Purchasing A CT Scanner Benefits And Costs Essay

Length: 9 pages Sources: 4 Subject: Healthcare Type: Essay Paper: #38849006 Related Topics: Fixed Costs, Radiology, Discourse Community, Hospital
Excerpt from Essay :

¶ … Purchasing a CT Scanner

Benefits and Costs of Purchasing A CT Scanner: A Comprehensive Evaluation

"Each year, buyers of CT scanners faced much-improved choice sets; the question is how valuable those improvements were," and thus this is a review to explore whether or not the acquisition of CT scanners are actually worth a hospital committing to such an expensive effort (Ellickson et al. 2001 p 544). Overall, the health benefits of CT scans are often extremely positive to patient care. Still, the machines and organizational costs tied to their maintenance are often costly to both the organization and the patients. Yet, the purchase of such technology does provide greater quality and efficiency within patient care strategies, from a health and organizational perspective. In such, it is clear that the positives of purchasing such technology would then outweigh any potential negatives.

CT scanners are an impressive testament to the evolution of modern medical technologies. Computed-tomography (CT) was invented by the Nobel Prize winning Godfrey Hounsfield and was first installed in a hospital in England in 1971 (Beutel et al. 2000). This technology proves so impressive because it creates a three dimensional image of the internal workings of the body. In fact, CT "is the term generally used to characterize the imaging technique in which transmission measurements of a narrow beam of x rays, made at several different angles or projections around a given object, may be used with an appropriate computer program or algorithm to re-synthesize particular slices of interest within the object," (Beutel et al. 2000 p 512). The image clarity and depth is unprecedented in comparison to other traditional technologies for internal imaging. It is also a premium tool in prevention strategies, allowing patients to catch potential issues much earlier than waiting for symptoms to arrive.

There are now a number of very different models that use various technologies for specific specialties. The complexity of the machines is astounding. Modern research labels them as "one of the most remarkable medical innovations of the last few decades," (Ellickson et al. 2001 p 544). Unfortunately, this innovation does come with a steep price tag. The essential costs of the machines depend on model and year made, but could range from the $50,000 range to hundreds of thousands of dollars for more recent and up-to-date equipment. More complicated equipment specified for cardiology purposes, also known as CT angiograms, can range upwards of a million dollars (Berenson & Abelson 2008). These machines can be purchased used or new, with various options of single slice or multi-slice technology, which can take up to 320 slices (Beutel et al. 2000). Multi-slice has proven incredibly useful in a number of contexts, including using CT scanners to examine potential cardiac issues in patients, thus making them more advantageous than the older single slice devices. It typically provides up to four scans (Beutel et al. 2000). However, these devices may be much more expensive, but "such scanners may significantly reduce the scanning time for acquiring volume data and for improving longitudinal spatial or z-axis resolution," (Beutel et al. 2000 p 537). Does the cost justify the quality? A number of elements within the healthcare organization must be explored in order to mist effectively answer this imposing question.

There is research that shows acquisition of such expensive technology only worsens the monetary burden placed on the patients. This is clearly a major negative element within the use of CT scans. Some research even states that CT scans are often used in place of older techniques without having much better results, and only carry a higher price tag for the patient. Here, one New York Times article states that "A faith in innovation, often driven by financial incentives, encourages American doctors and hospitals to adopt new technologies even without proof that they work better than older techniques," (Berenson & Abelson 2008 p 1). With healthcare companies promoting the use of new -- and expensive -- technologies, the additional cost to the patient seems incredibly unfair. Pharmaceutical and Research companies are marketing the latest technologies at a...


Here, the same article posits that "Some medical experts say the American devotion to the newest, most expensive technology is an important reason that the United States spends much more on health care than other industrialized nations -- more than $2.2 trillion in 2007, and estimated $7,500 a person, about twice the average in other countries -- without providing better care," (Berenson & Abelson 2008 p 1). Is this cost justifiable? Hospitals do not pay these increased costs alone for the newest technologies in the medical field. And so, the patient is left having to deal with the burden of increased financial costs. This is at a time where health insurance is now increasing overall costs, without much increasing coverage. In fact, "healthcare premium costs have continued to rise at rates as high as 14% per year," (Hough 2008 p 81). Is another increase of cost to the patient necessary?

