Capital Request 2010
TABLE OF CONTENTS
Executive Summary ………………………………………………………………………………………………..........................Page 4
Description……………………………………………………………………………………..……………………….……….….....…....Page 5
Market/Internal Assessment………………………………………………………………………………….……………………….Page 7
Volume Projections …………………………….…………………………………………………………….…….…………………..Page 15
Financial Analysis……..……..…………….…………………………………………………….………….…………………….……..Page 18
Appendix…..…………………..…………………………………………………………………………….……………………………….
1
MARKET GROWTH BUCKET
Executive Summary
Project Background
The Hospital’s state-of-the-art Imaging Center has strived to be at the forefront of radiologic technology. Since
opening in August 2000 the Imaging Center has made great strides in the standards for service excellence. Its
continued growth and ability to embrace new technology has resulted in superior service to the community and
the entire Southland.
Among the most pressing concerns facing the Imaging Center is MR patient throughput. In 2009, HOSPITAL
A/HEALTH SYSTEM experienced over 46,000 inpatient admissions (including observation), 86,000 emergency
patient visits and over 287,000 non-ED outpatient visits. As HOSPITAL A/HEALTH SYSTEM continues to push
capacity to the limits, the Imaging Center must continue to meet demand.
Project Description and Justification
HOSPITAL A/HEALTH SYSTEM is seeking to purchase an additional 1.5 Tesla MR unit that can be utilized for
outpatient MR volume, and in turn, decompress the inpatient volume. The Hospital provides a large volume of
inpatient and outpatient MR services for the communities it serves. However, the Imaging Center is facing
extreme throughput challenges due to very high MR demand. In 2008, the MR scanners at HOSPITAL A/HEALTH
SYSTEM averaged over 700 more inpatient scans per unit than any other Illinois hospital’s scanners. These units
were also among the most heavily used units on an outpatient basis.
The result of this high demand has been lost outpatient opportunities and poor inpatient experiences for those
inpatients requiring early morning (2-3 a.m.) scans due to the inability to schedule timely scans. Additional lost
opportunities occur due to the inability of HOSPITAL A/HEALTH SYSTEM’s current MR scanners to accommodate
larger patients and claustrophobic patients.
Market Analysis/Volume Projections:
Nationally, MR cases are projected to grow, especially for outpatient procedures. Within HOSPITAL A’s total
service area (TSA), based on moderate projections as provided by Thomson, the outpatient market is projected to
grow by nearly 11,000 cases by 2014, while inpatient cases can be expected to grow by nearly 1,300 cases.
The Imaging Center anticipates a 7.5% increase of outpatient volume, with the added benefit of improved patient
throughput, higher patient satisfaction, improved clinical applications, and reduced risk of breakage by the current
MR units.
Financial Impact: The project has a net present value of $1,871,642; an internal rate of return of 27.12%; and a
payback period of 4.48 years.
2
Project Description and Justification
HOSPITAL A/HEALTH SYSTEM is seeking to purchase an additional 1.5 Tesla MR unit that can be utilized for
outpatient MR volume, and in turn, decompress the inpatient volume. Currently the HOSPITAL A/HEALTH SYSTEM
Imaging Center lacks the capacity to adequately accommodate inpatients and outpatients requiring its services due
to the volume of patients utilizing MR services at the Hospital.
HOSPITAL A/HEALTH SYSTEM currently has two MRs, and one mobile MR on campus:
1. 1.0 Tesla magnet purchased in 2000.
2. 1.5 Tesla magnet.
3. Mobile 1.5 Tesla MR unit, located across the street from the main Campus
a. Became fully operational in January 2010, leased with the goal of serving some of the outpatient
imaging needs until a permanent 1.5T can be purchased. The unit has a 30 month lease.
Since September 2009, a 1.5T MR unit has been operating at HOSPITAL A’s outpatient facility in Lockport. Since
opening, Lockport has averaged 34 MR procedures per month. According to the HOSPITAL A/HEALTH SYSTEM
Director of Radiology, patients who receive all other outpatient care on HOSPITAL A/HEALTH SYSTEM’s main
campus are reluctant to travel the 23.6 miles to Lockport for an MR study, though some patients accept this option
over waiting for a scan.
Not only will an additional MR unit allow HOSPITAL A/HEALTH SYSTEM to provide improved diagnostic services for
the tertiary and quatenary consumers in its communities, but it will also improve the outpatient care experience
by allowing more outpatients to schedule MR services at HOSPITAL A/HEALTH SYSTEM in coordination with their
other outpatient services.
The Imaging Center reports a significant volume of lost outpatient MR opportunities due to the extremely high
demand generated by the hospitals inpatient services. The department estimates that it turns away between 40
and 60 outpatients per month. The department also estimates that 3-6 patients are sent outside of the hospital
per month because the current MR units are unable to accommodate larger or claustrophobic patients. The result
is revenue lost to other imaging facilities for the procedures, and expenses incurred by HOSPITAL A/HEALTH
SYSTEM for patient transport.
In the last quarter of 2009, the outpatient order-to-scan time for MR services was as high as 9 days. As a result,
patients and physicians have chosen to go elsewhere for their scans. In 2008, HOSPITAL A/HEALTH SYSTEM
averaged 700 more inpatient MR scans per unit than the next nearest Illinois hospital. In addition, HOSPITAL
A/HEALTH SYSTEM performed among the highest number of outpatient scans per MR unit among Illinois hospitals.
The current state of MR services at HOSPITAL A/HEALTH SYSTEM is not adequate to meet the needs of the
Hospital’s dynamic and growing services. The use of MR has become the gold standard for soft tissue imaging of
the brain and spine. Newer high field strength magnets combined with state-of-the-art computer systems are
becoming the standard for Breast, Cardiac and Abdominal imaging.
A new MR unit will provide improved support to the Neuroscience, Heart & Vascular and Cancer Institute’s, Bone
& Joint Center, and newly approved Heart and Kidney Transplant programs. The upgrades will also further the
development of cutting edge neurosciences, orthopedic, oncology, and cardiovascular MR programs and protocols.
The following MR procedures are performed in the Imaging Center.





Neuro imaging (brain and spine)
Body imaging (chest abdomen and pelvis)
Musculoskeletal
Breast and Breast Biopsy capabilities
Cardiac
3

MR Angiography
An additional 1.5 Tesla MR scanner with the HDxt platform would result in:
 More confident diagnosis with more advanced applications,
 Increased revenue based on higher throughput,
 Faster throughput for head, neck, and spine imaging,
 Better image quality,
 Reputation of responding to the imaging and technology needs of referring physicians.
