRI from operation
Competing Magnets by type
Facility Name
High Tech Palos Heights
Midwest Orthopaedic Consultants
Midwest Orthopaedic Consultants
High Tech Tinley Park
Ingalls - Tinley Park Family Care Center
Midwest Physicians - Orland Park
Open Advanced MRI of Tinley Park
Orland Open MRI
Parkview Orthopedics
South Suburban Open MRI
Southwest Hospitals MRI Center
Advocate Christ Medical Center
DIA Chicago Ridge Radiology
Health Medical Imaging
Oak Lawn MRI
Preferred Open MRI II
Regional MRI
Ingalls Hospital
Advantage MRI of Lemont
Advocate Trinity
Homer Glen Open MRI & Imaging
MetroSouth
St. James Community Health Center of Mokena
5-mile radius Total
SSA Total
TSA Total
*Located within 5-mile radius of ACMC/AHCH
Zip Code
60463
60465
60467
60477
60477
60467
60477
60467
60463
60487
60453
60453
60415
60453
60453
60629
60455
60426
60439
60617
60491
60406
60448
ACMC Service Area
PSA
PSA
PSA
PSA
PSA
PSA
PSA
PSA
PSA
PSA
PSA*
PSA*
PSA*
PSA*
PSA*
PSA*
PSA*
SSA
SSA
SSA
SSA
SSA
SSA
Total MRI Units
2
1
1
1
1
1
1
1
1
1
3
2
1
1
1
1
1
5
1
1
1
1
1
9
24
31
Unit Type(s)
2 Closed (including a 3.0T), 1 Open
Open
Open
Open
Closed
Open
Open
Open
Open
Open
2 Closed (including 2 - 1.5T), 1 Open
2 Closed (including a 1.5T)
Open
Open
Open
Open
Open
2 Closed, 3 Open
Open
Open
Open
Closed (1.5T)
Open
4 Closed Units in 5-mile radius
8 Closed Units in PSA
10 Closed Units in TSA
MRI Market Growth for Primary Service area source Advisory Board
ClinicalServiceCatego
ry
ProcedureGroup
MRI
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
5,687
5,716
5,746
5,762
5,802
5,857
5,896
5,949
5,995
6,043
6,094
35,502
35,702
35,938
36,172
36,456
36,743
36,958
37,270
37,522
37,793
38,082
2,552
2,679
2,813
2,954
3,102
3,257
3,420
3,591
3,770
3,959
4,157
MRI - cardiac
465
466
700
900
1,100
1,155
1,213
1,273
1,337
1,404
1,474
MRI - chest/thorax
559
563
568
573
578
583
587
593
598
603
608
MRI - lower extremities
37,956
38,108
38,274
38,439
38,648
38,849
38,985
39,211
39,380
39,567
39,771
MRI - orbit, face, neck
9,705
9,758
9,807
9,830
9,897
9,995
10,065
10,156
10,237
10,323
10,415
MRI - other
487
488
489
488
490
492
493
496
498
500
502
MRI - pelvis
2,827
2,837
2,848
2,860
2,874
2,885
2,894
2,910
2,921
2,933
2,946
MRI - spine, cervical
17,343
17,405
17,486
17,561
17,666
17,776
17,856
17,983
18,079
18,183
18,296
MRI - spine, lumbar
33,657
33,860
34,090
34,290
34,572
34,890
35,127
35,452
35,725
36,016
36,325
MRI - spine, thoracic
5,152
5,174
5,203
5,229
5,265
5,301
5,328
5,369
5,400
5,434
5,470
17,950
18,061
18,183
18,308
18,454
18,599
18,708
18,862
18,990
19,128
19,275
MRI - abdomen
MRI - brain
5% MRI - breast
5% after 2015
MRI - upper extremities
Referral by service line
Service Line
Orthopedics
Neurosciences
General Medicine
Oncology
Other
Total
2007
2008
2009
Total
1,802 (34.8%)
884 (17.1%)
962 (18.6%)
630 (12.2%)
902 (17.4%)
5,180 (100%)
1,884 (34.7%)
1,032 (19.0%)
969 (17.8%)
647 (11.9%)
901 (16.6%)
5,463 (100%)
1,949 (33.3%)
1,584 (27.1%)
416 (7.1%)
775 (13.3%)
1,121 (19.2%)
5,845 (100%)
5,635 (34.3%)
3,500 (21.3%)
2,347 (14.3%)
2,052 (12.5%)
2,895 (17.6%)
16,429 (100%)
Note: Inpatient Service Lines based on Corporate service line definitions (ICD-9 Dx)
Source: TSI
