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Running Head: BUSINESS PLAN
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Women’s Diagnostic Center Business Plan
Catherine Alvarez
Siena Heights University
LDR 609 - Health Systems Management
Professor Fick
October 29, 2013
BUSINESS PLAN
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Women’s Diagnostic Center Budget Plan
Executive summary
Grosse Pointe Women's Diagnostic Center is an outpatient center, providing the highest
quality. We are a Breast Imaging Center of Excellence. This certification from the American
College of Radiology (ACR) recognizes breast imaging centers that have earned accreditation in
mammography, stereotactic breast biopsy, automated breast ultrasound and ultrasound guided
breast biopsy. In November of 2011, The U.S. Food and Drug Administration (FDA) approved
the first digital breast tomosynthesis (DBT). The timing is right for purchasing the recently
approved DBT because it is state of the art equipment and there few competitors in our service
area to meet the market needs. This is an alternate imaging modality that has shown high
sensitivity to dense breast tissue and is similar to CT in that images are captured in slices.
Services we provide. The Grosse Pointe Women’s Center provides the following women’s
diagnostic services:

Digital mammography

Breast ultrasound

Automated Breast Ultrasound (ABUS)

Non-surgical breast biopsy technology- Stereotactic breast biopsy

Dexa bone densitometry

An outstanding staff which includes a board certified fellowship-trained, dedicated breast
Radiologist
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Customers we serve
The service area is the Grosse Pointes that comprises of five small communities called
the Pointes. (“Suburban Stats,” 2013) listed the demographic population for women in the
Grosse Pointes including Grosse Pointe Woods, Shores, Farms, City, and Park total 19,832
women. (The Michigan Department of Community Health [MDCH], 2013) stated the number of
invasive female cancers of the breast and deaths are significantly higher in Wayne County
outside of Detroit than the state rate, a study from 2005-2009 (p.137).
The American Cancer Society (ACS) states there is a 1 and 8 risk of women developing
breast cancer in their lifetime, it attacks randomly. There is no way to prevent breast cancer,
however if found early 98% will survive the five year survival rate. This makes screening the
best tool against the fight for breast cancer. Breast density is a strong independent risk factor for
developing breast cancer. Dense breasts have been linked to an increased risk in breast cancer.
ACR stated, “Approximately 10% of the women have entirely fatty breast tissue, 80% have
either heterogeneously dense breast or breasts with scattered areas of fibroglandular density, and
10% have extremely dense breasts.” (“Breast Density,” 2013) ACS (2013), results found, “The
risk for developing breast cancer is four to six times greater for women with dense breast” (p.12).
Cancers detected in women with dense breast are larger, higher grade and more frequently node
positive with poorer prognosis. The risk of developing an interval cancer is greater in dense
breasts. ACR states, significant screening problem for patients with dense breasts are the
following:

The sensitivity of screening mammography drops from 85% to 65% in women
with dense breasts

More than 33% of breast cancers are not mammographically visible in dense
breast tissue
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According to the findings of Checka, Chun, Schnabel, Lee, and Toth (2012),
Distribution of Mammographic Density by Age Groups

74% of women 40 to 49 years of age

57% of women in their 50’s

44% of women in their 60’s

36% of women in their 70’'s (p.2)
Service definition
Digital Breast Tomosynthesis. This new imaging modality is going to revolutionize breast
imaging with better visualization. There is a reduced recall rate with fewer false positives. Using
standard 2-D for diagnostic imaging exams can be time consuming and can negatively affect
patient flow. DBT can avoid further testing and call backs for diagnostic exams thus providing
less anxiety for patients. The radiologist can see the tissue better because of the reduction of
superimposed tissue allowing the radiologist to see around overlapping structures thus improved
clarity. Mammography has always held a standard of being extremely low dose. The dose of
radiation is still below the standards set by the MSQA using the combo mode that is the 2D and
the 3D tomosynthesis in the same day. A little more dose a lot more information and still a safe.
Products and services
The digital breast tomosynthesis acquires a series of images in the following way:

