Unionville Heart Center Essay

1297 Words Feb 15th, 2012 6 Pages
Direct Costs:
$1 000,000 / 400 surgeries performed = $2,500/surgery
Transplants: 2,500 x 50= $125,000
Valve Replacements = 2,500 x 1,000 = $250,000
Bypass = 2,500 x 250 = $625,000

Indirect Costs:
Medical Salaries: $5,000,000/10,000 hours = $500 per hour
Transplants: 500 x 2,000 = $1,000,000
Valve Replacements: 500 x 3,000 = $1,500,000
Bypass: 500 x 5,000 = $2,500,000

1. Building Maintenance: $1,000,000/50,000 = $20 per square foot
Transplants: 20 x 30,000 = $600,000
Valve Replacements: 20 x 10,000 = $200,000
Bypass: 20 x 10,000 = $200,000 2. Building Maintenance: $1,000,000/1000 = $1000 per job
Transplants: 1000 x 600 = $600,000
Valve Replacements: 1000 x 210 = $210,000
Bypass: 1000 x 190 = $190,000

1.
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The total cost of all these treatments taking into account the amount of procedures performed for each type of treatments remains $10,000,000 ($3,058,333.33 + $2,593,333.33 + $4,348,333.33).
Alternative 3: Using the alternative cost driver for building maintenance and the normal cost driver for laboratory costs
Transplants: $125,000 + $1,000,000 + $600,000 + $615,384 + $333,333.33 = $2,673,717.95 / 50 = $53,474.36
Valve Replacements: $250,000 + $1,500,000 + $210,000 + $615,384 + $333,333.33 = $2,908,717.95 / 100 = 29,087.18
Bypass: $625,000 + $2,500,000 + $190,000 + $769,230 + $333,333.33 = $4,417,564.10 / 250 = $17,670.26
Using Alternative 3 of the ABC analysis, transplants cost $53,474.36 per procedure, valve replacements cost $29,087.18 per procedure and bypass surgeries cost $17,670.26 per procedure. The total cost of all these treatments taking into account the amount of procedures performed for each type of treatments remains $10,000,000 ($2,673,717.95 + $2,908,717.95 + $4,417,564.10).
Alternative 4:

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