Some of the features and benefits of the additional HDxt MR unit are:
 Faster image reconstruction (2,700 images per second),
 Improved abdominal image quality,
 The introduction of new coils for better image quality using more channels,
 Enhanced cardiac imaging,
 New workflow software.
Procedure Enhancements
Body and Breast
 Higher resolution with the use of 32 channel coils,
 Scan times reduced by 25%,
 Dramatic improvement in body imaging, higher resolution and shorter scan times, reducing patient breathe
hold,
 Breast Spectroscopy.
Cardiac and Vascular
 Faster dynamic phases,
 Expanded heart imaging with time course, function and delayed enhancement imaging in real time if
necessary,
 Direct sagittal acquisition of the lower leg coil,
 Pediatric template for cardiac reporting.
Neuro
 New C-Spine sequences for grey/white matter and for nerve root visualization,
 T1 weighted high resolution study for fMRI overlays,
 3D enhanced background suppression to improve small vessels.
Musculoskeletal
 Cartilage assessment software for early chondromalacia,
 32 channel coils for; head, neck spine and leg array for vascular assessment,
 16 channel coils for wrist and knee which improves image quality,
 16 channel body array provides better anatomical coverage.
4
Market Demand
National Trends
MR utilization is expected to continue to experience strong growth over the next several years, especially on the
outpatient side. Nationally, SG2 is projecting 44% increase in outpatient MR procedures between 2008 and 2018.
Drivers for future MR growth include:






Angiographic studies
Cardiac imaging
Cancer applications
Spectroscopy
Functional and metabolic studies
Guidance for surgical and interventional procedures
Cardiovascular diagnostic procedures, such as ECHO and cardiac nuclear medicine, are increasingly migrating to
MR.
Market Projections
Methodology
Local market growth projections are provided by Thomson. Thomson provides two methods for projecting future
healthcare services.
1. The first method uses past utilization and projected population growth rates to predict future utilization.
2. The second method includes the population and utilization patterns, but also includes factors that
account for technology and practice patterns. The technology forecast makes several assumptions about
diffusion of technology and practice patterns over the next five years.
The analysis includes three models: 1) a population projection as a very conservative estimate, 2) the technology
projection as a very aggressive estimate, and 3) a median estimate between the two.
5
HOSPITAL A’s Outpatient Patient Origin
The highest concentration of HOSPITAL A’s outpatient visits reside within the traditional service area and slightly
beyond.
HOSPITAL A 2009 Outpatient Patient Origin
Outpatient MRI Procedure Projections - HOSPITAL A Service Area
Based on the mid-point estimates between Thomson’s population and technology projections, HOSPITAL A’s
primary service area (PSA) is projected to increase its annual MR utilization by over 5,600 cases between 2009 and
2014, while the total service area (TSA) is projected to increase its annual MR utilization by almost 11,000 cases.
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
6
5-Mile Radius
Using a 5-mile radius around HOSPITAL A/HEALTH SYSTEM and the Thomson mid-point estimate, cases are
projected to increase by over 2,000 annually between 2009 and 2014.
Thomson Outpatient Projections (Population)
2006
2007
2008
2009
2010
2011
2012
2013
2014
ACMC Service Area
Procedures Procedures Procedures Procedures Procedures Procedures Procedures Procedures Procedures
5-Mile Radius
40,484
40,412
40,339
40,267
40,195
40,123
40,051
39,979
39,907
Thomson Outpatient Projections w/Technology Estimates
2006
2007
2008
2009
2010
2011
2012
2013
2014
ACMC Service Area
Procedures Procedures Procedures Procedures Procedures Procedures Procedures Procedures Procedures
5-Mile Radius
37,788
38,597
39,423
40,267
41,111
41,973
42,853
43,751
44,668
Thomson Outpatient Projections Midpoint Between Population and Technology Estimates
2006
2007
2008
2009
2010
2011
2012
2013
2014
ACMC Service Area
Procedures Procedures Procedures Procedures Procedures Procedures Procedures Procedures Procedures
5-Mile Radius
39,136
39,504
39,881
40,267
40,653
41,048
41,452
41,865
42,288
7
Market Saturation
Based on the market saturation analysis below, the market supports the need for seven additional scanners by
2014 and the addition of a third MRI machine at HOSPITAL A/HEALTH SYSTEM.
Saturation Models
Scenarios A & B offer projections for HOSPITAL A’s TSA, Scenarios C & D offer projections for HOSPITAL A’s PSA,
and Scenarios E & F offer projections for the 5-mile area surrounding HOSPITAL A/HEALTH SYSTEM.
Demand is based on a moderate or aggressive MR utilization in the market. The moderate assumption is based on
all local MR facilities providing services for 40 hours per week. The aggressive assumption is based on all local MR
facilities providing services for 80 hours per week.
Scenarios A, C and E are based on the midpoint between Thomson’s population-based and technology-based
projections. Scenarios B, D, and F are based on Thomson’s technology-based utilization projections.
Scenario
Scenario
Scenario
Scenario
Scenario
Scenario
A
B
C
D
E
F
ACMC market share
was kept flat in
projected years based
on 2009 actual.
ACMC market share was
kept flat in projected
years based on 2009
actual.
ACMC market share was
kept flat in projected
years based on 2009
actual.
ACMC market share was
kept flat in projected
years based on 2009
actual.
ACMC market share was
kept flat in projected
years based on 2009
actual.
ACMC market share was
kept flat in projected
years based on 2009
actual.
ACMC Total Service
ACMC Total Service Area:
ACMC Primary Service
Area: Currently there
ACMC Primary Service
Area: Currently there are
ACMC 5-Mile Service Area:
ACMC 5-Mile Service
Area: Currently there are
are an estimated 23 MRI
machines (including
ACMC’s 2 scanners) in
operation within the
primary service area.
an estimated 23 MRI
machines (including ACMC’s
2 scanners) in operation
within the primary service
area.
Mid-point between
Thomson 5-year
population-based and
technology-based
projections.
Thomson 5-year
technology-based
utilization projections.
Scenarios
Market Share
Market Service
Area
Market
Projections
Area: Currently there
are an estimated 34 MRI
machines (including
ACMC’s 2 scanners) in
operation within the
primary service area.
