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Report on Appraisal of Proposed Investments in Scylace Hospital Cardiac Clinic

Executive Summary

You are the general manager of the Scylace Hospital Cardiac Clinic. The clinic conducts a variety of procedures, including diagnostic procedures, minor surgery and the prescription of medicines. Most patients at the clinic are outpatients and you are not responsible for accommodation for in-patients or for patient transport and you are not responsible for managing the costs of these services.

Your responsibilities are for what happens in the clinic. Scylace Hospital is run by NHS Scylace, which is part of NHS Scotland. You are responsible for the costs of running the cardiac clinic. The cost includes salaries for all staff, including consultants, nursing staff and ancillary staff. Your costs also include an allocation of cleaning and catering contracts which are managed centrally within the hospital. You do not have any authority to recruit new staff or to make staff redundant but you can make recommendations on staffing levels to the Human Resources Director and you can reasonably expect your recommendations to be acted on.

You are responsible for approving all orders for supplies, services and equipment, although orders for anything costing over must be also be approved by the Director of Finance. In appraising capital spending proposals, NHS Scylace uses a discount rate of. The Finance Director has asked you for a report on the following two developments.

A new computer tomography machine is available, costing, including installation costs. The acquisition of the new machine would mean that the existing machine would be sold for an estimated. The new machine produces images which are more accurate and easier to interpret than existing technology. Use of the new machine would save an estimated in energy costs, materials costs and diagnostic consultants’ costs in the first year of use. However, it would also require additional staff training costing, with refresher training every years costing. The new machine can be purchased with a maintenance contract costing and renewable every years.

The maintenance contract must be paid for in advance, that is, the first payment of is to be made at the time when the machine is delivered and further payments of are to be made every years if the maintenance contract continues. After the first year, it is anticipated that the efficiency savings will feed through to consultants requesting higher volumes of computer tomography scans, reducing the annual savings to per year from the second year onwards. The Finance Director has asked you to make a recommendation on whether to purchase the new computer tomography machine.

Both UK and Scottish government ministers are enormously enthusiastic about a new developing technology, Settee Surgeon, which will enable people to perform simple open-heart surgery on themselves in their own homes. NHS Scotland has been given a target to ensure that of all NHS heart surgery in Scotland is to be performed at home using this technology by.

Settee Surgeon’s developers say that early testing results are very encouraging, although they predict that a small proportion of users will still require some further hospital treatment after  their home surgery. The impact of this new technology is difficult to predict. For the financial year ending, the board of NHS Scylace have asked the hospital cardiac clinics to be prepared for anywhere between of all heart surgery currently conducted in the clinic to be conducted at home using Settee Surgeon, compared with 0% at present.

Scylace Hospital Cardiac Clinic currently conducts heart valve replacement operations per year. Following extensive research, NHS Scotland have indicated that this is an especially suitable procedure for the use of Settee Surgeon and that up to of heart valve operations could be performed at home using this technology 

Prepare a report addressed to the Finance Director containing the following sections

Part I – Title, Executive Summary and Introduction

(a) Front cover with title and addressee

(b) Executive Summary

(c) Introduction

Part II – Computer Tomography Machine

(d) Method for appraising the proposed investment in the proposed new computer tomography machine

(e) Appraisal of the proposed investment in the new computer tomography scanner

(f) Conclusions

(g) Recommendations

Part II – Heart Vale Replacement Surgery Budget

(h) Flexible budget for heart valve replacement surgery

(i) Discussion of the use of resources if the number of heart valve replacement operations is reduced

(j) Conclusions

(k) Recommendations

Part III – References

(l) Reference list

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