Business plan LDR 609 Purchase of a ge revolution ct scanner Robyn Wright

Executive Summary The University of Michigan Health Systems CT Department services patients and physicians from across Michigan. Its fleet of 13 CT scanners operates 24/7 – 365 days of the year. Each CT scanner is placed on a seven year depreciation plan when purchased. In 2016 CT02, currently a GE Lightspeed VCT will have exceeded its depreciation date by 3 years. In order to maintain and expand our imaging departments high quality imaging, it is essential that we replace CT02 with the latest technology on the market. Our CT fleet continue to grow and advance as technology is ever advancing.

Proposal Purposed replacement is GE Revolution CT Scanner Purchase Replacement Scanner for CT Room 02 Current Scanner is GE Lightspeed VCT Current Scanner met UMHS 7 year depreciation schedule in 2013. Upgrade has already postponed 3 years Purposed replacement is GE Revolution CT Scanner

Market Analysis- Strength UMHS CT Staff is very knowledgeable with many years of GE scanner experience. Revolution CT System offers the latest in technology from GE Healthcare. New technology offer a multitude of benefits for our patients, imaging staff, radiologists, and referring physicians.

Market Analysis- Weakness New technology Learning curve for technologists with new technology. Completely new platform and scanner layout for technologists to learn. All protocols need to be rebuilt into scanner.

Market Analysis- Opportunity First local hospital with Revolution CT System Clinical Benefits Patient Benefits

Market Analysis- Threats New technology requiring a complete rebuild for all current protocols. Significantly time consuming and must be completed prior to beginning scanner clinical use. Down time for construction, instillation, and applications is a minimum of 12-16 weeks. Potential for unknown software problems with new technology.

Internal Assessment Current Lightspeed VCT has met depreciation. Revolution CT best option as it is the latest technology and is way of the future in GE scanner fleet options. Currently CT02 is used for inpatients. With Revolution it will be used for outpatients. Staffing levels can remain the same. New technology offer potential for better CTA imaging with lower or elimination of pre-medication. Dedicated Training for CT technologists, 3D imaging staff, and Radiologists needed. Software adjustments may be required for all GE Advantage Workstations.

Financial Analysis Year 2015 2016 2017 2018 2019 Exams 8,760 6745-13,490 (construction downtime) 8,760-17,520   Revenue $13,140,000 $10,117,500- $20,235,000 $13,140,000 - $26,280,000 Scanner Expenses/Depreciation $64,285 $500,000 Salary Expenses $165,000 Min Revenue $13,075,550 $9,452,500 $12,910,715 Max Revenue $19,570,000 $26,050,715 Outpatient scheduling grid open 12 hours a day, 7 days a week Inpatient and ER patients may be scanned during off hours. 2-4 body parts imaged in an hour. Scanner will be placed on UMHS seven year depreciation schedule

Implementation Plan Obtain and negotiate official quote from GE Healthcare. Construction and Install scheduled (12-16 weeks to complete) Reassign off hour inpatient slots to CT04 during downtime. Necessary Software Upgrades Complete Training Release for clinical use

References GE Healthcare (2015). Revolution CT- Clinical Benefits. Retrieved from: http://www3.gehealthcare.com/en/Products/Categories/Computed_Tomography/Revolution_CT# tabs/tabCBE960F89AC8482793C793A4EBFB8809 GE Healthcare (2015). Revolution CT- Patient Benefits. Retrieved from: http://www3.gehealthcare.com/en/Products/Categories/Computed_Tomography/Revolution_CT# tabs/tab1567C6256F2945BDBC9A4EF764B5E2A5 Business of Radiology 101. (2015). Income Statement: Depreciation and Amortization. Retrieved from: http://faculty.washington.edu/jmed/BusinessRadiology/income_DepAmort.html