Mid-point between
Thomson 5-year
population-based and
technology-based
projections.
Currently there are an
estimated 34 MRI machines
(including ACMC’s 2
scanners) in operation
within the primary service
area.
Thomson 5-year
technology-based
utilization projections.
Currently there are an
estimated 12 MRI machines
(including ACMC’s 2 scanners)
in operation within the 5-mile
service area.
Mid-point between
Thomson 5-year
population-based and
technology-based
projections.
an estimated 12 MRI
machines (including ACMC’s
2 scanners) in operation
within the 5-mile service
area.
Thomson 5-year
technology-based
utilization projections.
Moderate Assumption:
Moderate Assumption:
Moderate Assumption:
Moderate Assumption:
Moderate Assumption:
Moderate Assumption:
(all competition is open 60
hours per week)
0.9 scanners
(all competition is open 60
hours per week)
2.9 scanners
(all competition is open 60
hours per week)
-2.6 scanners
(all competition is open 60
hours per week)
-1.5 scanners
(all competition is open 60 hours
per week)
-1.8 scanners
(all competition is open 60
hours per week)
1.4 scanners
Aggressive Assumption:
Aggressive Assumption:
Aggressive Assumption:
Aggressive Assumption:
Aggressive Assumption:
Aggressive Assumption:
(all competition is open 80
hours per week)
14.4 scanners
(all competition is open 80
hours per week)
17.2 scanners
(all competition is open 80
hours per week)
5.2 scanners
(all competition is open 80
hours per week)
6.8 scanners
(all competition is open 80 hours
per week)
2.1 scanners
(all competition is open 80
hours per week)
2.9 scanners
2014 Need
By 2014, based on the moderate assumption, the need is projected to be 0.9 to 2.9 scanners in HOSPITAL A’s TSA,
an excess of 1.5 to 2.6 scanners in HOSPITAL A’s PSA, and an excess of 1.8 to a need of 1.4 scanners in the 5-mile
area surrounding HOSPITAL A/HEALTH SYSTEM.
However, based on the aggressive assumption, there is a projected need of 14.4 to 17.2 scanners in HOSPITAL A’s
TSA, a need of 5.2 to 6.8 scanners in HOSPITAL A’s PSA, and a demand of 2.1 to 2.9 scanners in the 5-mile area
surrounding HOSPITAL A/HEALTH SYSTEM. See appendix for additional details.
The limitation of this model is that it fails to account for the different types of scanners used in the market. The
majority of the MR units operating within the 5-mile radius, PSA and TSA are open units. These units have magnet
field strengths of between 0.2T and 0.35T. These units do not offer the scanning capabilities to adequately meet
the needs of the patients receiving care at HOSPITAL A/HEALTH SYSTEM.
8
Competitor Inventory
There are an estimated 31 scanners in HOSPITAL A’s TSA (9 scanners are located within 5 miles of HOSPITAL
A/HEALTH SYSTEM and 24 scanners are located within HOSPITAL A’s PSA (including the 5-mile). However, 20 of
these scanners are open units.
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
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 Unit Type(s)
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
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
*Located within 5-mile radius of ACMC/AHCH
9
Productivity
HOSPITAL A/HEALTH SYSTEM MR Utilization Compared to Select Chicago Hospitals
HOSPITAL A/HEALTH SYSTEM performed 10,543 MR procedures in 2008. Of those, 48.9% were performed on
inpatients. When compared to other Advocate’s hospitals, Chicago area academic institutions, and other local
competitors, HOSPITAL A/HEALTH SYSTEM had the highest proportion of inpatient MR procedures.
Because of the inpatient demand, HOSPITAL A/HEALTH SYSTEM’s Imaging Center is unable to adequately serve the
MR needs of the rapidly growing outpatient segment. As a result, HOSPITAL A/HEALTH SYSTEM is limited in its
ability to provide “one-stop shop” services to patients receiving outpatient services. The patients who are turned
away also represent missed revenue opportunities for the organization.
HEALTH SYSTEM/HEALTH SYSTEM’s two MR units averaged 5,349 scans in 2008, which is the greatest volume per
unit of any hospital in the state of Illinois. HOSPITAL A/HEALTH SYSTEM performs nearly 900 more scans per unit
than the next highest hospital (Northwestern). The volume of procedures performed by the HOSPITAL A/HEALTH
SYSTEM MR units places these scanners at an elevated risk of mechanical or software failure when compared to
more moderately used units. Failure of one of these units would cause additional harm to patient throughput and
patient satisfaction for the Hospital. Unlike Northwestern, HOSPITAL A/HEALTH SYSTEM does not have additional
units capable of absorbing volume in the event that one unit becomes disabled.
Total MRI Procedures
Procedures per Unit
MRI Units*
2006
2007
2008
% IP in 2008
2006
2007
2008
2008
Admissions
2008 Onsite
Outpatient Visits
2008 ED
Visits
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
Hospital
*MRI units include owned in 2008, shared and contracted units
**Added a MRI unit
***Removed a MRI from operation
10
HOSPITAL A/HEALTH SYSTEM MR Utilization Compared to Select Chicago Hospitals in 2008
The chart below further illustrates the high proportion of inpatient MR procedures provided at HOSPITAL
A/HEALTH SYSTEM. In 2008, each MR unit at the HOSPITAL A/HEALTH SYSTEM Imaging Center averaged over 600
more inpatient procedures than was averaged at any other Illinois hospital. The hospital with the next highest
volume of inpatient scans per unit also resides in Hospital A’s south territory, South Suburban. When compared to
the academic medical centers, each unit averaged around 1,200 more inpatient scans per scanner than the highest
volume academic medical center (UIC).
