HSA525 Week 4: CVP Analysis for CAM Alternatives at Benson Medical
VerifiedAdded on 2022/08/16
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This report presents a cost volume profit (CVP) analysis for Benson Regional Medical Center, focusing on the integration of complementary and alternative medicine (CAM) services. The analysis examines three CAM alternatives: acupuncture, biofeedback, and yoga therapy. The report includes financial assumptions, intervention costs, and calculations of fixed costs, variable costs, total costs, and price per unit of service. The CVP analysis determines the breakeven points for sales and volume for each CAM alternative. The report provides a detailed breakdown of the financial metrics and concludes with the CVP graphs for each intervention. The assignment aims to assist in the decision-making process for incorporating these CAM services into the center's offerings.

HEALTH FINANCIAL
MANAGEMENT
MANAGEMENT
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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.
• 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.
• 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.
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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).
• 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 pain of back for the clients. It is considered
to be safe, when it is performed by licensed or certified
practitioners (Jones et al. 2018).
• 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 pain of 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).
• 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).
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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).
• 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).
• 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.
• 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.
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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).
• 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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• 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).
• 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).
• 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).
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