Introduction •Benson Regional Medical center has been finding the opportunities for incorporating more alternative and complementary medicines. •This goal become possible after federal grant has been awarded from Nation Center for the Integrative and Complementary Health. •Despite of the western trained skepticism providers of the non- traditional therapies or medicines forms, there has been increasing body of the evidence for supporting combinations of the conventional and complementary medical therapeutic interventions.
Continued.. •Hence, for the consumers, complementary medicine is considered to be less expensive compared to conventional treatment, as it is attractive for the patients who have tried more approaches of traditional treatment with no or limited success and it is having easy accessibility. •The analysis of cost volume profit has been done for determining breakeven points of sales and volume for three alternatives of CAM, which are yoga therapy, biofeedback and acupuncture.
CAM Alternatives •Acupuncture is the first alternative. It is ancient process that is rooted in the Eastern medicine, in which solid and thin needles are inserted in body strategically and it is manipulated carefully by practitioner. •Biofeedback is the second alternative. In this, power of mind is harnessed by patients and become aware of the things going inside their body for gaining more control over health. •Yoga therapy is last alternative. It encourages integration of spirit, body and mind for improving physical and mental health (Finkler, Smith & Calabrese, 2018).
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Continued.. •These alternatives are having objectives for helping the patients for finding relief from the chronic lower discomfort of back, when interventions of more conventional medical treatment falls short of the expectations. •Each approach of CAM has been effective in the management of chronic lower painof back for the clients. It is considered to be safe, when it is performed by licensed or certified practitioners (Jones et al. 2018).
Continued.. •Intangible benefits are associated with each of the therapy. •There are various patients who have reported for being pain free after years of the intolerable discomfort. •The others have reported that they are being able for resuming work and leisure related activities, which were not possible because of back pain before receiving alternative and complementary medical interventions (Jones et al. 2018).
Intervention Costs •For the decision regarding recommendation for the finding, identification of the relevant cost linked with each alternatives on annual and per client basis and development of financial assumptions are required. •For the purpose of CVP, semi-fixed costs are considered to be FC. •For CVP and CEA, VC consists of patient consumable supplies and education materials used in provision of the care (Cleverley & Cleverley, 2017).
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Financial Assumptions •There is assumption that integrative and complementary health service line will incorporate chosen CAM into the existing services. It will be having 160 clients for first year of operation. •It is assumed that provider will be contracted with Center and expected for dedicating total of 10 hours per week at Centre providing care to clients. •There is the assumption that provider will be available for only 50 weeks per year. •There will be allocation of 2 hours per week of the one clerical worker for assisting in scheduling, ensuring the availability of patient education materials, coordination of required resources for meeting needs of clients and placing follow-up with the clients (Kaplan et al. 2014).
Continued.. •For the alternative of spinal manipulation, there would be requirement of retaining services of outside Radiologist for reading radiographs, which was estimated for taking 1 hour per week. •There would be requirement of X-ray Technicians for taking radiographs and sending it to the radiographs.
Continued.. •Center will employ the technicians and this particular would not be consuming more than an hour per week. •There is the assumption that each of the alternatives will be providing significant patient education materials on routine basis for the clients and its cost would vary based on market value of these particular collaterals (Neumann et al. 2016).
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Continued.. •The clients would be receiving 5 significant broches at the amount of $.61 apiece. •The clients would be receiving single trifold brochure for the therapy of biofeedback. •The service of acupuncture would be providing 3 separate brochures at the unit price of amount $7 apiece for First visit and Q&A brochure and amount of $6.50 for steps of the care brochure (Cleverley & Cleverley, 2017).
Cost Volume Profit Analysis •For completing analysis of CVP for each alternatives of CAM, there are requirements of price per unit, VC per UOS, total variable cost, annual FC, total fixed cost per year, unit contribution margin and contribution ratio. •For the calculation of FC, hourly rate of the compensation is multiplied by number of the hours dedicated to clients per week. •For determining TFC per year, annual compensation for each alternatives are added for each alternatives. •For calculating VC for each alternatives, brochures unit cost and consumable supplies are multiplied by anticipated total number of the clients in given year (Bem et al. 2014).