Hospital
MRI Units*
Inpatient Procedures
O utpatient Procedures
Procedures per Unit
IP Procedures/Unit
O P Procedures/Unit
ACMC
Advocate
Advocate
Advocate
Advocate
Advocate
Advocate
Advocate
2
2
3
3
2
4
1
1
5,234
2,910
2,631
2,103
1,991
5,733
1,803
116
5,463
3,170
4,925
3,441
5,111
8,671
2,556
1,502
5,348.5
3,040.0
2,518.7
1,848.0
3,551.0
3,601.0
4,359.0
1,618.0
2,617.0
1,455.0
877.0
701.0
995.5
1,433.3
1,803.0
116.0
2,731.5
1,585.0
1,641.7
1,147.0
2,555.5
2,167.8
2,556.0
1,502.0
Loyola
Northwestern
Rush
University of Chicago
University of Illinois
5
11
4
6
3
3,083
10,226
3,828
4,120
1,751
11,751
38,699
8,255
13,175
8,324
2,966.8
4,447.7
3,020.8
2,882.5
3,358.3
616.6
929.6
957.0
686.7
583.7
2,350.2
3,518.1
2,063.8
2,195.8
2,774.7
Little Com pany
Palos Community
Holy Cross
South Shore
Silver Cross
Ingalls
Roseland
MetroSouth
1
0
1
1
2
5
1
1
1,420
0
597
31
2,276
4,813
28
1,534
2,129
0
1,088
0
5,336
3,345
41
1,352
3,549.0
0.0
1,685.0
31.0
3,806.0
1,631.6
69
2,886.0
1,420.0
0.0
597.0
31.0
1,138.0
962.6
28.0
1,534.0
2,129.0
0.0
1,088.0
0.0
2,668.0
669.0
41.0
1,352.0
Condell
Good Samaritan
Good Shepherd
Illinois Masonic
Lutheran General
South S uburban
Trinity Hospital
Source: IDPH
*MRI units include owned, shared and contracted units
To further illustrate the tremendous output provided by the units at HOSPITAL A/HEALTH SYSTEM, the two
scanners produced 2,732 outpatient scans per unit, trailing only Northwestern and University of Illinois Medical
Center. Overall, HOSPITAL A/HEALTH SYSTEM’s MR units averaged almost 5,350 procedures, nearly 900 more
procedures than the units at the hospital with the next highest per unit average (Northwestern).
11
Internal Assessment
Clinical Applications
Outpatient MR Procedures
Although growth opportunities have been limited, MR outpatient growth at HOSPITAL A/HEALTH SYSTEM has still
occurred. Outpatient neuroscience cases have nearly doubled from 2007 and 2009, while orthopedics and
oncology have both experienced increased volumes between 2007 and 2009.
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
Inpatient MR Procedures
The Imaging Center provides scans for patients being treated across a wide range of services and service lines.
Since 2007, 39.9% of HOSPITAL A/HEALTH SYSTEM inpatient cases were for neurosciences. Oncology cases also
increased over the last three years, suggesting increased cancer applications for MR.
Service Line
Neurosciences
Orthopedics
Cardiovascular
Oncology
Other
Total
2007
2008
2009
Total
1,795 (37.5%)
512 (10.7%)
556 (11.6%)
225 (4.7%)
1,694 (35.4%)
4,782 (100%)
2,141 (40.9%)
561 (10.7%)
516 (9.9%)
236 (4.5%)
1,780 (34.0%)
5,234 (100%)
1,982 (41.2%)
456 (9.5%)
508 (10.6%)
264 (5.5%)
1,596 (33.2%)
4,806 (100%)
5,918 (39.9%)
1,529 (10.3%)
1,580 (10.7%)
725 (4.9%)
5,070 (34.2%)
14,822 (100%)
Note: Inpatient Service Lines based on Corporate service line definitions (MS-DRGs)
Payer Mix
Between 2007 and 2009, over 62% of the outpatient MR procedures were managed care. Like the inpatient MR
payer mix, the Medicaid mix increased over the last three years, however the outpatient self pay mix increased
over the period.
O/P
Managed Care
Medicaid
Medicare
Selt Pay
Total
2007
63.1%
14.5%
20.8%
1.5%
100.0%
2008
62.9%
16.2%
19.2%
1.7%
100.0%
2009
60.9%
16.9%
19.6%
2.6%
100.0%
Total
62.3%
15.9%
19.9%
2.0%
100.0%
12
Volume Projections
Historical Growth
Between 2006 and 2008, outpatient MR procedures increased by 4.2% at HOSPITAL A/HEALTH SYSTEM.
MR Procedures
2006
2007
2008
CAGR
Outpatient
5,030
5,180
5,453
4.20%
Source: IDPH
CAGR Formula (Ending Year / Beginning Year) ^ (1 / number of years) - 1
1
Projected Growth
Data Sources:
 Historical annual growth rate.
 Thomson midpoint outpatient MR market projections.
 Professional judgment.
Growth Assumptions:
 Baseline volumes are based on calendar year 2009 utilization.
 An annual growth rate of 7.5% is assumed for Year 1 of operation, and 7.5% each year following.
 Without the additional MR unit, growth would stagnate or possibly decline.
 New 1.5T unit will begin operations in Year 1.
 Mobile MR Unit has a 30-month lease and is expected to be taken offline the 2nd half of year 2.
 The projected hospital-based MR volume is distributed among the 2 current units plus the new 1.5T unit in
Year 1 and beyond.
Growth is projected to increase 7.5% per year after the addition of the MR unit. HOSPITAL A/HEALTH SYSTEM is
projecting 9,021 outpatient MR procedures by Year 5.
MR Procedures
Baseline
2009
Est. 2010
Year 1
Year 2
Year 3
Year 4
Year 5
Hospital-Based MR
Mobile MR
Total Outpatient
5,845
0
5,845
5,142
1,613
6,755
6,395
867
7,261
7,806
0
7,806
8,391
0
8,391
9,021
0
9,021
4,783
1,500
6,283
Baseline Source: TSI
13
Project Alternatives
Alternative A: Do Nothing (Not Recommended)
Under the “Do Nothing” alternative, HOSPITAL A/HEALTH SYSTEM would attempt to maintain its existing MR
scanners without adding an additional 1.5 Tesla scanner.
This alternative is the least expensive in the short term, but over the long term is a more expensive option as the
current scanners continue to age. The volume of procedures performed by the HOSPITAL A/HEALTH SYSTEM
MR units places these scanners at an elevated risk of mechanical or software failure when compared to more
moderately used units. Failure of one of these units without a backup scanner would cause additional harm to
patient throughput and patient satisfaction for the Hospital. This option would not allow for growth, HOSPITAL
A/HEALTH SYSTEM would remain at capacity and continue to turn-away patients and physician referrals;
therefore this alternative would be the most detrimental to HOSPITAL A/HEALTH SYSTEM’s operations,
financial and community service viability.