In addition, there will be increased demands of the department which will force the organization to have to spend money and effort to rework in anticipation of the CT scanner. In terms of departmental costs, the acquisition of a CT scan paces new needs on the hospital staff. There is a need to develop new measures of quality control and maintenance; "an effective monitoring and control system needs to be established" in order to get the most optimized results from the purchase (Liu et al. 2000 p 163). There are clearly also needs for expansion of the radiology department which would require intensive training that may also present up front costs associated with the purchase of a CT scan.

Still, there are a number of positive elements in the purchase of a CT scanner. Revenue is a major justification of the enormous costs of the innovative technology. Implementation of CT scans in care strategies can help increase hospital revenues. Hospitals traditionally bill patients for CT scans between $500 and $1,500 for each test "which were given to more than 150,000 people in this country last year [2007] at a cost exceeding $100 million," (Berenson & Abelson 2008). This can provide extra funding for increases in operating and staffing costs associated with the inclusion of such complex technologies. Here, the examination invokes the example of Liu at el. (2000). This research examines the introduction of CT scans in Chinese hospitals was regulated to fit a price point that would help encourage hospitals around the region to adopt such practices and shows how CT scans can be effective in generating a profit for hospitals. According to the research, "hospital managers use profitable products to cross-subsidize under-priced products," (Liu et al. 2000 p 161). The additional revenue helps serve as a buffer zone that will eventually decrease upfront costs associated with buying such a complicated system. These revenues have often been used by organizations to hire more effective staff. Here, additional research shows that "Fees from imaging have become a significant part of the cardiologists' income -- accounting for half or more of the $400,000 or so that cardiologists typically make in this country," (Berenson & Abelson 2008 p 1). More complicated technology requires more knowledgeable staff. This does have a major impact on costs to employ staff members, and additional revenues brought in will help justify those increased annual expenses. Additionally, CT scans generate even more revenue when doctors actually find issues in the patient with the use of the scan. Problems caught by the CT scan then require action, and sometimes surgery -- which can add thousands of dollars to the revenue made by a single patient. Moreover, having CT scans in house limits the revenue lost to other facilities. When a hospital does not have a CT scan, patients in need of such services are sent elsewhere for the diagnostic tests, which are then brought back to the original physician. This forces patients to leave the hospital for another facility, and also looses insurance and copayments to that facility as well.

Moreover, the acquisition of a CT scanner will also serve to increase overall hospital productivity. Essentially, such a purchase will focus on improving the ability for physicians to diagnose and watch patient conditions . Previous technologies have only "minimal success in penetrating in the medical-imaging department," and thus are not as efficient as detecting and monitoring issues (Beutel et al. 2000 p 512). The ability to increase overall quality helps improve organizational function ability and productivity. Research on healthcare management strategies does show that the higher the quality, the more likely productivity will rise as well. Here, Hugh (2008) states that "Better quality results in less rework, fewer mistakes and delays, and a better use of time," which essentially makes for a more productive healthcare facility (p 89). This reduces later potential costs of having to repeat procedures or redo possible mistakes. Attention…

Sources Used in Documents:


Berenson, Alex & Abelson, Reed. (2008). Weighing the costs of a CT scan's look inside the heart. The New York Times. Web. http://www.nytimes.com/2008/06/29/business/29scan.html?pagewanted=all

Beutel, Jacob; Kundel, Harold L.; & Van Metter, Richard L. (2000). Handbook of Medical Imaging: Volume 1 Physics and Psychophysics. The International Society for Optical Engineering.

Ellickson, Paul; Stern, Scott; & Trajtenberg, Manuel. (2001). Patient welfare and patient compliance: An empirical framework for measuring the benefits from pharmaceutical innovation. Medical Care Output Productivity. University of Chicago Press. 537-554. National Bureau of Economic Research. Web. http://www.nber.org/chapters/c7641.pdf

Hough, Douglas E. (2008). The Business of Healthcare. Greenwood Publishing Group.

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