creating a radiology business plan john j. mcgreevy m.b.a. rt ( r)

Creating a Radiology BusinessPlan

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

http://www.idph.state.il.us/

http://www.idph.state.il.us/

http://www.hfsrb.illinois.gov/

http://www.hfsrb.illinois.gov/

• Define who your target customers are

• Patients

• Referring physicians

• Physician extenders

• Insurance providers

Customer and Demographics

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

Key elements and decisions

Strengths Weaknesses

1. Good referring physician relationships

2. High patient satisfaction

3. Financially stable organization

4. High quality service

1. High Capital Outlay

2. Accurate information on competition

Opportunities Threats1. Build on customer and brand loyalty

2. New Service Not currently offered Cardiac MRI, CT, PET/CT

3. Unmet demand long wait for services

1. Declining Reimbursements

2. Healthcare reform

3. Clinical Decision Support Systems changing ordering patterns

4. Competition from other providers

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.]

Competitor Type of Facility

Size Market share (%)

Value to customers Strengths 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 cozgnbzgbpetitor's main strengths?]

[What are your competitor's main weaknesses?]




[What are your competitor's main strengths?]

















Competitors

Local Market MRI Analysis

FacilityBed Size

# of I/P Visits

# of O/P Visits

Total visits

# of MRI's

Open MRI's Model

% I/P Business

% O/P Business

M to F Hours of Operations

O/P Saturday Hours

O/P Sunday Hours Comments

0

Loyola University Medical Center 568 4,250 10,500 14,750 5 0

3 1.5T GE 1 3T Siemens, 1.5T Ultra short bore Siemens 29% 71%

3 out patient 7 am to 7 pm 1 inpatient 7am to 11 pm 1inpatient 24/7 7 am to 7 pm

7 am to 7 pm

Nurse staff in Radiology handles sedation 5 nurses assigned to MRI on day 2 on PMs

University of Chicago 571 3,370 10,877 14,247 6 0 2 3T units 4 1.5T units 24% 76%

1 unit 24/7 3 unit 7 am to 11pm 2units 7am to 7 pm

1 unit 24/7 2 units 7 am to 11 pm

1 unit 24/7 I unit 7 am to 7 pm. On call if volume is high

Nurse staff in Radiology handles sedation 6 nurses assigned to MRI on day 3 on PMs 1 on midnight

Rush University 674 4,193 7,982 12,175 4 0 1 3T unit 3 1.5 T units 34% 66%

1 inpatient unit 24/7 3 units 7 am to 11pm

3 units 7 am to 7 pm

units 7 am to 7 pm

Contract for 2 outpatient units. No peds sedation

UIC 438 3,617 7,064 10,681 5 1 7T 1 3T 3 1.5T 34% 66%

1 unit 24/7 3 unit 7 am to 11pm 1 unit 8 am to 4:30

3 units 7 am to 11pm


Northwestern Memorial Hospital 720 11,199 36,791 47,990 11 0

11 Siemens Magnets 5 in free standing outpatient Blg. 6 mixed use inpatient and outpatient in hospital setting 23% 77%

2 units 24/7 9 units 6 am to 11 pm



No Peds sedation cases very rare to have anesthesia cases

Palos Hospital 366N/A 2,080 1 0 1.5 T N/A N/A

Not available all MRI services provided under contract off site Joint Venture


Little Company of Mary Hospital 280N/A N/A N/A N/A



St. James Hospital 167 1,658 1,656 3,314 1 0 1.5 T GE 50% 50%1 unit 7 am to 11pm 1unit 7 am to 7 PM