Alternative B: Upgrade Existing MR Technology to 3.0 Tesla (Recommended as 2nd Phase)
The “Upgrade Existing Technology to 3.0 Tesla” alternative would allow HOSPITAL A/HEALTH SYSTEM to
perform more complex scans that cater to services such as Neurosurgery and Oncology. This option would allow
for more depth of service offerings supporting the Institutes. This option would not allow for growth of overall
volumes, HOSPITAL A/HEALTH SYSTEM would remain at capacity and continue to turn-away patients and
physician referrals, therefore this alternative would not be the first recommended. It would, however, be
recommended as phase 2 of the MR facility enhancements in order to continue to grow in HOSPITAL A/HEALTH
SYSTEM’s depth of service offerings.
Alternative B: Add Additional 1.5 Tesla MR (Recommended)
The “Relocate Add Additional 1.5 Tesla MR” alternative would create additional capacity for inpatient and
outpatient scans. This option would allow for small growth both in the inpatient and outpatient patient care settings,
but more importantly, allow for flexibility around scheduling inpatient scans.
This alternative would be the least expensive in the long-term and address patient throughput concerns at the
existing campus while also increasing patient and physician satisfaction with outpatient services.
14
Risk Factors
A detailed project risk grid is provided below.
Risk
Category
Current
Assumption
Rationale/Supporting
Market Trends
Volume
Projections
Budgeted volume
projections will be
achieved.
Volume projections
were based on
Thompson and
historical growth
assumptions.
Design/Scope
Changes and
Building Cost
Escalation
Contingency dollars
built into the overall
project budget.
Historical expertise.
Potential
Risk/Alternative
Scenario
Both inpatient and
outpatient volume is lost
during construction due
to continued capacity
issues, access and
patient/physician
satisfaction.
Unforeseen issues arise
during construction and it
is necessary to change the
scope or timeframe of the
project.
Material and labor costs
exceed budget as a result
of unforeseen factors.
Possible Outcomes
and Mitigating
Strategies
Project does not help
HOSPITAL
A/HEALTH SYSTEM
to achieve volume
and/or financial
forecasts.
Project does not help
HOSPITAL
A/HEALTH SYSTEM
to improve patient
throughput.
Continue to improve
quality and operational
processes.
Contingency dollars
were included based on
industry standards.
Capital costs increase
beyond contingency
levels.
Project is delayed and
construction phase is
extended.
Project does not meet
financial forecast.
Anticipate and act on
issues that may arise
during the construction
phase.
Explore options to
reduce cost and avoid
unanticipated changes
or price escalation.
15
Financial Analysis
16
Appendix
Market Demand – Total Service Area Population 5-Year Projection
For HOSPITAL A’s TSA, there is a currently (2009) an excess of 1.7 scanners based on the moderate assumption, but
a demand for 10.8 scanners based on the aggressive assumption. For HOSPITAL A’s PSA, there is a currently an
excess of 4.0 for the moderate assumption, but a need for 3.4 scanners for the aggressive assumption. For the 5mile area surrounding HOSPITAL A/HEALTH SYSTEM, there is a currently an excess of 2.3 scanners based on the
moderate assumption, but need for 1.4 scanners based on the aggressive assumption.
Advocate Christ MRI
TSA Market Saturation
Scenario A: Midpoint Between Thomson 5yr population projection and technology projection
MRI
Current # of
Scanners
2009 Required
Scanners
Current Need
2014 Required
Scanners
Future Need
Moderate: Assumming all competition is open
40 hrs per week.
ACMC TSA
34
32
-1.7
35
0.9
Aggressive: Assumming all competition is
open 80 hrs per week.
ACMC TSA
34
45
10.8
48
14.4
ACMC
Outpatient Market Demand
2009
134,273
A
Inpatient Market Demand
Total Market Demand
2010
136,359
2011
138,496
2012
140,684
2013
142,925
2014
145,220
14,145
14,626
15,123
15,638
16,169
16,719
148,418
150,985
153,619
156,322
159,094
161,939
10,651
16,968
17,544
18,142
18,758
19,396
9,181
14,626
15,123
15,638
16,169
16,719
Est ACMC Volumes
B
Est ACMC TSA IP/OP Market Volumes
Est IP/OP Market Share
10.5%
10.7%
10.9%
11.1%
11.3%
2.9%
2.9%
2.9%
2.9%
2.9%
Estimated Available Market Share
MRI's in TSA (34)
11.5%
2.9%
4,365
4,441
4,518
4,598
4,679
4,763
2009
10,651
2010
11,013
2011
11,388
2012
11,775
2013
12,175
2014
12,589
144
144
144
144
144
144
52
52
52
52
52
52
MRIs per week
205
212
219
226
234
242
Capacity per week (2 machines)
288
288
288
288
288
288
% Capacity
71%
74%
76%
79%
81%
84%
Productivity Estimates
C Estimated Total Volumes
Operating Hours/Week (2 machines)
Operating Weeks per year
# MRI needed in area (100% capacity)
Moderate Demand
2009
Aggressive Demand
2010
2011
2012
2013
2014
32.3
32.8
33.3
33.8
34.4
34.9
44.8
45.5
46.2
46.9
47.6
48.4
Market Saturation is combined with MRIs in the market that do both Inpatients and Outpatients.
Estimated 34 current MRIs within ACMC's TSA.
A
B
C
Growth projections based on 2006-2008 CAGR for market IP MRI Utilization for all hospitals present in ACMC's TSA (IDPH)
Based on between 2007-2009, 86.2% of ACMC's MRI cases came from ACMC's TSA
Growth projections based on 2007-2009 CAGR for ACMC IP and OP MRI Utilization.
Ambulatory Imaging Estimates
Est. Capacity per outpatient machine,
exams/hour
Visit/hr
Hours open
Weeks Open
Total Visit
Potential
Outpatient
1
40
50
2,000
Outpatient
1
60
50
3,000
Moderate
Inpatient/Outpatient
1
80
52
4,160
Aggressive
2 MRIs
Inpatient
4,806
45%
Outpatient
5,845
55%
Total
10,651
Market Demand
Source: System Ambulatory/Imaging Services
Ave
2009 ACMC MRI Volumes
3,053
Volume / Unit
5,326
Source: TSI
17
Market Demand – Total Service Area Technology 5-Year Projection
TSA Market Saturation
Scenario B: Thomson 5yr technology projection
MRI
Current # of
Scanners
2009 Required
Scanners
Current Need
2014 Required
Scanners
Future Need
Moderate: Assumming all competition is open
40 hrs per week.
ACMC TSA
34
32
-1.7
37
2.9
Aggressive: Assumming all competition is
open 80 hrs per week.