Tube moves in a 15 degree arc

15 low dose images are acquired

1 image at each degree

Four second scan time

Images are reconstructed into 1 mm slices
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In combo-mode imaging, the 2D and 3D are taken in the same compression

No additional positioning for the patient while patient is still in compression
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The service is offered in the mammography room and the device is attached to the existing
Hologic Dimensions 2D mammography machine. The hours of service will be the same Monday
through Friday 8 a.m. to 5 p.m.
Competitors
There are four other breast centers in the Grosse Pointe area and none of these centers
offer the digital breast tomosynthesis mammography machine. I conducted a phone interview
with Nort Upson, a sales representative, who works for the distributor Grand X-ray that supplies
Hologic equipment. Competition in southeastern Michigan is limited to two organizations. The
McLaren Macomb hospital has one machine currently in use and their next machine is scheduled
for installation on Monday, October 28, 2013. McLaren Macomb is fifteen miles away from
Grosse Pointe. Their market has increased over ten percent since the purchase of the
tomosynthesis unit. The other organization is Karmanos Cancer Center Institute which is
approximately thirteen miles from the Grosse Pointes owns one tomosynthesis machine. Troy
Beaumont has the Hologic Dimensions 2D and is in position to add an upgrade to their machine,
but to date has not purchased one. Currently, McLaren and Karmanos are the only organizations
in southeast Michigan that are using breast tomosynthesis. McLarens and Karmanos advantage
over their competitors is women will go where the service is offered. The national average has
been at least a 10 percent increase in patient load. (N. Upson, personal communication, October
24, 2013) There are no risks or regulatory issues concerning offering this service only advantage.
The marketing theme is for women to be aware if they have dense breast. Use this strategy and
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offer the service in the community for women. This is a service that offers state of the art FDA
approved breakthrough technology that will increase cancer detection and save lives.
Target Market
Market Overview. The four major market segments are included the following list:

Age- 40 baseline or women younger who need mammogram for clinical reasons

Upon personal request for women who want DBT for their screening mammogram

Density type- Bi-RADS type 3, over 51% dense breast tissue for screening/diagnostic
mammogram

Referral from physician for clinical reasons, a diagnostic mammogram
The ACR supports an FDA mandate that dense breast tissue notification be included in the
mammogram report. Women need to ask their physicians what is on their mammogram report so
they are aware. There is a national awareness by the advocacy group “Are You Dense.” They
are dedicated to informing the public about dense breast tissue and its significance in the early
detection of breast cancer. In the state of Michigan, House Bill No. 4260 has been introduced
requiring mandatory breast density notification to women. Under this bill, woman having a
screening mammogram must be notified that dense breast tissue can increase the risk of
developing breast cancer and can obscure cancerous findings on mammography. The bill also
requires that the ACR’s BI-RADS density classifications are on the mammogram report so
women can be informed by their physicians if they might need other breast imaging in addition
to the standard mammogram. (Brinks, Lyons, Hovey-Wright, Slavens, Segal, Dillon, Lamonte,
Abed, MacGregor, Lipton and Oakes, 2013)
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The following list is the ACR’s density classifications:

BI-RADS Type 1: < 25% glandular almost entirely fat

BI-RADS Type 2: 25-50% glandular scattered fibro-glandular tissues

BI-RADS Type 3: 51-75% glandular aka “heterogeneously dense”