1 unit 7am to 7 pm on call

No Peds sedation No trauma

Resurrection Medical Center 362 2,477 4,854 7,331 2 0

GE 16 channel State of the art 1 picker unit old 34% 66%6 am to 10:30 PM

7 am to 3:30 PM on call

No Peds sedation cases very rare to have anesthesia cases

Alexian Brothers 387 3,469 7,182 10,651 5 0 1 3T 4 1.5 T 33% 67%

1 unit 24/7 3unit 7 am to 11pm; 1 unit 7 am to 5pm

1 unit 7 am to 11pm 2units 7 am to 4 PM

1 unit 7am to 4pm then oncall

Open MRI at outpatient facility no peds sedations

Ingalls 383 4,919 8,861 13,780 5 0 1 3 T 4 1.5T 36% 64%

1 unit 24/7 3unit 7 am to 11pm; 1 unit 7 am to 7pm

3 units 7am to 11 pm


No peds no sedations

Our Lady of the Resurrection 151 736 1,001 1,737 2 0

1 3T unit 1 old 1.5 unit not staffed as a back up 42% 58%7am to 7 pm

8 am to 4:30 pm on call

No sedation patients no peds

Westlake Hospital 220 631 988 1,619 1 0 1 1.5 T 39% 61%8 am to 4:30 PM 7am to 3:30 on callNo sedation patients no peds

St Mary's of Nazareth 322 773 2,700 3,473 1.5 0

1 GE HDX 16 channel. I mobile unit removed 2 months ago 22% 78%7am to 7 pm 8 to 4:30 8 to 4:30

Volume may drop hours have been expanded due to loss of mobile

Macneal 293 1,562 5,832 7394 3 0 3 1.5T units 21% 79%

2 units 7 am to 10pm. 1 unit 8am to 4:30 PM

2 units 8am to 4:30

1 unit 8am to 4:30 PM

MRI center is not entirely hospital owned it is a partnership with physician investors

Silver Cross 256 2,278 5,251 7,529 3 0 3 1.5 T units 30% 70%

2 units 7 am to 11pm. 1 unit 7am to 7PM

2 units 7 am to 7 PM

1 unit 8am to 4:30 PM


Provena St Joseph Joliet 341 3,367 6,107 9,474 3 13 1.5 units in hospital 1 open in outpatient 36% 64%

1 unit 24/7 2 units 7 am to 11pm

2 units 7 am to 7 PM



Ingalls 383 4,919 8,861 13,780 5 0 5 1.5T units 36% 64%

1 unit 24/7 3 units 7 am to 11pm 1 unit 7 am to 7pm

3 unit 7am to 11pm



Stroger ( Cook County) 464 2,415 4,242 6,657 4 0 4 1.5 T units 36% 64%7 am to 11pm8 am to 4:30 pm on call


West Suburban 202 371 2,281 2,652 1 0 1 3T unit 14% 86%7am to 11pm8 am to 4:30 pm on call


Hospital MRI Units* 2006 2007 2008 % IP in 2008 2006 2007 20082008

Admissions2008 Onsite

Outpatient Visits2008 ED

Visits

ACMC 2 9,641 9,887 10,697 48.9% 4,821 4,981 5,349 45,814 283,407 80,954Advocate Condell 2 10,637 8,469 6,080 47.9% 3,546 2,823 3,040 17,491 305,360 45,944Advocate Good Samaritan 3 6,475 6,561 7,556 34.8% 3,238 3,281 2,519** 22,745 174,014 32,769Advocate Good Shepherd 3 2,021 5,013 5,544 37.9% 2,021 5,013 1,848** 14,754 179,207 32,840Advocate Illinois Masonic 2 6,723 6,419 7,102 28.0% 6,723 6,419** 3,551 21,687 147,864 38,791Advocate Lutheran General 4 7,287 11,896 14,404 39.8% 1,457 2,974 3,601 34,652 294,749 54,629Advocate South Suburban 1 4,571 4,485 4,359 41.4% 2,286 2,243 4,359*** 15,221 105,327 41,856Advocate Trinity Hospital 1 1,735 2,489 1,618 7.2% 1,735 2,489 1,618 14,975 82,144 38,038