ACMC TSA
34
45
10.8
51
17.2
ACMC
Outpatient Market Demand
2009
134,273
A
Inpatient Market Demand
Total Market Demand
2010
137,908
2011
141,641
2012
145,476
2013
149,414
2014
153,459
14,145
14,626
15,123
15,638
16,169
16,719
148,418
152,534
156,764
161,114
165,583
170,178
10,651
16,968
17,544
18,142
18,758
19,396
9,181
14,626
15,123
15,638
16,169
16,719
Est ACMC Volumes
B
Est ACMC TSA IP/OP Market Volumes
Est IP/OP Market Share
10.5%
10.6%
10.7%
10.7%
10.8%
2.9%
2.9%
2.9%
2.9%
2.9%
Estimated Available Market Share
MRI's in TSA (34)
10.9%
2.9%
4,365
4,486
4,611
4,739
4,870
5,005
2009
10,651
2010
11,013
2011
11,388
2012
11,775
2013
12,175
2014
12,589
144
144
144
144
144
144
52
52
52
52
52
52
MRIs per week
205
212
219
226
234
242
Capacity per week (2 machines)
288
288
288
288
288
288
% Capacity
71%
74%
76%
79%
81%
84%
Productivity Estimates
C
Estimated Total Volumes
Operating Hours/Week (2 machines)
Operating Weeks per year
# MRI needed in area (100% capacity)
Moderate Demand
2009
Aggressive Demand
2010
2011
2012
2013
2014
32.3
33.2
34.0
35.0
35.9
36.9
44.8
46.0
47.2
48.5
49.8
51.2
Market Saturation is combined with MRIs in the market that do both Inpatients and Outpatients.
Estimated 34 current MRIs within ACMC's TSA.
A
B
C
Growth projections based on 2006-2008 CAGR for market IP MRI Utilization for all hospitals present in ACMC's TSA (IDPH)
Based on between 2007-2009, 86.2% of ACMC's MRI cases came from ACMC's TSA
Growth projections based on 2007-2009 CAGR for ACMC IP and OP MRI Utilization.
Ambulatory Imaging Estimates
Est. Capacity per outpatient machine,
exams/hour
Visit/hr
Hours open
Weeks Open
Total Visit
Potential
Outpatient
1
40
50
2,000
Outpatient
1
60
50
3,000
Moderate
Inpatient/Outpatient
1
80
52
4,160
Aggressive
2 MRIs
Inpatient
4,806
45%
Outpatient
5,845
55%
Total
10,651
Volume / Unit
5,326
Market Demand
Source: System Ambulatory/Imaging Services
2009 ACMC MRI Volumes
Source: TSI
18
Market Demand – Primary Service Area Population 5-Year Projection
PSA Market Saturation
Scenario C: Midpoint Between Thomson 5yr population projection and technology projection
Market
Current # of
Scanners
2009 Required
Scanners
Current Need
2014 Required
Scanners
Future Need
Moderate: Assumming all competition is open
40 hrs per week.
ACMC PSA
23
19
-4.0
20
-2.6
Aggressive: Assumming all competition is
open 80 hrs per week.
ACMC PSA
23
26
3.4
28
5.2
ACMC
Outpatient Market Demand
2009
79,068
A
2010
80,150
2011
81,258
2012
82,391
2013
83,550
2014
84,737
Inpatient Market Demand
Total Market Demand
7,401
7,653
7,913
8,182
8,460
8,748
86,469
87,803
89,171
90,573
92,010
93,485
Est ACMC Volumes
10,651
10,286
10,636
10,997
11,371
11,758
7,924
7,653
7,913
8,182
8,460
8,748
10.3%
B
Est ACMC PSA IP/OP Market Volumes
Est IP/OP Market Share
Estimated Available Market Share
MRI's in PSA (23)
9.4%
9.5%
9.7%
9.9%
10.1%
4.3%
4.3%
4.3%
4.3%
4.3%
4.3%
3,760
3,818
3,877
3,938
4,000
4,065
2009
10,651
2010
11,013
2011
11,388
2012
11,775
2013
12,175
2014
12,589
144
144
144
144
144
144
52
52
52
52
52
52
MRIs per week
205
212
219
226
234
242
Capacity per week (2 machines)
288
288
288
288
288
288
% Capacity
71%
74%
76%
79%
81%
84%
Productivity Estimates
C
Estimated Total Volumes
Operating Hours/Week (2 machines)
Operating Weeks per year
# MRI needed in area (100% capacity)
Moderate Demand
2009
Aggressive Demand
2010
2011
2012
2013
2014
19.0
19.3
19.5
19.8
20.1
20.4
26.4
26.7
27.1
27.5
27.9
28.2
Market Saturation is combined with MRIs in the market that do both Inpatients and Outpatients.
Estimated 24 current MRIs within ACMC's PSA.
A
B
C
Growth projections based on 2006-2008 CAGR for market IP MRI Utilization for all hospitals present in ACMC's PSA (IDPH)
Based on between 2007-2009, 74.4% of ACMC's MRI cases came from ACMC's PSA
Growth projections based on 2007-2009 CAGR for ACMC IP and OP MRI Utilization.
Ambulatory Imaging Estimates
Est. Capacity per outpatient machine,
exams/hour
Visit/hr
Hours open
Weeks Open
Total Visit
Potential
Outpatient
1
40
50
2,000
Outpatient
1
60
50
3,000
Moderate
Inpatient/Outpatient
1
80
52
4,160
Aggressive
2 MRIs
Inpatient
4,806
45%
Outpatient
5,845
55%
Total
10,651
Volume / Unit
5,326
Market Demand
Source: System Ambulatory/Imaging Services
2009 ACMC MRI Volumes
Source: TSI
19
Market Demand – Primary Service Area Technology 5-Year Projection
PSA Market Saturation
Scenario D: Thomson 5yr technology projection
Market
Current # of
Scanners
2009 Required
Scanners
Current Need
2014 Required
Scanners
Future Need
Moderate: Assumming all competition is open
40 hrs per week.
ACMC PSA
23
19
-4.0
22
-1.5
Aggressive: Assumming all competition is
open 80 hrs per week.
