SaskMedical Diagnostics (P.C.) BJORN HUNTER

SaskMedical Diagnostics© (P.C.) Bjorn Hunter
SaskMedical Diagnostics© (P.C.) Business Plan
Prepared for Dr. Painter
By Bjorn Hunter
MBA 992
3 June, 2016

Table of Contents
1.0 Executive Summary………………………………………………………………………..1-2
2.0 Introduction………………………………………………………………………………..3-5
2.1 Proposed Business…………………………………………………………………..3-4
2.2 Positioning Statement………………………………………………………………….4
2.3 Goals and Objectives……………………………………………………………......4-5
3.0 Industry Overview…………………………………………………………………………...6
4.0 Operations………………………………………………………………………………...7-23
4.1 Organizational Structure…………………………………………………………….7-9
4.2 Development Plan………………………………………………………………….9-10
4.3 Site Plan……………………………………………………………………………...11
4.4 Floor Plan…………………………………………………………………………….12
4.5 Work Process Plan………………………………………………………………..12-13
4.6 Quality Control Program…………………………………………………………14-15
4.7 Average Work Schedule………………………………………………………….15-17
4.8 Suppliers and Service Providers……………………………………………………...18
4.9 Capital Expenditures……………………………………………………………...19-20
4.10 Capital budget ……………………………………………………………………21
4.11 Operating Expenses (2020-2025)………………………………………………...21
4.12 Operating Expenses (2026-2030)………………………………………………...22
4.13 Cost of Revenues…………………………………………………………………23
5.0 Human Resources……………………………………………………………………….24-35
5.1 Job Descriptions and Qualifications……………………………………………...24-26
5.2 Work Schedule for Medical Director/Radiologist……………………………......26-27
5.3 Work Schedule for Radiologists……………………………………………………..27
5.4 Work Schedule for MRTs……………………………………………………………28
5.5 Work Schedule for the Secretary and Secretarial Assistant………………………….29
5.6 Work Schedule for Custodian………………………………………………………..30
5.7 Compensation and Benefits………………………………………………………31-34
5.8 Training and Education…………………………………………………………...34-35

6.0 Marketing………………………………………………………………………………..36-51
6.1 Market Demand for MRI Services………………………………………………..36-38
6.2 Competitor Analysis……………………………………………………………...38-41
6.3 Customer Analysis………………………………………………………………..41-42
6.4 Target Market…………………………………………………………………….42-44
6.5 Services Offered………………………………………………………………….44-46
6.6 Revenue and Service Level Targets………………………………………………46-47
6.7 Distribution Strategy……………………………………………………………...47-48
6.8 Pricing Policy………………………………………………………………………...48
6.9 Segmentation, Targeting and Position……………………………………………….49
6.10 Marketing Strategy and Advertising Budget…………………………………50-51
6.11 SWOT/TOWS Summary of Marketing Strategy………………………………...51
7.0 Accounting and Finance………………………………………………………………...52-60
7.1 Projected Profitability………………………………………………………………..52
7.2 Sensitivity Analysis………………………………………………………………53-54
7.3 Break Even Analysis……………………………………………………………...54-55
7.4 Ratio Analysis…………………………………………………………………….56-57
7.5 Risk Analysis……………………………………………………………………..58-60
8.0 Business Plan Summary………………………………………………………………...61-63
9.0 References………………………………………………………………………………..64-67