Outpatient Procedure Volume Primary and Secondary Service area
T h om s on O utp a tie n t P ro jec tion s (P o pu latio n)
2006
2007
2008
2009
2 0 10
2 0 11
2 01 2
2 01 3
20 1 4
A C M C S er v ice A re a
P ro c ed u re s P ro c ed u re s P ro ce d ur e s P r o ce d ur e s P r oc e d ur es P r oc e d ur es P r oc e du re s P ro c e du re s P ro c e du re s
P SA
S SA
TSA
7 8 ,53 6
5 4 ,13 7
1 3 2 ,66 8
7 8 ,71 3
5 4 ,49 1
1 3 3 ,20 1
7 8 ,89 0
5 4 ,84 7
1 3 3 ,7 3 6
7 9 ,0 6 8
5 5 ,2 0 5
1 3 4,2 7 3
7 9,2 4 6
5 5,5 6 3
1 3 4,8 1 0
7 9,4 2 4
5 5,9 2 4
1 35 ,3 5 0
79 ,6 0 3
56 ,2 8 7
1 35 ,8 9 1
79 ,7 8 2
56 ,6 5 2
13 6 ,4 35
7 9 ,9 61
5 7 ,0 20
13 6 ,9 81
T h om s on O utp a tie n t P ro jec tion s w /Te c h no log y E s tim a tes
2006
2007
2008
2009
2 0 10
2 0 11
2 01 2
2 01 3
20 1 4
A C M C S er v ice A re a
P ro c ed u re s P ro c ed u re s P ro ce d ur e s P r o ce d ur e s P r oc e d ur es P r oc e d ur es P r oc e du re s P ro c e du re s P ro c e du re s
P SA
S SA
TSA
7 8 ,53 6
5 4 ,13 7
1 3 2 ,66 8
7 8 ,71 3
5 4 ,49 1
1 3 3 ,20 1
7 8 ,89 0
5 4 ,84 7
1 3 3 ,7 3 6
7 9 ,0 6 8
5 5 ,2 0 5
1 3 4,2 7 3
8 1,0 5 5
5 6,8 5 2
1 3 7,9 0 8
8 3,0 9 1
5 8,5 4 8
1 41 ,6 4 1
85 ,1 7 9
60 ,2 9 5
1 45 ,4 7 6
87 ,3 1 9
62 ,0 9 4
14 9 ,4 14
8 9 ,5 13
6 3 ,9 46
15 3 ,4 59
T h om s on O utp a tie n t P ro jec tion s M id po in t B e tw e en P o p ula tion an d Te c h no log y E s tim a te s
2006
2007
2008
2009
2 0 10
2 0 11
2 01 2
2 01 3
20 1 4
A C M C S er v ice A re a
P ro c ed u re s P ro c ed u re s P ro ce d ur e s P r o ce d ur e s P r oc e d ur es P r oc e d ur es P r oc e du re s P ro c e du re s P ro c e du re s
P SA
S SA
TSA
7 8 ,53 6
5 4 ,13 7
1 3 2 ,66 8
7 8 ,71 3
5 4 ,49 1
1 3 3 ,20 1
7 8 ,89 0
5 4 ,84 7
1 3 3 ,7 3 6
7 9 ,0 6 8
5 5 ,2 0 5
1 3 4,2 7 3
8 0,1 5 0
5 6,2 0 8
1 3 6,3 5 9
8 1,2 5 8
5 7,2 3 6
1 38 ,4 9 6
82 ,3 9 1
58 ,2 9 1
1 40 ,6 8 4
83 ,5 5 0
59 ,3 7 3
14 2 ,9 25
8 4 ,7 37
6 0 ,4 83
14 5 ,2 20
Service areas with Competition
Status Check what do I have so far
•
I need a new MRI unit completed my technology assessment possible RFP
• I have information on the volume of procedures projected in my primary market area
• I have information on the number of MRI units competing in my primary service area
• I know the outpatient volumes of my competitors reported to the state I know it is a year
old but all market data is 1-2 years old
• With this information I can calculate my market share and make growth projections
Next Steps
• Fill out capital request form and bring it to CEO and CFO for their signatures
• Shock and disappointment when they did not sign it
They have questions
What is the payback period on this
How much revenue will this produce
What is IRR
We are getting ready to issue bonds for a new building will this effect
our rating
• Should we lease this item or purchase it
•
•
•
•
•
Speaking the same language as finance
• Account methods Cash vs. Accrual Accounting
Cash Method
Cash Basis produces a measure called Net Operating Cash flows. The difference between
Cash received and cash payments. Accounts debited or credited when cash is received or paid
Used by smaller companies used in analysis by larger Companies.