ACMC PSA
23
26
3.4
30
6.8
ACMC
Outpatient Market Demand
2009
79,068
A
2010
81,055
2011
83,091
2012
85,179
2013
87,319
2014
89,513
Inpatient Market Demand
Total Market Demand
7,401
7,653
7,913
8,182
8,460
8,748
86,469
88,708
91,004
93,361
95,779
98,261
Est ACMC Volumes
10,651
10,286
10,636
10,997
11,371
11,758
7,924
7,653
7,913
8,182
8,460
8,748
B
Est ACMC PSA IP/OPMarket Volumes
Est IP/OP Market Share
Estimated Available Market Share
MRI's in PSA (23)
9.4%
9.4%
9.5%
9.6%
9.7%
4.3%
4.3%
4.3%
4.3%
4.3%
9.8%
4.3%
3,760
3,857
3,957
4,059
4,164
4,272
2009
10,651
2010
11,013
2011
11,388
2012
11,775
2013
12,175
2014
12,589
144
144
144
144
144
144
52
52
52
52
52
52
MRIs per week
205
212
219
226
234
242
Capacity per week (2 machines)
288
288
288
288
288
288
% Capacity
71%
74%
76%
79%
81%
84%
Productivity Estimates
C
Estimated Total Volumes
Operating Hours/Week (2 machines)
Operating Weeks per year
# MRI needed in area (100% capacity)
Moderate Demand
2009
Aggressive Demand
2010
2011
2012
2013
2014
19.0
19.5
20.0
20.5
21.0
21.5
26.4
27.0
27.7
28.4
29.1
29.8
Market Saturation is combined with MRIs in the market that do both Inpatients and Outpatients.
Estimated 24 current MRIs within ACMC's PSA.
A
B
C
Growth projections based on 2006-2008 CAGR for market IP MRI Utilization for all hospitals present in ACMC's PSA (IDPH)
Based on between 2007-2009, 74.4% of ACMC's MRI cases came from ACMC's PSA
Growth projections based on 2007-2009 CAGR for ACMC IP and OP MRI Utilization.
Ambulatory Imaging Estimates
Est. Capacity per outpatient machine,
exams/hour
Visit/hr
Hours open
Weeks Open
Total Visit
Potential
Outpatient
1
40
50
2,000
Outpatient
1
60
50
3,000
Moderate
Inpatient/Outpatient
1
80
52
4,160
Aggressive
2 MRIs
Inpatient
4,806
45%
Outpatient
5,845
55%
Total
10,651
Volume / Unit
5,326
Market Demand
Source: System Ambulatory/Imaging Services
2009 ACMC MRI Volumes
Source: TSI
20
Market Demand – 5 Mile Radius Population 5-Year Projection
5-Mile Market Saturation
Scenario E: Midpoint Between Thomson 5yr population projection and technology projection
Market
Current # of
Scanners
2009 Required
Scanners
Current Need
2014 Required
Scanners
Future Need
Moderate: Assumming all competition is open
40 hrs per week.
ACMC 5-mile
12
10
-2.3
10
-1.8
Aggressive: Assumming all competition is
open 80 hrs per week.
ACMC 5-mile
12
13
1.4
14
2.1
ACMC
Outpatient Market Demand
2009
40,267
A
2010
40,653
2011
41,048
2012
41,452
2013
41,865
2014
42,288
Inpatient Market Demand
Total Market Demand
7,401
7,653
7,913
8,182
8,460
8,748
47,668
48,306
48,961
49,634
50,325
51,036
Est ACMC Volumes
10,651
14,358
14,846
15,351
15,872
16,413
5,677
7,653
7,913
8,182
8,460
8,748
18.4%
18.8%
19.3%
19.7%
20.2%
20.7%
8.3%
8.3%
8.3%
8.3%
8.3%
B
Est ACMC 5-mile IP/OP Market Volumes
Est IP/OP Market Share
Estimated Available Market Share
MRI's in 5-mile (12)
Productivity Estimates
C
Estimated Total Volumes
Operating Hours/Week (2 machines)
8.3%
3,972
4,025
4,080
4,136
4,194
4,253
2009
10,651
2010
11,013
2011
11,388
2012
11,775
2013
12,175
2014
12,589
144
144
144
144
144
52
52
52
52
52
52
MRIs per week
205
212
219
226
234
242
Capacity per week (2 machines)
288
288
288
288
288
288
% Capacity
71%
74%
76%
79%
81%
84%
# MRI needed in area (100% capacity)
Moderate Demand
2009
9.7
2010
9.8
2011
9.9
2012
10.0
2013
10.1
2014
10.2
Aggressive Demand
13.4
13.6
13.7
13.8
14.0
14.1
Operating Weeks per year
144
Market Saturation is combined with MRIs in the market that do both Inpatients and Outpatients.
Estimated 12 current MRIs with in 5 miles of ACMC.
A
B
C
Growth projections based on 2007-2009 CAGR for market IP MRI Utilization
Based on between 2007-2009, 53.3% of ACMC's MRI cases came from within ACMC's 5-mile radius
Growth projections based on 2007-2009 CAGR for ACMC IP and OP MRI Utilization.
Ambulatory Imaging Estimates
Est. Capacity per outpatient machine,
exams/hour
Visit/hr
Hours open
Weeks Open
Total Visit
Potential
Outpatient
1
40
50
2,000
Outpatient
1
60
50
3,000
Moderate
Inpatient/Outpatient
1
80
52
4,160
Aggressive
2 MRIs
Inpatient
4,806
45%
Outpatient
5,845
55%
Total
10,651
Market Demand
Source: System Ambulatory/Imaging Services
Ave
2009 ACMC MRI Volumes
3,053
Volume / Unit
5,326
Source: TSI
21
Market Demand – 5 Mile Radius Technology 5-Year Projection
5-Mile Market Saturation
Scenario F: Thomson 5yr technology projection
Market
Current # of
Scanners
2009 Required
Scanners
Current Need
2014 Required
Scanners
Future Need
Moderate: Assumming all competition is open
40 hrs per week.
ACMC 5-mile
12
10
-2.3
11
-1.3
Aggressive: Assumming all competition is
open 80 hrs per week.