Continued.. •For calculating TC, VC are added for consumable supplies and the brochures for each of the alternatives. •For determining VC per patients, TVC is divided by total number of the patients in given period of time. •The estimationof price per patient is by taking national average for each of the considered alternatives. •Unit CM is calculated by subtracting VC per UOS from price per UOS. •For the calculation of CM ratio, unit CM is divided by price per UOS. •The calculation of CVP breakeven point in sales, TFC is divided by CM ratio. •The calculation of CVP breakeven point in UOS, TFC is divided by Unit CM.
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Cost Volume Profit Graphs Price per UOSb$65.00 VC per UOSc$7.50 CM per UOSd(b-c)$57.50 CM Ratio(d/b)0.885 TFCa$58,575.00 UOS/Patients TFCe (= a) TVCf c * UOS TC e + f TR b * UOS 0$58,575.00$0.00$58,575.00$0.00 100$58,575.00$750.00$59,325.00$6,500.00 200$58,575.00$1,500.00$60,075.00$13,000.00 300$58,575.00$2,250.00$60,825.00$19,500.00 400$58,575.00$3,000.00$61,575.00$26,000.00 500$58,575.00$3,750.00$62,325.00$32,500.00 600$58,575.00$4,500.00$63,075.00$39,000.00 700$58,575.00$5,250.00$63,825.00$45,500.00 800$58,575.00$6,000.00$64,575.00$52,000.00 900$58,575.00$6,750.00$65,325.00$58,500.00 1000$58,575.00$7,500.00$66,075.00$65,000.00 1100$58,575.00$8,250.00$66,825.00$71,500.00 1200$58,575.00$9,000.00$67,575.00$78,000.00 1300$58,575.00$9,750.00$68,325.00$84,500.00 1400$58,575.00$10,500.00$69,075.00$91,000.00 1500$58,575.00$11,250.00$69,825.00$97,500.00 1600$58,575.00$12,000.00$70,575.00$104,000.00 1700$58,575.00$12,750.00$71,325.00$110,500.00 1800$58,575.00$13,500.00$72,075.00$117,000.00 Financial Data
Continued..
Conclusion •Hence, in case of Acupuncture, total fixed cost is $56,410, TVC is $3,840, VC per UOS is $24, Total cost is $60,250 and Price per UOS is $376.57. •In case of Biofeedback, TFC is $38,910, TVC is $1,526, VC per UOS is $9.54, TC is $40,436.40 and Price per UOS is $252.73. •Lastly, in case of Yoga Therapy, TFC is $28,910, TVC is $488, VC per UOS is $3.05, TC is $29,398 and Price per UOS is $183.74.
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Reference •Bem, A., Prędkiewicz, K., Prędkiewicz, P., & Ucieklak-Jeż, P. (2014). Determinants of Hospital's Financial Liquidity.Procedia Economics and Finance,12, 27-36. •Cleverley, W. O., & Cleverley, J. O. (2017).Essentials of health care finance. Jones & Bartlett Learning. •Finkler, S. A., Smith, D. L., & Calabrese, T. D. (2018).Financial management for public, health, and not-for- profit organizations. CQ Press. •Jones, C., Finkler, S. A., Kovner, C. T., & Mose, J. (2018).Financial Management for Nurse Managers and Executives-E-Book. Elsevier Health Sciences. •Kaplan, R. S., Witkowski, M., Abbott, M., Guzman, A. B., Higgins, L. D., Meara, J. G., ... & Wertheimer, S. (2014). Using time-driven activity-based costing to identify value improvement opportunities in healthcare.Journal of Healthcare Management,59(6), 399-412. •Neumann, P. J., Sanders, G. D., Russell, L. B., Siegel, J. E., & Ganiats, T. G. (Eds.). (2016).Cost- effectiveness in health and medicine. Oxford University Press.