Business Plan for St. Jude Medical Center - Essay Example

? http www.stlukesmedicalcenter.com.ph/assets/images/news/cardiac02.jpg Executive Summary St. Jude Medical Center is a quality designer and producer of medical devices for cardiovascular applications, such as state-of-the-art 3D Mapping Procedures. The capital equipment which could greatly benefit Florida Hospital Heartland Medical Center are the 3D Velocity Mapping System, Workmate Recording System, and Ablation System Generator and Pump. These products will enable premiere cardiac specialists such as Dr. Dan Friedman to conduct procedures in Florida Hospital that have a high gross profit margin of 67% to 74% of the Medicare reimbursement on these cases. The acquisition of these equipment not only increases the benefit to patients at Florida Hospital, but it also has a strong potential for enhancing earnings and cost efficiency for the hospital. Proposal Florida Hospital Heartland Medical Center’s position as a leader among healthcare institutions in the country will be well served by its acquisition of St. Jude Medical Center’s product portfolio, particularly its equipment supporting cardiac ablation procedures. SJMC’s 3D Velocity Mapping System, Workmate Recording System, and Ablation System Generator and Pump will be highly useful in aiding cardiac specialists such as Dr. Dan Friedman in conducting their specialized procedures in Florida Hospital Heartland Medical. St. Jude Medical Atrial Fibrillation Division St. Jude Medical, Atrial Fibrillation Division, Inc., designs, manufactures and markets medical devices for cardiovascular applications. These devices include disposable catheters and catheter accessories such as percutaneous catheter introducers, diagnostic guidewires, electrophysiology catheters, and bipolar temporary pacing catheters. Our company offers the industry’s broadest product portfolio for the Electrophysiology (EP) lab, aiding physicians in the diagnosis and treatment of cardiac arrhythmias. We are developing synergies across our broad portfolio, exploring future potential applications in the areas of percutaneous coronary intervention procedures, left atrial appendage closure, transcatheter heart valve repair and replacement, and neurostimulation lead placement. Among our company’s customers are hospitals, hospital purchasing groups, and original equipment manufacturers (OEMs). St. Jude Medical, Atrial Fibrillation Division, Inc. is a subsidiary of St. Jude Medical, Inc., a leading developer of medical technology and services that focus on putting more control into the hands of those who treat cardiac, neurological and chronic pain patients worldwide. We are dedicated to advancing the practice of medicine by reducing risk wherever possible and contributing to successful outcomes for every patient. St. Jude Medical has four major focus areas that include: cardiac rhythm management, atrial fibrillation, cardiovascular and neuromodulation. St. Jude’s 3D Mapping Procedures In 2002, St. Jude Medical acquired Endocardial Solutions and added the EnSite 3D Mapping System to their product line. The EnSite 3D Mapping System is one of two primary cardiac mapping systems that are available today. The first commercially available system was the Carto Electro-Anatomical Mapping System, of Biosense Webster; five years after Carto was introduced, the Endocardial released the EnSite 3D Cardiac Mapping System. The two systems employed different mechanisms: the Carto system employs a magnetic field in navigating a catheter, and uses a chip that enables the system to detect its location within the magnetic field; the EnSite system, on the other hand, uses an Array that applies non-contact unipolar mapping which is revolutionary even among experts in the field. Subsequently, Endocardial Solutions introduced NavX, an impedance-based navigation system that constituted Endocardial’s own version of sequential contact mapping. Dr. Daniel E. Friedman, M.D. Dr. Dan Friedman is a physician with 8 years of experience and practices in Internal Medicine, Clinical Cardiac Electrophysiology, Cardiovascular Disease, and Cardiology. Dr. Friedman’s specialty is in cardiology, clinical cardiac electrophysiology, and internal medicine. For each of these specialties, Dr. Friedman is board certified, attesting to his advanced clinical training and education, and his knowledge of the best treatment methods in these areas. Dr. Friedman’s holds license to practice in these areas, both in the states of Florida and Missouri. He obtained his medical degree in 2001 at the Tulane University School of Medicine in New Orleans, and completed his residency at the May Grad School Med/Mayo Foundation. He has special expertise in Device Interrogation ICD Devices CRT Devices Pacemaker Devices VT Ablation SVT Ablation Heart Rhythm Disorders. Dr. Friedman is also a Healthgrades Recognized Doctor, and he speaks 12 languages. Among all physicians practicing in the United States, Dr. Friedman ranks among the top 10% in terms of procedures costs to the hospital. Cost projections Dr. Friedman is an expert in cardiac ablation procedures, and conducts a good number of these types of surgery, particularly right sided heart procedures – i.e., Right atrial flutters, SVT or Superventricular Tachycardias, and AVNRT or Atrioventricular Tachycardias. While the medical benefits to the patients of these procedures are of themselves worthy of favorable consideration, the financial advantages provide further motivation Cost of Equipment to the Hospital 3D Velocity Mapping System $195,000 Workmate Recording System 125,000 Ablation System Generator and Pump* 15,000 Total $335,000 * For use with ablation catheters to create legions in the heart and rid arrhythmias SVT Procedure Specific Costs Coronary Sinus Catheter Inquiry 4French Ref# 81531 $500 Velocity Patches Ref# 100003331 950 Diagnostic catheters CRD2 Ref# 402012 150 Diagnostic catheters JSN Ref# 401451 95 Ablation Catheter Safire Blu Duo/ (Flexibility coming in Q1 2014 1,700 Total case cost to hospital for SVT $3.395 Right Atrial Flutter Case Specific Costs Coronary Sinus Catheter Inquiry 4French Ref# 81531 $500 Velocity Patches Ref# 100003331 950 Diagnostic catheters CRD2 Ref# 402012 150 Diagnostic catheters JSN Ref# 401451 95 Ablation Catheter Safire TX Ref# 402841 1,000 Total case cost to hospital for Right Atrial Flutter Case $2.695 Revenue projections Dr. Friedman’s cost efficient approach provides attractive gross profit potentials for the hospital. This is because current reimbursement from Medicare at Florida Hospital Heartland Medical Center well exceeds defrayal of the specific costs to the hospital of undertaking the procedures. The following table illustrates the potential high revenue margins that the procedures can generate for the hospital with the use of St. Jude’s 3D Mapping equipment and its disposable catheters and supplies. Revenue (Cost) Specific Cost of Procedure SVT Procedure Right Atrial Flutter Case Medicare reimbursement $10,214 $10,214 Case cost to hospital (3,395) (2,695) Gross profit to hospital $ 6,819 $ 7,519 Gross profit margin 66.8% 73.6% The foregoing tabulated figures are depicted in pie graph form in the following diagrams. Recommendations Physicians with highly specialized skills could perform a host of life-saving procedures, but only if they are equipped with the most advanced equipment technology has to offer. St. Jude Medical’s product offerings in the area of cardiac ablation procedures will provide Florida Hospital such capability in a cost effective manner. Assuming that only two cases of each type of procedure (SVT and Right Atrial Flutter) are conducted in each month, the initial investment in the capital equipment amounting to $335,000 will be fully recovered by Florida Hospital Heartland Medical Center within the first 12 months. The acquisition of these equipment is financially advantageous to all parties concerned – patients, doctors, and the hospital – in the form of lower costs and quality performance for value. Conversely, the absence of such equipment will be a limitation upon the capabilities of the hospital to render vital life-saving procedures the need for which continues to increase daily. More details are provided in the attached product literature. Read More