Pet/Ct vs Ct Purchase

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PET/CT vs. CT Purchase
Christine Parks
BUS: 640 Managerial Economics
Scott Shaw
December 17, 2012

Abstract
In my previous position I worked as the Administrator for a well-established outpatient diagnostic imaging facility. As the Administrator I was faced with having to make various decisions that utilized economics on a daily basis. The decisions that I would have to make would range from very simple to very complex purchases. Regardless of the amount of the purchase the same economic considerations were utilized prior to any purchases.

Introduction
In my previous position as Administrator for an outpatient imaging facility I was faced with various daily decision making tasks that would range from something as simple as a supply order that would cost the company a few hundred dollars, to the decision of final equipment purchases that could cost over a million dollars. One particular instance that I was faced with was to utilize additional space within the facility for a different imaging modality. The decision at the time was not completely left up to me, but was my responsibility to present which modality I thought would benefit the company and our patients the most, and how the best options to move forward with overseeing this project.

The facility offered various imaging services such as a positional stand up MRI, nuclear imaging, ultrasounds, and high quality x-rays. The new project was to fill the additional imaging room with a service based on my analysis. The options that I had were to bring in a new device to see a different set of patients, or to accommodate the high demand of MRI’s our facility saw each day and purchase another MRI machine to enable the business to complete twice as many MRI exams.

Over the course of three months I conducted various studies within the market to come to a final conclusion of the type of modality to purchase. The best option would be to be able to offer CT scans, and ultimately purchase a CT modality. As I was moving forward with preparing the presentation of why and how this project would come together I found that for an additional cost we could purchase a PET/CT scanner that would allow us to not only conduct two additional modalities with one scanner, we would also be able to enhance PET scans by combining them with CT scans (which was a great benefit to many oncologist who would send patients in for cancer scans). The decision now would be if the company should pursue the new CT scanner or a used PET/CT scanner. Executive Summary

Through the decision process and thorough analysis I chose to present the purchase of a used PET/CT scanner to occupy the empty exam room. In order to reach this decision the evaluation of cost benefits, and opportunity costs were considered. Extensive research was conducted within the market to understand the demand of the scanners, as well as understanding the current supply of this scanner within a specific radius from varied competitors. Understanding these concepts would be key in presenting this option, especially since it would add an additional cost $700,000.00 to the alternative purchase of the new CT scanner. The additional benefits of this modality, with supporting demographic data, would have to be included in the presentation to justify the additional cost, and for the CEO to understand why this would benefit the company, as well as its patients. Definition

The modality presentation provided information regarding the alternatives that the company could have chosen and what benefits those alternatives would bring. The presentation compared the chosen PET/CT modality to the other options and the purposes to why this would be the better choice for the business, and its profit margin. The other opportunities would need to be outlined so that the CEO would understand what other modalities were researched and reviewed, and why they were not selected as the chosen modality. The options that were...
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