A busy clinical laboratory is considering the purchase of new tissue processing equipment that will cut the time of producing test results in half. In many instances, test results will be available within the same day, whereas before, patients had to wait 24 hours or more. It is a major expense, however, and the clinic does not have the resources to absorb it. The cost will have to be covered within one fiscal year and passed on to the consumer in the form of increased prices for services. Over half of the lab's clientele are elderly and on Medicare which will not adjust its allowances for the increased price of the tests; therefore, the majority of the burden for the increased prices will have to be borne by self-pay patients and those patients with more generous private health insurance plans. On average, a typical tissue test will cost $15 more if the machine is acquired.
Take a position on the situation. Then design a one-page proposal statement to be submitted to Upper Management either recommending that the equipment be purchased or not be purchased and back up your proposal with your reasons.