List of Tables
Table 1: Summary of suppliers and service providers…………………………………………...18
Table 2: Summary of capital expenditures………………………………………………………19
Table 3: Summary of capital expenditures for furniture………………………………………....20
Table 4: Summary of capital expenditures for furniture continued……………………………...20
Table 5: Capital budget summary………………………………………………………………..21
Table 6: Summary of operating expenses from 2020-2025……………………………………...21
Table 7: Summary of operating expenses from 2026-2030……………………………………...22
Table 8: Summary of cost of revenues for SaskMedical Diagnostics…………………………...23
Table 9: Job Descriptions and required qualifications for staff at SaskMedical Diagnostics…...24
Table 10: Planned work schedule for the Medical Director of SaskMedical Diagnostics………26
Table 11: Planned work schedule for radiologists……………………………………………….27
Table 12: Planned work schedule for MRTs…………………………………………………….28
Table 13: Planned work schedule for secretary and secretarial assistant………………………..29
Table 14: Planned work schedule for custodian…………………………………………………30
Table 15: Projected salaries and wages for staff and projected EI and CPP benefit costs………31
Table 16: Projected worker’s compensation and holiday pay expenses for staff………………..33
Table 17: Main MRI clinics in Alberta and Saskatchewan……………………………………...39
Table 18: Percentage of Canadian operating funds by source…………………………………...41
Table 19: SMA pricing guidelines for MRI exams……………………………………………...45
Table 20: Targeted cities with population and expected demand of private MRI services……...49
Table 21: Pro Forma Income Statement from 2020 to 2030…………………………………….69
Table 22: Pro Forma balance statement from 2017 to 2025……………………………………..70
Table 23: Pro forma balance statement from 2026 to 2030……………………………………...71
Table 24: Pro forma retained earnings from 2017 to 2030………………………………………72
Table 25: Predicted economic variables from 2020 to 2030…………………………………….72
Table 26: Pro forma cost of revenue from 2020 to 2030………………………………………...72
Table 27: Pro forma cash flow statement from 2017 to 2030……………………………………73
Table 28: Pro forma revenues from 2020 to 2030……………………………………………….74
Table 29: Pro forma capital budget from 2017 to 2030………………………………………….74
Table 30: Financing budget with equity debt breakdown for SaskMedical Diagnostics………..74

Table 31: Pro forma operating expenses from 2017 to 2030……………………………….........75
Table 32: Pro forma total salary and wages……………………………………………………...75
Table 33: Pro forma annual salary and wages……………………………………….…………..76
Table 34: Pro forma benefit expenses……………........................................................................76
Table 35: Pro forma marketing expenses………………………………………………………...76
Table 36: Pro forma debt amortization schedule………………………………………………...77
Table 37: CCA depreciation schedule by asset class…………………………………………….77
Table 38: Tax schedule for federal, provincial and property tax………………………………...78
Table 39: Projected taxable income and after-tax income……………………………………….78
Table 40: Rates used for the calculation of tax…………………………………………………..78
Table 41: Sensitivity analysis of projected cash flows (Base case and 1% case)………………..80
Table 42: Sensitivity analysis of projected cash flows (2% case and 3% case)…………………80
Table 43: Sensitivity analysis of projected cash flows (4% case and 5% case)…………………81
Table 44: IRR at different annual service levels and market exam price discount rates………...81
Table 45: Daily break even analysis for SaskMedical Diagnostics……………………………...82
Table 46: Sensitivity analysis of break even point up to 3% case……………………………….83
Table 47: Sensitivity analysis of break even point from 4% to 5% case………………………...84
Table 48: Projected ratios for SaskMedical Diagnostics from 2020 to 2030……………………86
Table 49: Projected gross profit margin and interest coverage for SaskMedical Diagnostics…..86
Table 50: Available pricing and MRI unit information from competitors…………………........88
Table 51: Technical specifications for MRI units………………………………………………..89

