Cost Benefit Analysis for Transcription

SITUATION: You are evaluating other alternatives for your transcription needs as you are continuously plagued with backlogs due to staffing shortages. You are analyzing two alternatives are listed below as well as the present situation as a third alternative. A full-time work week at your facility is 37.5 hours per week. All other information is included below.

1) Determine the cost of each alternative including personnel, training, equipment costs and any other stated associated costs. Statistical information and costs follow the statement of the alternative.

2) Define the advantages and disadvantages of all 3 alternatives remembering that there are other aspects than the financial impact that must be considered in making a decision.

3) Determine which alternative you would choose and justify your decision.

ALTERNATIVE I:

Eliminate in house transcription area and send out all transcription work to an outside service. Retain half-time clerk to distribute and file reports who will then report to assistant director.

ALTERNATIVE II:

Retain one transcriptionist for STAT work. Send all other transcription to the outside service. Retain half-time clerk for filing and distribution. Both will report to assistant director.

ALTERNATIVE II:

Continue with current situation of in-house transcription as stated below. .

BASELINE INFORMATION:

Current Personnel:

1 Transcription Coordinator/Supervisor $62,000 annual salary

(Status: Exempt - not eligible for O/T)

3 Full time transcriptionists $22.00 per hour

1 Half time transcriptionists $22.00 per hour

1 Half time clerk $15.50 per hour

Benefits 28% (full time workers only)

Hiring/Training Costs 7% of annual base wage

Additional work hours 12 hours extra per week average per transcriptionist

2 hours per week for supervisor per week

3 hours per week for clerk

Equipment:

Lanier Digital Dictation System (leased at $3200/month)

4 Lanier Transcribers (owned)

5 PCs (owned) Plan to upgrade all PCs at $1250 each

Equipment Maintenance

$357.00 annually for each piece of owned equipment

Other costs:

Copies $.035 per page (all reports are copied for distribution to providers)

Types of Reports:

Total STAT (Included in total)

Discharge Summaries 21215

Operative Reports 10293 6500

Consultations 15963 1850

History & Physical Reports 20842 3359

60% of Discharge Summaries are two pages long

50% of operative reports are two pages long

30% of consultations are two pages long

100% of H&Ps are two pages long

Service Costs

Discharge Summaries and all non-STAT work $4.50 per page

STAT reports $6.00 per page

One copy of each report included with returned work for provider.

HINT:

Consider who gets overtime pay and at what rate it is paid.