BI-RADS Type 4: >75% glandular
Dense breast are defined as BI-RADS type 3 and 4.
Market needs. Our target customers are women with dense breast which is forty percent of
the population, women with personal history of breast cancer and women who have clinical
findings. Volumes are likely to increase as the population ages. Today's women are more
educated and judge the quality of care by advanced technology. Patients expect the latest
technological advances and will drive out of their community to get the service. Digital breast
tomosynthesis is the latest FDA approved breast imaging equipment available. DBT is a 3D
imaging modality that is a separate procedure and is performed at the same time as the 2D digital
mammogram under compression, combo mode. The system produces images that represent thin
slices of the breast allowing radiologist to view slices 1 mm at a time. Multiple images of the
breast are acquired at different angles during a sweep of the x-ray tube which allows radiologists
to see around overlapping structures. DBT has a higher cancer detection rate. The improvements
in clinical performance, compared to 2D mammography, are significant.
Strategy and implementation
Marketing plan and overview. The marketing strategy is simple; it is differentiating our
service from the competitors. Provide extensive outreach in the community about the
tomosynthesis imaging service. Satisfied customers are our best marketing tool, word of mouth.
Our reputation will stand on its own. Our own primary care physicians (PCPs) and OB/GYNs
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will be notified of this next generation technology. In addition we will use the following sales
channels and advertising options.
Sales channels. The following is a list of targeted potential referring physicians:

Targeting Obstetricians/Gynecologists

General Practitioners

Family Practitioners

Internists

General Surgeons

Oncologist
Marketing activities. The following is a list of marketing tools that could be used:

Press release to local TV news to highlight new service

Web sites

Direct mail flyers to people in the community including postcards

Phone advertising(while on hold) when calling organization

Health fairs/Other sponsorship activities

Brochures will be distributed to physician offices

Preview slides at movie theaters

Billboards
This positions our organization to be leaders in the fight against breast cancer. We can offer
the women in our community and surrounding areas quality care. Since marketing has their own
budget, the administrative team in radiology will communicate and collaborate with them. A
future goal would be to expand market reach to the surrounding areas because of the limited
availability in region for tomosynthesis imaging.
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Strategic fit
The service relates to the organization's strategic plan to be best in class service and to be
a dominant force in Michigan. The organization has the financial strength to fund clinical
services. We are known as a national leader in delivering high quality service to our patients. The
service would allow the organization to be a leader in the industry in the region. We are well
positioned to add this service because we already own the Hologic Dimensions 2D. The 3D
tomo addition to the unit would be considered an upgrade and is much less expensive. Grosse
Pointe Women's Center could be the pilot and eventually the upgrade could be added system
wide to other mammography departments.
Organization
The Radiology Department will be responsible for directing this service. This is the most
appropriate because The Women's Diagnostic Center is part of the Radiology Department. The
steps for the patient cycle are already in place and are the same steps required for getting a
routine screening mammogram. There will be no need for extra staff at this time because our
patients that require the 3D imaging service will use the room with the upgrade and all other
patients will use the traditional Hologic Dimensions 2D room. Mammographers’ routine duties
include looking at past mammogram and the reports prior to exams. The Bi-RADS score will be
on the last year’s mammogram report in case the patient does not know her breast density.
Patient flow is as follows:
1. Patient registers in Women's Diagnostic Center with receptionist
2. Mammographer calls patient to dressing rooms.
3. Exam is taken
4. Patient is finished
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Using tomosynthesis would make the work flow more efficient compared to calling patients back
after a screening mammogram to take additional views for a diagnostic mammogram. This
service will offer improvements in both screening and diagnostic evaluations.
Financial summary
Financial highlights. State of the art equipment allows a facility to save time and cut
costs without sacrificing quality patient care. The costs for operating a breast center are relatively
fixed so increased patient volume is key. With fewer time consuming diagnostic call backs the
tomosynthesis will provide more efficient patient flow thus higher volumes. The funds needed
to purchase one Hologic Dimensions digital breast tomosynthesis unit are:

$135,000 for purchase of the digital breast tomosynthesis equipment upgrade

CPT codes are still being worked out, approximately six months to year out

Most organizations on are charging a Miscellaneous Code for approximately $50 for the
3D portion of the exam and seeing a 30 to 40% reimbursement

