Finance for practicing radiologists

This article reviews basic finance for radiologists. Using the example of a hypothetical outpatient computed tomography center, readers are introduced to the concept of net present value. This concept refers to the current real value of anticipated income in the future, realizing that revenue in the future has less value than it does today. Positive net present value projects add wealth to a practice and should be pursued. The article details how costs and revenues for a hypothetical outpatient computed tomography center are determined and elucidates the difference between fixed costs and variable costs. The article provides readers with the steps used to calculate the break-even volume for an outpatient computed tomography center given situation-specific assumptions regarding staff, equipment lease rates, rent, and third-party payer mix.

Key words:  Finance , break-even , net present value , outpatient imaging center , computed tomography , discounted cash flows