Macroeconomic Policy - 1

Macroeconomic Policy and its Implications for True Reflection Imaging Center

Macroeconomic Policy and its Implications for True Reflection Imaging Center

Macroeconomic Policy - 2 True Reflection Imaging aims at meeting a variety of radiologic health care needs. The following business proposal predicts the effect of current macroeconomic trends on True Reflection Imaging, identifies current levels of gross domestic product growth, inflation, and unemployment, and explains how these levels affect the organization. In addition, it projects patient volume, revenue, and expenses while identifying indirect benefits. Current Macroeconomic Trends Gross Domestic Product Growth (GDP), Inflation, and Unemployment Progressive GDP growth of the labor force through workforce diversification, expansion, and education fuels U.S. economic productivity. The two fastest growing sectors are professional and health care services. The 2008 national health expenditure was projected to increase from $1.2 trillion to $2.2 trillion with the GDP rate increase from 13.9% to 16.2% as a result of the growing senior population of 35 million residents (Lightfoote, 2000). Spending on radiology services increased 50% faster than other medical specialties because of the advancements in CT and PET scans, X-rays, mammography, MRIs, and ultrasound technology (Lightfoote, 2000). True Reflection Imaging has technologically advanced equipment and knowledgeable staff members accommodate the needs and demands of the current marketplace. A factor in health care inflation is radiologic imaging procedures because the annual inflation rates for these services will grow from zero to 15% (Milstein & Darling, 2010). These rates are a result of wasteful and excessive use of medical imaging and similar services. Although beneficial in increasing operation efficiency, imaging is often excessively without viable clinical need causing harm to patients through unnecessary radiation exposure (Milstein & Darling, 2010). Freestanding imaging centers, such as True Reflection Imaging use

Macroeconomic Policy - 3

sophisticated imaging devices and consensual protocols to reduce wasteful utilization of equipment and deflect complacency. The demand for radiologic technologists will grow faster than average. In 2008, there were 214,700 jobs within this service industry accounting for 61% of hospital job growth (Bureau of Labor Statistics, 2011). It is forecasted to increase another 17% by 2018 because of the aging Baby Boomers. The demand for diagnostic imaging services becomes greater because seniors are more susceptible to illness and injury that requires a timely diagnosis to identify the correct and most cost-efficient medical treatment (Bureau of Labor Statistics, 2011). Those knowledgeable about the operation of equipment are in the forefront of the employment market. True Reflection Imaging services must balance the costs with advances to meet the patient needs under the current economic conditions. The key to optimum output is investment in technologically advanced devices. This will positively affect the GDP by increasing employee productivity and accuracy, thus leaving less room for error. GDP, inflation, and unemployment levels will simultaneously determine the trends in this industry and others. Cost-Effectiveness Analysis Patient Volume, Revenue, and Expenses The projected patient volume at True Reflection Imaging is expected to be abundant. It is estimated that this facility will provide imaging services to at least 20 patients per day. This will not allow the overbooking of patients to ensure that patients receive optimal care. The location of

Macroeconomic Policy - 4 the imaging center will also give an indication of the patient volume. However, a rural area is likely to have less patient volume than that of an urban area. Based on the payments reimbursed through private pay, contracts, and insurance carriers an approximated amount of revenue for True Reflection Imaging can be assumed. Once these fees are negotiated with insurance carriers, contractors, and patients, operational costs must be taken into consideration before the amount of revenue can be determined. Other issues related to the labor market are the determination of wages and the employment of health care personnel (Jacobs & Rapoport, 2004, p. 248). The finances of this organization are likely to be calculated on a monthly basis. Operational costs are approximately $25,000 a month. These costs include rental space, staffing costs, the cost of medical supplies, equipment costs, utility costs, and maintenance costs. Indirect Benefits The technology involved in medical imaging can have significant up-front costs. This may be deceiving upon initial assessment because the investment costs are not quickly returned. The purchase of medical imaging equipment is not typically associated with cost reductions. However, research indicates that medical imaging services can replace more invasive, expensive, and often unnecessary procedures. Medical imaging can assist in diagnosing disease earlier and avoiding inpatient procedures, which are invasive, and costly patients (Evens, 1989). As a result, advances in medical imaging have decreased the majority of exploratory surgeries. The benefits of medical imaging are passed down to the patient and include financial savings, expedient recovery, and the avoidance of unnecessary testing. Although the cost savings passed onto the patient are a direct benefit, the reduced downtime is an indirect benefit.

Macroeconomic Policy - 5 Another indirect benefit of opening an imaging center would be the economic development opportunity because of the jobs produced in staffing the facility. A minimal facility could create at least 10 employment positions initially. Once launched, the facility, and staffing needs will expand two-fold. Additionally, more than 50% of those positions would be considered highly skilled. Conclusion The growth of the baby boom population currently and in the future is a macroeconomic trend that influences the vitality of True Reflection Imaging Center. Current levels of health care expenditures have increased $1 trillion since 2008 and as the Baby Boomers grow older it is forecasted to continue growing. Imaging is a specialty growing faster than any other service because of the need to diagnose various diseases once performed through invasive means requiring inpatient hospitalization. As a result of this growth, the free standing clinic will produce jobs while investing in the most technologically advanced equipment, thus ensuring patient safety and high quality patient care.

Macroeconomic Policy - 6 References: Evens, R. G. (1989). Economics of diagnostic imaging. American journal of radiology, (153), 179183. Harrington, H., & Voehl, F. (2010). Innovation in health care. International journal of innovation science, 2(1), 13-27. Jacobs, P., & Rapoport, J. (2004). The economics of health and medical care (5th ed.). Sudbury, MA: Jones and Bartlett Publishers. Lightfoote, J. B. (2000). The big picture. Retrieved from http://www.imagingeconomics.com/issues/articles/2000-11_03.asp Milstein, A., & Darling, H. (2010). Better U.S. Health Care at Lower Cost. Issues in science & technology, 26(2), 31-40 U.S. Bureau of Labor Statistics (2011). Radiologic Technologists and Technicians. Occupational outlook handbook (2010-2011 Ed.). Retrieved from http://www.bls.gov/oco/ocos105.htm.