Average charge for a digital 2D exam is approximately $100
The source for the capital funds will be obtained through the Radiology Department. New capital
items typically carry a one-year warranty which Grand X-ray offers. The business will return to
stronger profits and gross margins after the acquisition.
The operating budget is for the Women’s Diagnostic Center only. It excludes costs such
as heat, electricity, lease, and telephone. These are all fixed cost for the total budget. The new
capital project does not affect these costs materially. Receptionist and ultrasound technologist are
from another cost center.
The new upgrade on a standalone basis with one mammographer will have a profit of
$485,000 in the first year. In addition, to these profits this upgrade will provide more efficient
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work flow which creates more patient volume in the Women’s Center. Also, profits will go up
after the first year due to higher reimbursements and expenses related to the acquisition will have
been fully paid. The only fixed cost in the future related directly to the new machine is the salary
of one mammographer. The remaining staff in the Women’s Center is a fixed cost unrelated to
the new upgrade. See complete department financials on the next page.
BUSINESS PLAN
Capital & Operating Budget Assumptions
Investment in Upgrade
Supervisor Salary
Mammographer Salary
Full Time Nurse Salary
Radiologist Salary
Basic Charge (Pre-Upgrade)
New Fee for Clients (40% of Upcharge Reimbursement)
Total New Fee - After CPT Code is Changed
Sterotactic Biopsy
Bone Density Scan
Weeks Per Year
Annual Operating Budget
Sales
New Machine Sales - First 6 Months
New Machine Sales - First Going Forward
Standard/Old Procedure Sales
Sterotactic Biopsy
Bone Density Scans
Total Estimated Sales
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$
$
$
$
$
$
$
$
$
$
150,000
75,000
60,000
75,000
250,000
100
118
150
500
250
52
$
305,500
390,000
520,000
390,000
832,000
2,437,500
$
75,000
180,000
75,000
250,000
580,000
Supplies
Sterotactic Sterile Trays
Cleaning Wipes (10 Per Week)
Gloves (3 Boxes Per Week)
Miscellaneous Supplies
Total Supplies
$
117,000
2,080
1,404
1,000
121,484
Annual Net Profit
$
1,736,016
Salaries
Supervisor
Mammographers
Full Time Nurses
Radiologist
Total Salary Costs
5-Year Return on Capital
Initial Investment
Annual Profit
Total
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
$ (150,000)
$ 1,736,016 $ 1,736,016 $ 1,736,016 $ 1,736,016 $ 1,736,016
$ (150,000) $ 1,736,016 $ 1,736,016 $ 1,736,016 $ 1,736,016 $ 1,736,016
Internal Rate of Return (IRR)
Year 1 Proceeds (Net of Investment)
Year 1 Net Present Value (15% Discount Rate)
1157%
$
$
1,586,016
1,379,144
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Implementation plan
The department director along with the manager of the imaging center must have a
strategy for acquiring capital equipment. Capital equipment takes place in stages, first the
women’s department manager looked at a needs assessment; the manager went to the director
with a request for information, request for proposal, and evaluation to get information and
proposals from Grand X-ray. The department director can directly participate in all phases but in
this situation since it is a small capital investment the process was delegated to the manager of
the Women’s Center. Initially, during the needs assessment there was input from direct users
such as the radiologist and mammographers, and the Women’s Center department management.
The final decision was made by the director of Radiology. The goal was a smooth acquisition
and installation process. Progress will be monitored throughout implementation with some face
to face meetings, mostly group emails that are essential for sharing input, and phone contact. As
the date got closer to installation, communication between the manager and Grand X-ray was on
a regular basis either through phone or e-mail. The only vendor for Hologic, Inc. in the state of
Michigan is Grand X-ray. The purchase is an upgrade to existing equipment making the
purchase agreement and process efficient and swift.
Timetable. The following identifies the process and plan to achieve the desired goal:
August 26, 3013. Manager of Women’s Center contacted Grand X-ray for purchasing
quote for upgrade to Hologic Dimensions Tomosynthesis.
September 3, 2013 Date submitted. Objective for new service: Manager of Women’s
