Starting up stress thallium cardiac imaging services

This paper presents an evaluation of alternative methods for a hospital to establish stress thallium cardiac imaging services at a group of physicians' office. Volume-cost-profit analysis, break-even analysis and capital budgeting techniques were used to determine the most feasible method from a financial perspective without sacrificing quality of services. The main focus of this evaluation centers upon three alternative methods of procuring an imaging camera: (1) purchasing a new camera, (2) purchasing used equipment, or (3) leasing a new camera. Budgeted income statements were constructed using relevant revenue and cost information for each alternative. The payback period, net present value and the internal rate of return for each method of procuring a camera was computed. In addition, the break-even point was also determined for each alternative. After the analysis was completed, it was concluded that the method of choice, without sacrificing quality of service delivery, was that of purchasing a used camera.