Write a brief description of the data shown and recommendation on whether or not to pursue the project, based on the results of your analysis. Include sensitivity analysis and information on the most important assumptions you made in your analysis

The report should be formatted for easy readability and can include bullet points, charts, graphs and tables. The beginning of the report should include an executive summary that states your recommendation and explains whether the project will have a positive or a negative financial impact, the size of that impact, and the most important factors driving that impact. Background information: Your annual ED volume is $35,000$ visits per year. You expect this volume to be consistent going forward. Of these visits, historical data from your hospital suggest about $3\%$ have required a chest tube. After the closure of another local hospital this percentage grew to $6\%$ and you expect it will remain stable going forward.

You have identified a chest tube placement simulator products that a patient actor can wear. The cost of the simulator is $$2,200$ and each simulation requires a $$250$ replacement tissue pack. Moreover, conducting your simulation would require recruiting a patient actor and providing $2$ hours of training for the actor plus $45$ minutes of the actor$$s time for each training session. You estimate that the hourly wage for an actor would be $$20$ per hour and that you would not have to pay fringe benefits. There are $10$ ED physicians who will require $10,1$ hour training session each. You expect to provide yearly refreshers for each physician for the next five years. After that you hope that your physician staffing will have stabilized and the need to refresher training will have decreased. Your ED physicians earn, on average $$208$ per hour including fringe benefits like health insurance and retirement. To avoid creating problems with physician coverage in the ED you plan to train physicians immediately before or after their shifts, but this will require that you pay the physicians for additional time training.

You hope that your training will make physicians more comfortable placing chest tubes and, as a result, there will be a reduction in complication rates.

The most common complication is having to re$-$insert a chest tube after the patient is admitted to the hospital. This procedure is conducted by one of the surgeons on call and these surgeons are not employed by the hospital. Surgeons bill insurers on average $$650$ for this procedure. Patients that experience a chest$-$tube re$-$insertion will have a hospital stay that is$,$ on average, $3$ days longer than patients that do not require a re$-$insertion. The average cost to the hospital of providing a day of care is $$375.$ The hospital$$s chargemaster lists the hospital$$s gross charges for a day of care at $$10,000.$ Roughly $25\%$ of patients that receive a chest tube in the ED require a re$-$insertion. Two percent of patients will actually require video$-$assisted thoracoscopic $($VATS$)$ surgery to correct complications associated with an improperly placed chest tube. The cost to the hospital for the VATS procedure, including nursing time and supplies, is $$2,000.$ All of the hospital$$s payers reimburse pre$-$defined rates for a DRG $($none reimburse on a per$-$diem or percent of charges basis$).$ Assume that neither re$-$placement of a chest$-$tube or VATS will change the DRG assigned to patients needing a chest tube.

You aren$$t sure what kind of complication reductions to expect from the training. The vendor assures you that number of reinsertions and the number of VATS procedures required will drop by $50\%$ each. You call a few friends working at other community hospitals. One says that their ED physicians are fairly experienced and only $18\%$ of their patients with chest tube placements require a reinsertion and $0\mathrm{.}1\%$ require VATS. A friend at a level $1$ trauma center that sees a large number of chest trauma cases says that their reinsertion rate is $10\%$ and only $0\mathrm{.}25\%$ of patients require VATS. Another friend at a similar medical center actually used the training program with her physicians. She only saw a $2\%$ reduction in the reinsertion rate and the percent of patients requiring VATS was virtually unchanged.

You contact the finance department at the hospital and find out that the hospital typically uses a discount rate of $8\%.$ You assume no inflation in physician salaries, prices and hospital costs over the next $5$ years. This is a bit unrealistic but, for this case, not a bad simplifying assumption.