ACMC 5-mile
12
13
1.4
15
2.9
ACMC
2009
40,267
Outpatient Market Demand
A
2010
41,111
2011
41,973
2012
42,853
2013
43,751
2014
44,668
Inpatient Market Demand
Total Market Demand
7,401
7,653
7,913
8,182
8,460
8,748
47,668
48,764
49,886
51,035
52,211
53,416
Est ACMC Volumes
10,651
14,358
14,846
15,351
15,872
16,413
5,677
7,653
7,913
8,182
8,460
8,748
18.4%
18.6%
18.9%
19.1%
19.3%
19.6%
8.3%
8.3%
8.3%
8.3%
8.3%
B
Est ACMC 5-mile IP/OP Market Volumes
Est IP/OP Market Share
Estimated Available Market Share
MRI's in 5-mile (12)
Productivity Estimates
C
Estimated Total Volumes
Operating Hours/Week (2 machines)
8.3%
3,972
4,064
4,157
4,253
4,351
4,451
2009
10,651
2010
11,013
2011
11,388
2012
11,775
2013
12,175
2014
12,589
144
144
144
144
144
52
52
52
52
52
52
MRIs per week
205
212
219
226
234
242
Capacity per week (2 machines)
288
288
288
288
288
288
% Capacity
71%
74%
76%
79%
81%
84%
# MRI needed in area (100% capacity)
2009
2010
2011
2012
2013
2014
9.7
9.9
10.1
10.3
10.5
10.7
13.4
13.7
14.0
14.3
14.6
14.9
Operating Weeks per year
Moderate Demand
Aggressive Demand
144
Market Saturation is combined with MRIs in the market that do both Inpatients and Outpatients.
Estimated 12 current MRIs with in 5 miles of ACMC.
A
B
C
Growth projections based on 2007-2009 CAGR for market IP MRI Utilization
Between 2007-2009, 53.3% of ACMC's MRI cases came from within ACMC's 5-mile radius
Growth projections based on 2007-2009 CAGR for ACMC IP and OP MRI Utilization (TSI)
Ambulatory Imaging Estimates
Est. Capacity per outpatient machine,
exams/hour
Visit/hr
Hours open
Weeks Open
Total Visit
Potential
Outpatient
1
40
50
2,000
Outpatient
1
60
50
3,000
Moderate
Inpatient/Outpatient
1
80
52
4,160
Aggressive
2 MRIs
Inpatient
4,806
45%
Outpatient
5,845
55%
Market Demand
Source: System Ambulatory/Imaging Services
Ave
2009 ACMC MRI Volumes
Total
10,651
3,053
Volume / Unit
5,326
Source: TSI
22
MR Utilization among select Chicago Hospitals in 2006
MRI Units*
Inpatient
Procedures
Outpatient
Procedures
ACMC
Advocate Condell
Advocate Good Samaritan
Advocate Good Shepherd
Advocate Illinois Masonic
Advocate Lutheran General
Advocate South Suburban
Advocate Trinity Hospital
2
3
2
1
1
5
2
1
4,611
4,087
2,451
1,010
2,205
5,625
2,167
133
5,030
6,550
4,024
1,011
4,518
1,662
2,404
1,602
4,820.5
3,545.7
3,237.5
2,021.0
6,723.0
1,457.4
2,285.5
1,735.0
2,305.5
1,362.3
1,225.5
1,010.0
2,205.0
1,125.0
1,083.5
133.0
2,515.0
2,183.3
2,012.0
1,011.0
4,518.0
332.4
1,202.0
1,602.0
Loyola
Northwestern
Rush
University of Chicago
University of Illinois
4
9
4
6
3
2,086
11,180
4,193
3,370
3,617
9,511
36,033
7,982
10,877
7,064
2,899.3
5,245.9
3,043.8
2,374.5
3,560.3
521.5
1,242.2
1,048.3
561.7
1,205.7
2,377.8
4,003.7
1,995.5
1,812.8
2,354.7
Little Company
Palos Community
Holy Cross
South Shore
Silver Cross
Ingalls
Roseland
MetroSouth
0
0
1
1
3
5
1
4
0
0
597
43
2,278
4,919
17
1,690
0
0
1,088
0
5,251
8,861
127
1,239
0.0
0.0
1,685.0
43.0
2,509.7
2,756.0
144
732.3
0.0
0.0
597.0
43.0
759.3
983.8
17.0
422.5
0.0
0.0
1,088.0
0.0
1,750.3
1,772.2
127.0
309.8
Hospital
Procedures per IP Procedures OP Procedures
Unit
per Unit
per Unit
Source: IDPH (except for ACMC in 2009, where TSI data is used)
*MRI units include owned, shared and contracted units
MRI Utilization among select Chicago Hospitals in 2007
MRI Units*
Inpatient
Procedures
Outpatient
Procedures
ACMC
Advocate Condell
Advocate Good Samaritan
Advocate Good Shepherd
Advocate Illinois Masonic
Advocate Lutheran General
Advocate South Suburban
Advocate Trinity Hospital
2
3
2
1
1
4
2
1
4,705
3,656
2,450
2,072
1,908
5,361
1,985
1,200
5,182
4,813
4,111
2,941
4,511
6,535
2,500
1,289
4,943.5
2,823.0
3,280.5
5,013.0
6,419.0
2,974.0
2,242.5
2,489.0
1.1
1.3
1,225.0
2,072.0
1,908.0
1,340.3
992.5
1,200.0
1.1
0.8
2,055.5
2,941.0
4,511.0
1,633.8
1,250.0
1,289.0
Loyola
Northwestern
Rush
University of Chicago
University of Illinois
5
11
4
6
3
2,265
9,856
3,623
4,124
3,843
13,708
42,412
8,336
12,108
7,668
3,194.6
4,751.6
2,989.8
2,705.3
3,837.0
453.0
896.0
905.8
687.3
1,281.0
2,741.6
3,855.6
2,084.0
2,018.0
2,556.0
Little Company
Palos Community
Holy Cross
South Shore
Silver Cross
Ingalls
Roseland
MetroSouth
1
706
0
608
43
2,278
5,099
15
1,941
706
0
1,015
0
4,904
9,579
27
1,306
1,412.0
0.0
1,623.0
43.0
3,591.0
2,935.6
42
811.8
706.0
0.0
608.0
43.0
1,139.0
1,019.8
15.0
485.3
706.0
0.0
1,015.0
0.0
2,452.0
1,915.8
27.0
326.5
Hospital
1
1
2
5
1
4
Procedures per IP Procedures OP Procedures
Unit
per Unit
per Unit
Source: IDPH (except for ACMC in 2009, where TSI data is used)
*MRI units include owned, shared and contracted units
23
Mobile MR and Lockport MR 2009 volume trends
MR Procedures
Mobile MR
Lockport
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Average
Annualized Total
N/A
28
N/A
36
N/A
51
N/A
52
108
23
124
11
116
34
1,435
405
Source: ACMC Director of Radiology
SG2 Technology Roadmap
24