Level II Neonatal Intensive Care Unit Cost Avoidance in the Colorado Springs Catchment Area.
Abstract
Due to increased utilization of neonatal intensive care services in the Colorado Springs catchment, the elimination of Fitzsimons Army Medical Center's neonatal intensive care unit (NICU), a monopoly market for NICU services in Colorado Springs, and the high altitude effects on pregnancy encountered in Colorado, local CHAMPUS expenditures for NICU services exceeded $2 million in 1994. The purpose of this research was to determine if Evans Army Community Hospital should enter the market for Level II NICU services in Colorado Springs. A make or buy project evaluation was conducted by discounted cash flow analysis over a six year term. Profitability measures were adjusted for capital risk using 256 spreadsheet simulations to conduct a sensitivity analysis for optimum, minimum, and most likely scenarios. A subjective consideration of the project's social value was accomplished by Delphi panel using a qualitative analysis of both options. The project's expected net present value under the most likely case was $5,348, with a 0.48 probability of break even cash flow. The qualitative analysis favored the make option. Based on marginal profitability of the cash flow analysis, demographic changes at Fort Carson in force structure, budget constraints, health services manpower reductions, and business strategy preparatory to TRICARE the project was not recommended for implementation.
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 01, 1995
- Accession Number
- ADA314104
Entities
People
- Richard S. Ellenberger
Organizations
- Academy of Health Sciences