List of Figures
Figure 1: Organizational structure for SaskMedical Diagnostics…………………………………8
Figure 2: 5-year development plan for SaskMedical Diagnostics………………………………...9
Figure 3: Site plan for SaskMedical Diagnostics………………………………………………...11
Figure 4: Floor plan for SaskMedical diagnostics……………………………………………….12
Figure 5: Patient flow chart for SaskMedical Diagnostics………………………………………13
Figure 6: General daily work schedule for staff at SaskMedical Diagnostics…………………...16
Figure 7: Projected dividend payments as a percentage of operating cash flows………………..34
Figure 8: Number of MRI exams conducted annually in Saskatchewan………………………...36
Figure 9: Wait times for MRI services in Saskatchewan from 2008-2015………………………37
Figure 10: Number of MRI exams per 1000 people by province and territory………………….38
Figure 11: Expected number of MRI exams for SaskMedical Diagnostics and competitors……40
Figure 12: Number of Saskatchewan residents by total income group category for 2013………42
Figure 13: Median total income by family type for Saskatchewan in 2013……………………..43
Figure 14: Number of married and common-law families in Saskatchewan…………………….44
Figure 15: Number of Outpatient MRI exams in Ontario by anatomical site…………………...46
Figure 16: Projected Revenue for SaskMedical Diagnostics from 2020-2030…………………..47
Figure 17: Projected market price for MRI exams in Saskatchewan…………………………….48
Figure 18: Projected marketing costs for the first 10 years of operations……………………….50
Figure 19: SWOT/TOWS summary of strategy implications in marketing plan………………..51
Figure 20: Projected net income and cash flows for SaskMedical Diagnostics………………....52
Figure 21: Sensitivity analysis of cash flows for SaskMedical Diagnostics…………………….53
Figure 22: IRR at different service levels and market exam price discount rates……………….53
Figure 23: Projected breakeven points for SaskMedical Diagnostics from 2020 to 2030……….54
Figure 24: Sensitivity analysis of daily break even points at varying discount rates……………55
Figure 25: Projected debt, debt to equity, and cash flow to total debt ratios…………………….56
Figure 26: Projected gross profit margin for SaskMedical Diagnostics…………………………57
Figure 27: Projected interest coverage for SaskMedical Diagnostics…………………………...57
Figure 28: Risk factors for SaskMedical Diagnostics with mitigation strategies………………..58

List of Appendices
10. Appendix A—Pro Forma Financial Statements……………………………………....68-78
10.1 Pro Forma Income Statement……………………………………………………….69
10.2 Pro Forma Balance Statements………………………………………………….70-71
10.3 Pro Forma Retained Earnings………………………………………………………72
10.4 Predicted Economic Variables……………………………………………………...72
10.5 Pro forma Cost of Revenue…………………………………………………………72
10.6 Pro Forma Cash Flow Statement…………………………………………………...73
10.7 Pro Forma Revenues………………………………………………………………..74
10.8 Pro Forma Capital Budget…………………………………………………………..74
10.9 Financing Budget…………………………………………………………………...74
10.10 Pro Forma Operating Expenses…………………………………………………....75
10.11 Pro forma Total Salary and Wages………………………………………………..75
10.12 Pro forma Annual Salary and Wages for each Position…………………………...76
10.13 Pro Forma Employee and Physician Benefits……………………………………..76
10.14 Pro Forma Marketing Expenses…………………………………………………...76
10.15 Pro forma Debt Amortization……………………………………………………..77
10.16 CCA Schedule for SaskMedical Diagnostics……………………………………...77
10.17 Projected Tax Schedule with Tax Rates………………………………………….78
11. Appendix B—Sensitivity and Break-even Analysis…………………………………...79-84
11.1 Sensitivity Analysis of Projected Cash Flows…………………………………..80-81
11.2 Break Even Analysis…………………………………………………………….82-84
12.0 Appendix C—Ratio Analysis………………………………………………………….85-86
12.1 Solvency, Investment Utilization and Profitability Ratio Analysis………………...8
13.0 Appendix D—Competitor Information and Technical Specifications……………..87-89
13.1 Competitor Information…………………………………………………………….88
13.2 MRI Unit Technical Specifications…………………………………………………89

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1.0 Executive Summary
As of March 2016 private MRI services became legal in Saskatchewan. With demand for MRI
services exceeding 40,000 exams a year (Figure 8) and wait times in the province remaining
unchanged in the last 5 years (Figure 9), there is a significant demand for additional MRI
capacity in the province. There are currently only two private MRI clinics in Regina and none in
the rest of the province. This means that over 300,000 people in central and northern
Saskatchewan are forced to travel to Regina or out of province to seek private MRI services.
SaskMedical Diagnostics will open in 2020 and will become the first private MRI clinic in
Saskatoon, offering private MRI exams to patients as well as publicly funded exams for the
Saskatoon Health Region. The clinic will have waiting room capacity for up to 20 patients with
average times from when the patient enters the clinic to when they leave taking approximately 55
minutes (Figure 5). The clinic will be open 0800-1800, Monday to Friday. Operating expenses
such as preventative maintenance and laundry will be outsourced to contractors (Table 1).
Clinic staff will consist of 3 radiologists, 4 Medical Radiation Technologists (MRTs), a
secretary, secretarial assistant and custodian (Table 9). A 360° performance appraisal system will
be managed by the Clinic Director. Radiologists and MRTs will be required to complete
mandatory Continuing Medical Education (CME) training as a condition of maintaining their
license in the province.
Saskatchewan’s utilization rate for MRIs falls below the national average, indicating a lack of
available capacity (Figure 10). Patients who are most likely to be able to afford private MRI
exams have an annual income greater than $70,000 (Figure 12). Coupled families are within this
income range making them an ideal target market for private MRI services (Figure 13). With no
established private MRI clinics and a combined population of over 300,000 people, the cities of
Saskatoon, Lloydminster, North Battleford and Prince Albert are ideal geographical regions for
targeted marketing efforts (Table 20). The majority of the marketing budget will be allocated to
radio advertisements. Print brochures will also be distributed in hospitals and clinics throughout
the 4 targeted cities. The clinic website will be used by patients to schedule appointments and
access research.

