After reading the Boston Children's case.

Answer the following:

1. Analyze the market and competitive forces faced by Boston Children's Hospital. What are BCH's strengths, weaknesses, opportunities, and threats?

2. In this industry situation, why should clinical department heads, such as Drs. Meara and Waters, be interested in developing more accurate costs for their procedures?

3. Use the accompanying Excel worksheet to calculate the costs and margins of the three different office visits using:

a. RCC method

b. TDABC method

4. What explains the difference in costs using the two methods?

5. Suppose DPOS dedicates the following resources to handle all office visits: 2.5 surgeons, 2 Ambulatory Service Representatives, 2 Registered Nurses, and 1 Clinical Assistant. During the year, the office performs 4,000 Plagiocephaly visits, 2,200 Neoplasm visits, and 1,800 Craniosynostosis visits. Calculate the quantities and costs of used and unused capacity for the four types of personnel, and the total cost of unused capacity for the year. How can Dr. Meara reduce the costs of unused capacity?

6. Use the accompanying Excel worksheet to calculate the costs and margins of the three different orthopedic casts using the TDABC method.

7. Compare the TDABC costs and margins with those calculated using the hospital's existing RVU system. What differences occur and why?

8. Should the two TDABC pilots be extended throughout the hospital, or should senior management just allow such local initiatives to arise spontaneously based on local physician interest?