Loyola 5 11,597 15,973 14,834 20.8% 2,899 3,195 2,967 37,940 685,574 55,648Northwestern 11 47,213 52,268 48,925 20.9% 5,246 4,752** 4,448 54,481 521,774 79,188Rush 4 12,175 11,959 12,083 31.7% 3,044 2,990 3,021 35,423 377,494 46,356University of Chicago 6 14,247 16,232 17,295 23.8% 2,375 2,705 2,883 29,840 401,714 82,828University of Illinois 3 10,681 11,511 10,075 17.4% 3,560 3,837 3,358 22,204 453,215 55,680

Little Company 1 0 1,412 3,549 40.0% 0 1,412** 3,549 17,713 203,520 59,798Palos Community 0 0 0 0 0.0% 0 0 0 20,567 187,224 48,005Holy Cross 1 0 1,623 1,685 35.4% 0 1,015 0 9,440 92,608 44,533South Shore 1 43 43 31 100.0% 43 0 0 5,442 24,504 12,493Silver Cross 2 7,529 7,182 7,612 29.9% 2,510 3,591 3,806 22,164 179,184 58,861Ingalls 5 13,780 14,678 8,158 59.0% 2,756 2,936 1,232 23,180 216,400 41,534Roseland 1 144 42 69 40.6% 17 27 0 5,191 11,971 17,060MetroSouth 1 2,929 3,247 2,886 53.2% 732 812 2,886 12,257 43,271 41,344

*MRI units include owned in 2008, shared and contracted units**Added a MRI unit***Removed a MRI from operation

Procedures per UnitTotal MRI Procedures

MRI procedures per unit select hospitals

Facility Name Zip Code ACMC Service Area Total MRI Units Unit Type(s)

High Tech Palos Heights 60463 PSA 2 2 Closed (including a 3.0T), 1 Open Midwest Orthopaedic Consultants 60465 PSA 1 OpenMidwest Orthopaedic Consultants 60467 PSA 1 OpenHigh Tech Tinley Park 60477 PSA 1 OpenIngalls - Tinley Park Family Care Center 60477 PSA 1 ClosedMidwest Physicians - Orland Park 60467 PSA 1 OpenOpen Advanced MRI of Tinley Park 60477 PSA 1 OpenOrland Open MRI 60467 PSA 1 OpenParkview Orthopedics 60463 PSA 1 OpenSouth Suburban Open MRI 60487 PSA 1 OpenSouthwest Hospitals MRI Center 60453 PSA* 3 2 Closed (including 2 - 1.5T), 1 OpenAdvocate Christ Medical Center 60453 PSA* 2 2 Closed (including a 1.5T)DIA Chicago Ridge Radiology 60415 PSA* 1 OpenHealth Medical Imaging 60453 PSA* 1 OpenOak Lawn MRI 60453 PSA* 1 OpenPreferred Open MRI II 60629 PSA* 1 OpenRegional MRI 60455 PSA* 1 OpenIngalls Hospital 60426 SSA 5 2 Closed, 3 OpenAdvantage MRI of Lemont 60439 SSA 1 OpenAdvocate Trinity 60617 SSA 1 OpenHomer Glen Open MRI & Imaging 60491 SSA 1 OpenMetroSouth 60406 SSA 1 Closed (1.5T)St. James Community Health Center of Mokena 60448 SSA 1 Open5-mile radius Total 9 4 Closed Units in 5-mile radiusSSA Total 24 8 Closed Units in PSATSA Total 31 10 Closed Units in TSA

*Located within 5-mile radius of ACMC/AHCH

Competing Magnets by type

ClinicalServiceCategory ProcedureGroup 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021MRI MRI - abdomen 5,687 5,716 5,746 5,762 5,802 5,857 5,896 5,949 5,995 6,043 6,094

MRI - brain 35,502 35,702 35,938 36,172 36,456 36,743 36,958 37,270 37,522 37,793 38,082

5%MRI - breast 2,552 2,679 2,813 2,954 3,102 3,257 3,420 3,591 3,770 3,959 4,157

5% after 2015 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

MRI - upper extremities 17,950 18,061 18,183 18,308 18,454 18,599 18,708 18,862 18,990 19,128 19,275

