Firm b - offers an all-inclusive rate of 014 a line for


Project -

Your Hospital has decided to outsource transcription.

1. Complete a one-three page request for proposal that will be sent to all the prospective transcription vendors. (All proposals to the hospital must have an all-inclusive per line cost, guarantee 100% domestic transcription, guarantee turnaround times {TAT} as specified by the hospital- 24 hrs. for all work types with 6 hr. TAT for stats, and supply the hospital a monthly itemized bill for every job type)

Currently, the transcription department is made up of 14 full time transcriptionists each earning $34,000 a year in salary, 2 part time transcriptionists each earning $15,000 per year, and 1 lead transcriptionist earning $40,000 a year. The hospital also pays $10,000 a year in annual maintenance fees, and other costs to keep up the old dictation system operating.  

- Salaries listed above do not include the cost of benefits

- Only full time employees receive benefits and benefits which are 29% of the employee's salary

- Current volume is 5 million annual lines (based on 65 character line)

You must choose between the firms below.

Firm A - offers an all-inclusive rate of $0.12 a line

Firm B - offers an all-inclusive rate of $0.14 a line for straight transcription, or $0.10 a line if the provider qualifies for back-end [1] speech recognition (you can expect 25% of the overall transcription volume to qualify for speech recognition the first year {1.25 million lines} and 60% the second year {3 million lines}) - calculate the costs as a mix of the 2 transcription options

2. Create a power point presentation to management comparing the projected costs only (don't include any savings or positive cash flows) for each option Firm A and B over the next 5 years (include NPV calculation for each Firm see unit 3 assignment 1) - the risk free rate of return on invested hospital funds is 5%.

3. Next, prepare a proforma comparing the 2015 costs with the 2016 projected costs for the firm you choose, include the following options. (Use Unit 3, assignment 2 for reference) include Salary, benefits, outsourcing costs, maintenance, etc.

4. Finally, Draft a one page memo to the CFO. Indicate which option you recommend and why. Assume that both firms are equal in every way except for cost. (Use unit 3 assignments as reference)

Please feel free to do additional research using other sources including the AHIMA body of knowledge especially for task 1.

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Management Theories: Firm b - offers an all-inclusive rate of 014 a line for
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