Vorlon Whispers

Getting a CT Scan for the Vorlon Wife

I’ve been thinking of sending the Vorlon Wife to get a CT scan. Since my condition was a complete surprise and I had few symptoms, and she has been exposed to many of the same environments as me, I think it makes for a wise move.

One problem is, I’m pretty sure the insurance company will not pay for it. That’s means I would have to foot the whole bill. I happened to see how much the radiology lab charges the insurance company for my CT scan. It was $800. While that’s quite a bit of money, particularly for the Vorlon’s at this point in time, I’ve paid more than that to get my car repaired.

Then I got to thinking. Suppose the CT scanner costs about $2 million. In economic terms we call that fixed costs. That machine cost them $2 million whether they do one scan a month or 10,000. Obviously they would rather do 10,000 a month. The more they use the machine, the more money they make. As readers of the blog will remember, I never begrudge anyone honestly making a buck.

Now let’s look at the variable costs. I can see three, the electricity to run the machine, the tech that performs the scans, and the tech that reads the scans. Getting a scan takes about 20 minutes. If the tech costs the radiology lab $60 per hour, then that 20 minutes cost $20.

The tech that reads the scans probably gets a higher rate, and it may take longer. I’ll guess he/she costs the radiology lab $100 per hour and takes an hour to read the scan. Then the cost to read the scan is $100.

Electricity – let’s put the cost of the electricity to run the machine for the 20 minutes at $10. That’s probably more that required.

Add them all up and the radiology lab’s out of pocket expenses at $130.

Now follow my logic carefully here. If I offer to buy a CT scan from them for anything over the $130 out of pocket costs, it money towards their fixed costs they wouldn’t otherwise get. However, this ONLY applies if the machine sits idle for any period of time. There are many businesses that have a cost structure like this. Since I know they charge the insurance company $800, I have the potential to buy a CT scan at somewhere between $800 and $130.

Fortunately there are two radiology labs in town. That means I have the potential to get them to bid against each other.

Now it may well be that the make so much money, they could care less if they sell me a CT scan or not.

There is one indicator that my whole scenario will not work. Both radiology labs are only open during the day and closed on weekends. If they really wanted to maximize the profits on the CT scanners, they would be running them 24x7. Since they don’t it indicates to me, they’d doing very well just running on the limited hours they do.

But it could also indicate they have spare capacity. They may not have enough business to run for more hours than they do. Those $2 million machines may sit idle for some part of the day.

I think it’s something I’m going to explore – after I clear the concept with our doctor. If he says OK, perhaps I’ll start taking bids.

Posted by The Vorlon at July 6, 2006 7:20 PM