MRI Market Growth for Primary Service area source Advisory Board

Service Line 2007 2008 2009 Total

Orthopedics 1,802 (34.8%) 1,884 (34.7%) 1,949 (33.3%) 5,635 (34.3%)Neurosciences 884 (17.1%) 1,032 (19.0%) 1,584 (27.1%) 3,500 (21.3%)General Medicine 962 (18.6%) 969 (17.8%) 416 (7.1%) 2,347 (14.3%)Oncology 630 (12.2%) 647 (11.9%) 775 (13.3%) 2,052 (12.5%)Other 902 (17.4%) 901 (16.6%) 1,121 (19.2%) 2,895 (17.6%)Total 5,180 (100%) 5,463 (100%) 5,845 (100%) 16,429 (100%)

Note: Inpatient Service Lines based on Corporate service line definitions (ICD-9 Dx)Source: TSI

Referral by service line

T h om s on O utp a tie n t P ro jec t ion s (P o pu lat io n)

A C M C S er v ice A re a2 0 0 6

P ro c ed u re s2 0 0 7


P ro ce d ur e s2 0 0 9

P r o ce d ur e s2 0 10

P r oc e d ur es2 0 11


P r oc e du re s2 01 3

P ro c e du re s20 1 4

P ro c e du re s

P S A 7 8 ,53 6 7 8 ,71 3 7 8 ,89 0 7 9 ,0 6 8 7 9,2 4 6 7 9,4 2 4 79 ,6 0 3 79 ,7 8 2 7 9 ,9 61S S A 5 4 ,13 7 5 4 ,49 1 5 4 ,84 7 5 5 ,2 0 5 5 5,5 6 3 5 5,9 2 4 56 ,2 8 7 56 ,6 5 2 5 7 ,0 20T S A 1 3 2 ,66 8 1 3 3 ,20 1 1 3 3 ,7 3 6 1 3 4,2 7 3 1 3 4,8 1 0 1 35 ,3 5 0 1 35 ,8 9 1 13 6 ,4 35 13 6 ,9 81

T h om s on O utp a tie n t P ro jec t ion s w /Te c h no log y E s t im a tes










P ro c e du re s

P S A 7 8 ,53 6 7 8 ,71 3 7 8 ,89 0 7 9 ,0 6 8 8 1,0 5 5 8 3,0 9 1 85 ,1 7 9 87 ,3 1 9 8 9 ,5 13S S A 5 4 ,13 7 5 4 ,49 1 5 4 ,84 7 5 5 ,2 0 5 5 6,8 5 2 5 8,5 4 8 60 ,2 9 5 62 ,0 9 4 6 3 ,9 46T S A 1 3 2 ,66 8 1 3 3 ,20 1 1 3 3 ,7 3 6 1 3 4,2 7 3 1 3 7,9 0 8 1 41 ,6 4 1 1 45 ,4 7 6 14 9 ,4 14 15 3 ,4 59

T h om s on O utp a tie n t P ro jec t ion s M id po in t B e tw e en P o p ula t ion an d Te c h no log y E s t im a te s










P ro c e du re s

P S A 7 8 ,53 6 7 8 ,71 3 7 8 ,89 0 7 9 ,0 6 8 8 0,1 5 0 8 1,2 5 8 82 ,3 9 1 83 ,5 5 0 8 4 ,7 37S S A 5 4 ,13 7 5 4 ,49 1 5 4 ,84 7 5 5 ,2 0 5 5 6,2 0 8 5 7,2 3 6 58 ,2 9 1 59 ,3 7 3 6 0 ,4 83T S A 1 3 2 ,66 8 1 3 3 ,20 1 1 3 3 ,7 3 6 1 3 4,2 7 3 1 3 6,3 5 9 1 38 ,4 9 6 1 40 ,6 8 4 14 2 ,9 25 14 5 ,2 20

Outpatient Procedure Volume Primary and Secondary Service area

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 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.

