Assignment
Overview
Conduct a cost-benefit analysis using a template, then explain the concept of opportunity cost and how a cost-benefit analysis aligns with organizational needs. Recommend a plan of action based on the cost-benefit analysis.
Note: The assessments in this course build upon each other, so you are strongly encouraged to complete them in sequence.
You will demonstrate your proficiency in the following course competencies and assessment criteria:
• Competency 1: Develop financial strategies to address dynamic environmental forces.
o Recommend a plan of action based on a cost-benefit analysis.
Competency 2: Analyze the cost and revenue implications for organizational changes due to environmental forces.
o Analyze the cost and benefits of purchasing equipment for a health care organization.
o Explain the concept of opportunity cost.
o Explain how a cost-benefit analysis aligns with organizational need and future growth.
Competency 4: Communicate in a manner that is scholarly, professional, and consistent with expectations for professionals in health care administration.
o Write content clearly and logically with correct use of grammar, punctuation, and mechanics.
o Format citations and references using APA style.
Questions to Consider
To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of your professional community.
What are the differences between variable and fixed costs? How do these affect financial forecasting?
What is the purpose of a cost-benefit analysis?
Resources
Required Resources
The following resources are required to complete the assessment.
Internet Resources
Access the following resources by clicking the links provided. Please note that URLs change frequently. Permissions for the following links have either been granted or deemed appropriate for educational use at the time of course publication.
Plowman, N. (n.d.). Cost-benefit analysis: A template.
Plowman, N. (n.d.). Writing a cost-benefit analysis.
Suggested Resources
The following optional resources are provided to support you in completing the assessment or to provide a helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left navigation menu of your courseroom.
Internet Resources
Access the following resource by clicking the links provided. Please note that URLs change frequently. Permission for the following link has either been granted or deemed appropriate for educational use at the time of course publication.
Healthcare Financial Management Association. (2016).
Bookstore Resources
Cleverley, W. O., Cleverley, J. O., & Song, P. H. (2011). Essentials of health care finance (7th ed.). Sudbury, MA: Jones & Bartlett Learning.
o Chapters 14 and 15.
Assessment Instructions
Preparation
Use Plowman's "Cost-Benefit Analysis: A Template" along with his article "Writing a Cost-Benefit Analysis" to complete Part 1 of this assessment. Both documents are located in the Required Resources section of this assessment.
Use the following scenario that continues the scenario from Assessment 2 as the foundation for this assessment:
One of the physician's groups in the clinic would like to purchase an MRI machine. Currently, clients who need an MRI must schedule an appointment at another facility, adding time and cost to any treatment they may need. The machine will be available for all the physicians in the clinic to use, and will require additional staff to operate the equipment and the office area where it will be housed.
You must prepare a cost-benefit analysis to present to the physicians so they may decide whether to move forward with the purchase. Be sure to consider the non-monetary costs, such as productivity, as well as the non-monetary benefits such as improved customer satisfaction. Although these may be difficult to quantify, they are important costs and benefits that must be considered.
Requirements
Prepare a two-part cost-benefit analysis.
Part I
Complete the cost-benefit analysis template for the purchase of an MRI machine for the clinic.
Part II
Based on the cost-benefit analysis, write a 2-3 page summary:
Explain the concept of opportunity cost.
Explain how the cost-benefit analysis aligns with organizational need and future growth.
Recommend a plan of action that is supported by the cost-benefit analysis. (Should the clinic purchase the MRI machine, or not?) Reference specific areas of the analysis in your recommendation.
Submit both parts of the assessment at the same time. Please note that you will need to attach each part separately since they are different types of documents.
Additional Requirements
Include a title page and reference page for Part II.
Number of pages: 3-4, not including the title page and reference page (Part II only).
At least 2 current scholarly or professional resources (Part II only).
APA format for citations and references used in Part II.
Times New Roman font, 12 pt. (Part II).
Double-spaced (Part II).
Attachment:- Cost-Benefit-Template.rar