Accrual Accounting
Accrual accounting reflects other resources provided and consumed by the organization does not
Focus only on cash flow. Resources provided by operations are revenue resources consumed
by operations are called expenses. Net income is the difference between revenue and expenses
Standard Financial Reporting statements how
will my business plan request effect the
statements
Balance Sheet is a position statement that presents an organized list of assets, liabilities and
equity at particular point in time. Quarterly or annually
Income statement The income statement is change statement summarizes the profit generating
Transactions ( patient procedures) that causes a change in retained earning and hopefully positive
Contribution margins
Statement of Cash flows The statement classifies all transactions affecting cash into one of 3
categories operating activities, investing activities ( capital purchases) and financing activities
( loans, bonds, income from investing)
I work in Radiology why would I care about
financial statement what’s in it for me?
Most organizations issues bonds for long term investments essentially a mortgage on assets
such as new buildings, patient tower etc.
Bond rating companies use financial statements to gage the credit worthiness of an organization
Working capital is the difference between current assets and current liabilities measure of an
Organizations ability to satisfy short term obligations
Current assets
Current ratio = --------------------Current liabilites
Total liabilities
Debt to equity ratio = --------------------------------organizations equity
Definitions
Internal Rate Of Return - IRR
The discount rate often used in capital budgeting that makes the net present value of all cash flows
from a particular project equal to zero. Generally speaking, the higher a project's internal rate of
return, the more desirable it is to undertake the project. As such, IRR can be used to rank several
prospective projects an organization is considering. Assuming all other factors are equal among the
various projects, the project with the highest IRR would probably be considered the best and
undertaken first.
Time value of money means that money that can be invested today to earn interest and
grow to a larger dollar amount in the future.
• Present value of a single amount is today’s equivalent to a particular amount in the future
In this case the cash flow values remain the same throughout the n periods. The present
value of an annuity (PVA) formula has four variables, each of which can be solved for:
See example on table 4 PV of an ordinary annuity N=number of periods, I = interest rate,
PV=present value, FV=future value
Definitions Continued
Payback period in capital budgeting refers to the period of time required to recoup the
funds expended in an investment, or to reach the break even point. For example, a $1000
investment which returned $500 per year would have a two-year payback period. The time
value of money is not taken into account. Payback period intuitively measures how long
something takes to "pay for itself
Lease vs Purchase of a asset
Reasons to lease
• Start up companies with insufficient funds to purchase equipment
• Facilitate acquisition of equipment
• Tax incentives
Issues with leases
• Off Balance Sheet financing
• Purchased assets effect debt to equity ratios
• Lowers the calculations on rate of return on assets
Operating lease
• Rent
• Mobile equipment periodically on site
Capital Lease
• Direct financing lease
• Sales type lease
Capital leases
Agreements that we identify as leases but which in reality are essentially installment purchases
Accounting for leasing attempts to see through the legal form of the agreement to determine
their economic substance. If the agreement transfers the benefit of ownership to the lessee it would be
classified as a capital lease
A lessee should classify a lease transaction as a capital lease if it includes a non cancelable lease
term and one or more of the following criteria
1.
2.
3.
4.
