Mayo Clinic is assessing its COGS for the previous fiscal year:

Requirements:

• Calculate the COGS for healthcare services using the formula: COGS = Direct Medical Costs + Allocated Facility Overhead.
• Present a detailed COGS table with the following values:
  • Direct Medical Costs: $15,000,000
  • Allocated Facility Costs: $5,000,000

• Recommend strategies to reduce COGS by 12% through efficiency improvements.
• Discuss how reducing COGS aligns with Lean healthcare principles.
• Provide a financial projection demonstrating potential cost savings for Mayo Clinic.

COGS Table:

Category	Amount ($)
Direct Medical Costs	$15,000,000
Allocated Facility Costs	$5,000,000
Total COGS	$20,000,000