Cash Method

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 consumedby 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 positiveContribution 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 organizationWorking capital is the difference between current assets and current liabilities measure of anOrganizations ability to satisfy short term obligations

Current assetsCurrent ratio = --------------------- Current liabilites

Total liabilities Debt to equity ratio = --------------------------------- organizations equity

Internal Rate Of Return - IRRThe 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.

Definitions

Time value of money means that money that can be invested today to earn interest andgrow 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 ContinuedPayback 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

Operating lease • Rent• Mobile equipment periodically on site

Capital Lease • Direct financing lease• Sales type lease

Reasons to lease• Start up companies with insufficient funds to purchase equipment• Facilitate acquisition of equipment• Tax incentivesIssues with leases• Off Balance Sheet financing• Purchased assets effect debt to equity ratios• Lowers the calculations on rate of return on assets

Capital leases

Agreements that we identify as leases but which in reality are essentially installment purchasesAccounting for leasing attempts to see through the legal form of the agreement to determinetheir economic substance. If the agreement transfers the benefit of ownership to the lessee it would beclassified 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. The agreement specifies the ownership of the asset transfers to lessee2. The agreement contains a bargain purchase option3. The non cancelable lease term is equal to 75% or more the expected economic life of the asset4. 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 JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN TOTALENTER VOLUME -

REVENUE PER UNIT 1800

Estimated Net Revenue % 30.0%Reimbursement may need to be adjusted based on nature of proposal

REVENUE

Total Estimated Charges $ 390,000 $ 390,000 $ 390,000 $ 390,000 $ 390,000 $ 390,000 $ 390,000 $ 390,000 $ 390,000 $ 390,000 $ 390,000 $ 390,000 $ 4,680,000

Total Estimated Net Revenue $ 117,000 $ 117,000 $ 117,000 $ 117,000 $ 117,000 $ 117,000 $ 117,000 $ 117,000 $ 117,000 $ 117,000 $ 117,000 $ 117,000 $ 1,404,000

FTEsMRI Technologist 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0Clerical Support 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 0.0ANNUAL SALARY/FTEMRI Technologist 1.0 60,000.0 60,000.0 60,000.0 60,000.0 60,000.0 60,000.0 60,000.0 60,000.0 60,000.0 60,000.0 60,000.0 60,000.0 Clerical Support 24,000.0 24,000.0 24,000.0 24,000.0 24,000.0 24,000.0 24,000.0 24,000.0 24,000.0 24,000.0 24,000.0 24,000.0

0

INCREMENTAL EXPENSESSalaries $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 204,000 Benefits (25%) $ 4,250 $ 4,250 $ 4,250 $ 4,250 $ 4,250 $ 4,250 $ 4,250 $ 4,250 $ 4,250 $ 4,250 $ 4,250 $ 4,250 $ 51,000 Purchased Services $ - Supplies $ 12,500 $ 12,500 $ 12,500 $ 12,500 $ 12,500 $ 12,500 $ 12,500 $ 12,500 $ 12,500 $ 12,500 $ 12,500 $ 12,500 $ 150,000 Physician Fees $ - Deprecation $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 144,000 OTHER $ - TOTAL EXPENSE $ 45,750 $ 45,750 $ 45,750 $ 45,750 $ 45,750 $ 45,750 $ 45,750 $ 45,750 $ 45,750 $ 45,750 $ 45,750 $ 45,750 $ 549,000

TOTAL FINANCIAL IMPACT $ 71,250 $ 71,250 $ 71,250 $ 71,250 $ 71,250 $ 71,250 $ 71,250 $ 71,250 $ 71,250 $ 71,250 $ 71,250 $ 71,250 $ 855,000 TOTAL NEW FTES 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0

Note Unit Operates 10 hours per day 5 days per week 50 weeks 2500 procedures per yearDepreciation 7 years straight line

•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

Executive Summary 1-2 pages

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

creating a radiology business plan john j. mcgreevy m.b.a. rt ( r)

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