Diagnostic Department submitted business plan to obtain executive approval from the director of
radiology for purchase for an upgrade to the Hologic Dimensions 2D mammography machine.
This is the tomo portion and is much less expensive.
September 27, 2013. Date approved.
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September 30, 2013. Manager of Women’s Center contacted Grand X-ray to set notify of
approval of project and set installation date.
October 2, 2013. Grand faxed sales agreement to Director of Radiology to sign. Signed
and returned. All administration team emailed and notified of responsibilities.
October 4, 2013. Manger of Women’s Center contacted representative from Grand and
an installation date was set.
January 6, 2014. Installation date, Grand will be installing equipment.
January 6, 2014. Supervisor of Women’s Department will adjust schedule will be for
the week for installation and applications training.
January 8, 2014. Schedule two days for application training for technologist
January 8-10, 2014. Schedule 8 hours training for radiologist and physicist
January 13, 2014. Medical Physicist provided proof the facility that all tests passed
January 14, 2014. Manager of Women’s Center submits to ACR the complete new
application and the Equipment Evaluation results
January 15, 2014. Clinical use begins
January 20, 2014. ACR approved. ACR will notify the FDA within two business days
that an accreditation application has been accepted
Regulations
MQSA Requirements prior to patient use. The American College of Radiology
Mammography Accreditation Program, (2013) requires the following:
The medical physicist must provide the facility with the written results of the Equipment
Evaluation showing that all required tests have passed. The facility, usually the manager
has submitted the complete new unit application (with the Equipment Evaluation results)
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to the ACR. Once approved, the ACR will notify the FDA (or the state certifying body)
within two business days that an accreditation application has been accepted for the new
unit. These facilities are not required to wait for a response from the ACR to begin
clinical use of the new unit since they are operating with a current MQSA certificate.
However, the Center for Medicare and Medicaid Services (CMS) will not reimburse for
examinations performed on an FFDM unit until the FDA has received notification that
your new unit has applied for accreditation. (p.7)
Once clinical use begins, the manager will be gathering information, monitoring activities and
performances to make sure the objectives are being met. The manager will continue to meet with
all stakeholders involved to look at the process and see if any improvements are needed. The
manager will make necessary adjustments so the department will meet success.
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References
Breast Cancer Facts and Figures 2013-2014. (2013). Retrieved from American Cancer Society:
http://www.cancer.org/acs/groups/content/@research/documents/document/acspc040951.pdf
Breast Density. (2013). Retrieved from American College of Radiology:
http://www.acr.org/NewsPublications/~/media/180321AF51AF4EA38FEC091461F5B69
5.pdf
Brinks, Lyons, Hovey-Wright, Slavens, Segal, Dillon, Lamonte, Abed, MacGregor, Lipton &
Oakes, (2013, February 14). House Bill No.4260. Retrieved from Legislature Michigan
Government: http://www.legislature.mi.gov/documents/20132014/billintroduced/House/pdf/2013-HIB-4260.pdf
Cancer in Michigan, 2009 updated 2013 An Assessment of the Cancer Burden in Michigan.
(2013). Retrieved from Michigan Department of Community Health:
http://www.mdch.state.mi.us/pha/osr/Cancer/CancerInMichigan2009.pdf
Checka, C., Chun, J., Schnabel, F., Lee, J., & Toth, H. (2012). The relationship of
mammographic density and age: implications for breast cancer screening. American
Journal of Roentgenology, 198(3), W292-W295.
Suburban Stats Grosse Pointe. (2013). Retrieved from Suburban Stats:
http://suburbanstats.org/population/michigan/how-many-people-live-in-grosse-pointe
The American College of Radiology Mammography Accreditation Program:. (2013). Retrieved
from The American College of Radiology:
http://www.acr.org/~/media/ACR/Documents/Accreditation/Mammography/MammoFA
Q.pdf
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