Running head: BUSINESS PLAN FOR TOSHIBA AQUILION PRIME CT

Business Plan for Toshiba Aquilion Prime CT Scanner: Edinburg Regional Medical Center
Laurence Weinreich
Siena Heights University
Health Care Systems Management
LDR 609
Dr. Fick
October 15, 2016
Business Plan for Toshiba Aquilion Prime CT Scanner: Edinburg Regional Medical Center
Executive Summary:
Edinburg Regional Medical Center and Childrens Hospital is requesting approval to
replace our existing Toshiba 16 slice and Toshiba 32 slice CT scanners with 2 Toshiba Aquilion
Prime 40 slice CT scanners. Edinburg Regional Medical Center is an accredited chest pain
center. We are one of two accredited chest pain centers in the Rio Grande Valley. We are a trauma
level IV center for the McAllen/Edinburg area.
The cost of the Toshiba CT scanners including tax is $448,799.00 for the scanner with
fluoroscopy. The second Toshiba CT scanners cost including tax is $402,641.00. The grand total
for both CTs before construction is $921,662.15. Site preparation including architectural fees

and construction costs is $21,888.37. The total capital expenditure is $943,550.52 with taxes.
This purchase is essential to the strategic positioning of Edinburg Regional Medical Center as a
premier Imaging Center in the Rio Grande Valley. The replacement of our current CT scanners is
vital in maintaining our current volumes, but also to further develop our imaging services.
The current CTs are now over 10 and 11 years old. Replacement of both CTs at
Edinburg Regional is necessary due to the older technology on the current systems which make
both a top priority to replace in 2016.
The purchase of the new CTs will give us numerous advantages over our current
technology. This will bring us into XR-29 compliance which is standard on the new systems. The
current AQ32 (Pediatric Side) and AQ 16 (Adult Side) are not XR-29 upgradeable. This can
result in a reduction in reimbursement if a Medicare patient is scanned on the system. The new
systems will produce a lower amount of radiation per exam compared to our current system. In
some cases, there is a 50-75% reduction in radiation dose on the Prime 40s due to updated
technology. The Prime 40 system utilizes AIDR 3 D, which is the latest in Iterative Dose
Reduction. This removes noise from the image, which allows for less radiation to be used to
acquire a diagnostic image.
The bore (opening) on the Prime 40 CT scanners are larger than the current systems in
operation at Edinburg Regional and Childrens Hospital. This allows us to scan larger patients
without turning them away for a slight increase in revenue. The larger bore also reduces the
claustrophobic feelings of our patients, which leads to increased patient satisfaction. This larger
bore also gives the physician more working room when performing biopsies under fluoroscopy.
The table weight on these scanners is far superior to what we are currently using. The table

BUSINESS PLAN FOR TOSHIBA AQUILION PRIME CT

weight on the new Prime 40s is 660lbs, which is substantially higher than the current 450lbs on
the present scanners we own.
A further advantage of the new CT scanners revolves around shorter scan times. It will
decrease the breath hold times significantly, which will aid in exams performed on our children.
The image reconstruction speed is 300% faster. This allows for a faster exam time which will
also result in higher customer satisfaction. The new scanners will have SEMAR (Single Energy
Metal Artifact Reduction) which greatly reduces/ eliminates blooming artifacts in orthopedic
imaging from metal hardware in the patient.
Competitor Analysis:
The majority of the competitors in the area have older CT scanners, which don not offer
the same type of technology that we will have with the new scanners. This gives Edinburg
Regional and Childrens Hospital a competitive edge.
Mission Regional, Knapp Medical, Valley Baptist, Valley Regional, Doctors Hospital
Renaissance (Imaging Centers and Womens Centers), McAllen MRI Center, other private
Imaging Centers all have older CT scanners.
Operating Plan:
These new CT scanners will be operated out of the Edinburg Regional adult side and the
Childrens Hospital Pedi side. The new units will be a replacement of both CT scanners on the
adult and childrens sides of the hospital. There will be no need for additional staffing due to this
purchase. The entire project will require 12-16 weeks of downtime. During this period, CTs will
be performed at ERMC and then switched over to Childrens.
Marketing Plan:
The new CT Scanners will be marketed heavily using the following avenues:

BUSINESS PLAN FOR TOSHIBA AQUILION PRIME CT

Open house/ tour of the suite

Physician office visits

Articles in the physician newsletter

Direct mail

Articles in the Health News Community Newsletter

Employee newsletter

Risks:
If the new CT scanners are not purchased, the CT department and its capabilities will fall
further behind technologically as compared to the community. As a result, our scanners
will not meet XR-29 compliance and we will start losing Medicare/ Medicaid funding
and general insurance reimbursements.
Project Cost: (Preliminary)
Summary of CT Project/ Equipment Quotes below:
Vendor
Toshiba Aquilion Prime 40 with
fluoroscopy
Toshiba Aquilion Prime 40

Scope of Work
Purchase

Amount
$448,779.00

Purchase

$402,641.00

Sub-Total
Tax (equipment)

$851.420.00
8.25%

Total (equipment)

$ 70,242.15
$ 921,662.15

Summary of Projects Costs (Used in PAC):

Project Summary

Amount

Architect Fees and Engineering fees

$ 6,000.00

Construction Fees

$ 14,220.21

BUSINESS PLAN FOR TOSHIBA AQUILION PRIME CT

Taxes
GRAND TOTAL

Direct Margin:

(South Texas Health System [STHS], 2016)

5
$ 1,668.16
$ 21, 888.37

BUSINESS PLAN FOR TOSHIBA AQUILION PRIME CT

References
Capital Budget Template. (2016). In South Texas Health System / Universal Health Services
Capital Budget Template. King of Prussia, Pennsylvania: Author.
South Texas Health System. (Cartographer). (2016). Direct Margin chart [Excel Spread Sheet].
Edinburg, Texas: Author.