The agreement specifies the ownership of the asset transfers to lessee
The agreement contains a bargain purchase option
The non cancelable lease term is equal to 75% or more the expected economic life of the asset
The present value of the minimum lease payment is equal or greater than 90% of the fair value
of the asset
BUDGET NEW PROGRAM REQUEST
NAME OF REQUEST
New MRI
COST CENTER
MRI
MANAGER
MANAGER MRI
NET FY2016 FINANCIAL IMPACT
$
855,000
DESCRIPTION OF REQUEST
INCREMENTAL VOLUME
ENTER VOLUME
JUL
AUG
SEPT
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
TOTAL
-
REVENUE PER UNIT
1800
Reimbursement may need to be adjusted based on nature of
30.0% proposal
Estimated Net Revenue %
REVENUE
Total Estimated Charges
Total Estimated Net Revenue
$ 390,000
$ 117,000
FTEs
MRI Technologist
Clerical Support
ANNUAL SALARY/FTE
MRI Technologist 1.0
Clerical Support
$ 390,000
$ 117,000
$ 390,000
$ 117,000
$ 390,000
$ 117,000
$ 390,000
$ 117,000
$ 390,000
$ 117,000
$ 390,000
$ 117,000
$ 390,000
$ 117,000
$ 390,000
$ 117,000
$ 390,000
$ 117,000
$ 390,000
$ 117,000
$ 390,000
$ 117,000
3.0
1.0
3.0
1.0
3.0
1.0
3.0
1.0
3.0
1.0
3.0
1.0
3.0
1.0
3.0
1.0
3.0
1.0
3.0
1.0
3.0
1.0
3.0
1.0
60,000.0
24,000.0
60,000.0
24,000.0
60,000.0
24,000.0
60,000.0
24,000.0
60,000.0
24,000.0
60,000.0
24,000.0
60,000.0
24,000.0
60,000.0
24,000.0
60,000.0
24,000.0
60,000.0
24,000.0
60,000.0
24,000.0
60,000.0
24,000.0
$ 4,680,000
$ 1,404,000
3.0
1.0
0.0
0
INCREMENTAL EXPENSES
Salaries
Benefits (25%)
Purchased Services
Supplies
Physician Fees
Deprecation
OTHER
TOTAL EXPENSE
TOTAL FINANCIAL IMPACT
TOTAL NEW FTES
$
$
17,000
4,250
$
$
17,000
4,250
$
$
17,000
4,250
$
$
17,000
4,250
$
$
17,000
4,250
$
$
17,000
4,250
$
$
17,000
4,250
$
$
17,000
4,250
$
$
17,000
4,250
$
$
17,000
4,250
$
$
17,000
4,250
$
$
17,000
4,250
$
12,500
$
12,500
$
12,500
$
12,500
$
12,500
$
12,500
$
12,500
$
12,500
$
12,500
$
12,500
$
12,500
$
12,500
$
12,000
$
12,000
$
12,000
$
12,000
$
12,000
$
12,000
$
12,000
$
12,000
$
12,000
$
12,000
$
12,000
$
12,000
$
45,750
$
45,750
$
45,750
$
45,750
$
45,750
$
45,750
$
45,750
$
45,750
$
45,750
$
45,750
$
45,750
$
45,750
$
71,250 $
4.0
71,250 $
4.0
71,250 $
4.0
71,250 $
4.0
Note Unit Operates 10 hours per day 5 days per week 50 weeks 2500 procedures per year
71,250 $
4.0
71,250 $
4.0
71,250 $
4.0
71,250 $
4.0
71,250 $
4.0
71,250 $
4.0
71,250 $
4.0
$
$
$
$
$
$
$
$
71,250 $
4.0
204,000
51,000
150,000
144,000
549,000
855,000
4.0
Executive Summary 1-2 pages
•Growth Highlights – Include examples of procedure growth, such as financial
or market highlights (for example, increase in MRI volume year-over-year
Graphs and charts can be helpful in this section.
•The Mission Statement – This explains what your business is all about. It
should be between several sentences and a paragraph. Outline the objective
of the plans such increase volume, patient satisfaction, physician satisfaction
•Your Products/Services -- Briefly describe the new procedures or services
you provide Include easy of access if applicable
•Financial Information – Include new revenue projections, IRR payback
period, effect on cash flow
•Summarize future plans – Explain where you would like to take service in
line in the future
Summary
• Identify your needs for equipment / program
• Identify key stake holders get their input
• Identify competition know their resources
• Collect data on Market Volume
• Obtain Market growth projections
• Calculate cash flows, NPV, IRR
• Create Plan
• Create Executive Summary from plan
• Ready to submit