MHA FPX 5006 Assessment 3 Cost-Benefit Analysis Name Capella university MHA-FPX 5006 Health Care Finance and Reimbursement

Prof. Name Date Cost-Benefit Analysis Healthcare facilities continually strive to optimize patient care while minimizing costs. One method to achieve this is by investing in an MRI device, which not only enhances patient care but also attracts more patients to the facility. However, the decision to acquire such a device requires careful consideration due to its significant cost implications. In conducting a cost-benefit analysis, healthcare facilities must account for various factors such as maintenance expenses, system upgrades, and personnel training (Phillips Healthcare, 2016). This analysis aids in estimating the potential revenue generated by the investment, thus guiding decision-making processes. MHA FPX 5006 Assessment 3 Cost-Benefit Analysis Opportunity Cost Understanding the concept of opportunity cost is crucial when evaluating investments. While acquiring an MRI machine entails risks and substantial upfront costs, it also presents opportunities for revenue generation and improved patient care (Cleverley & Cleverly, 2018). Employing a comprehensive cost-benefit analysis, coupled with an understanding of opportunity costs, ensures a thorough assessment of available options before making a decision. Effective identification of alternatives and forecasting assist in informed decision-making, ultimately leading to enhanced patient outcomes and increased revenue for healthcare facilities. Cost-Benefit Analysis A cost-benefit analysis serves as a vital tool for assessing the feasibility of a project, such as acquiring an MRI machine, by comparing anticipated costs with expected benefits (Plowman, 2009). Calculations over a five-year period, considering a present value discount rate of 2%, reveal the potential financial implications of such an investment. While the initial cost of an MRI machine varies significantly, ranging from $150,000 to $1.2 million nationwide (Glover, 2014), the analysis provides insights into the total costs and benefits over the specified timeframe. Action Plan Upon conducting a cost-benefit analysis and determining the viability of acquiring an MRI machine, healthcare facilities must develop a clear action plan. This plan should outline steps for procurement, budgeting, and decision-making processes (Chakravarty & Naware, 2008). Additionally, it should address strategies for cost management while ensuring optimal patient care. Regular maintenance schedules and adherence to established guidelines are essential to maximize the longevity of the MRI machine and maintain patient satisfaction. Conclusion In conclusion, the decision to acquire an MRI machine requires careful consideration of both costs and benefits. Through a comprehensive cost-benefit analysis, healthcare facilities can assess the financial implications and potential returns on investment. By accounting for maintenance costs, system upgrades, and personnel training, facilities can make informed decisions that optimize patient care and enhance revenue generation. References Chakravarty, A., & Naware, S. S. (2008). Cost-effectiveness Analysis for Technology Acquisition. Management and Decision Making, 64(1), 46-49. Cleverley, W. O., & Cleverly, J. O. (2018). Essentials Of Health Care Finance (8th ed.). Jones & Bartlett. Glover, L. (2014, July 16). Why Does an MRI Cost So Darn Much? Money. Retrieved from https://money.com/why-does-mri-cost-so-much/ MHA FPX 5006 Assessment 3 Cost-Benefit Analysis Plowman, N. (2009, December 1). Writing a Cost-Benefit Analysis. Retrieved from https://www.brighthubpm.com/project-planning/58181-writing-a-cost-benefit-analysis