New Lines of revenue

You are reviewing financial data for your organization from last quarter and feel that a new line of serve or product would add to your revenue streams. After careful review, you have several options which would add value to patient care areas but know that there must also be a financial profit in your analysis.

To conduct the basic return on investment you will need to first calculate the investment revenue (IR) using the following formula:

IR = Estimated patients x cost of services

Once you have calculated that you can proceed to calculate the estimated return on investment (ROI) using the following formula:

ROI = Investment Revenue (IR) ·Investment Cost

Investment Cost

Scenario #1

EKG Machine Equipment Cost $10,000

Facility: Hearts Cardiology

Patients: 10,000 patients annually: estimated 80% are eligible for EKG

Charge: $20

Scenario #2

Fat Freezing: Equipment Cost $40,000

Facility: Concierge Adult Medicine

Patients: 10,000 patients annually: estimated 25% will complete 2 treatments

Charge: $1200 per treatment

Instructions

• Present your IR & ROI calculations for each of the 2 scenarios (show all work)
• Discuss the calculated ROI for each service
• Include in your discussion why you feel the service may or may not bea viable financial option.