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SaskMedical Diagnostics is projected to maintain a margin of safety over the break even point
for the first 10 years of operations (Figure 23). At the expected market exam discount rate and
service level, SaskMedical Diagnostics is also projected to generate an IRR of 19% (Figure 22).
SaskMedical Diagnostics will return 30% of operating cash flows to equity shareholders in the
form of dividends (Table 24). With net cash flows expected to be positive until 2029,
SaskMedical Diagnostics will have over $7.2 million to finance a major clinic upgrade in 2031
(Table 27).
With the creation of a private MRI industry in Saskatchewan, there is a need for additional MRI
capacity in the province. I recommend that this business plan be implemented according to the 5-
year development plan (Figure 2) and operated from 2020 to 2030. Continued operations past
2030 will be contingent on profitability and operational performance. If the clinic is unable to
finance an upgrade and clinic expansion in 2031, the business will no longer be profitable and
should be discontinued. Becoming a first mover in a nascent industry is a rare opportunity for
businesses that can be very profitable if successfully executed. Executing the business plan
according to the development plan timeline will be essential to realizing this first mover
advantage.

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2.0 Introduction
2.1 Proposed Business
SaskMedical Diagnostics will be a private medical clinic providing diagnostic imaging services
in Saskatoon. In March 2016, the MRI Facilities Licensing Act came into effect province wide.
Under this legislation, medical clinics in Saskatchewan are able to provide MRI exams to
patients in Saskatchewan who are willing to pay privately. Within 14 business days from the
time that a private MRI exam is performed, one publicly funded MRI exam must also be done
for a patient on the public waiting queue. This system ensures that Saskatchewan residents with
the ability to pay can access MRI treatment and patients who cannot afford to pay privately will
have their wait times reduced.
SaskMedical Diagnostics will have three practicing radiologists who will also be partners
owning class A shares in the organization. According to the College of Physicians and Surgeons
of Saskatchewan (CPSS), only members of the college can hold voting Class A shares (CPSS,
2016). As a result, voting shares will be restricted to the radiologists of the clinic. Non-voting
shares can be distributed to corporations and trusts. The majority of equity will have to be
sourced from institutional investors as it is unlikely that the clinic partners will be able to provide
the $3.25 million of equity financing required to fund the clinic construction and purchase of
capital assets (Table 30).
SaskMedical Diagnostics will be a professional services business specializing in diagnostic
imaging using sophisticated, state-of-the-art technology. This necessitates the use of cost of
revenues in the financial analysis since there is no manufacturing involved. Profit margins are
also very high compared to businesses in “old economy” industries. The use of high technology
also means that the clinic faces a high rate of technological obsolescence. The overall work
environment will be demanding with a strong emphasis placed on professional patient care. As
with other professions, radiologists will be expected to practice medicine in a way that is
consistent with the standards of their profession. MRTs operating the MRI theatre and preparing
the patients will also be expected to provide professional patient care within their scope of
practice. The clinic will also be a great learning environment for all involved, with MRTs having
ample opportunities to learn from the radiologists. Radiologists will have many opportunities to

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network and learn from other specialists in Saskatchewan during Continuing Medical Education
(CME) accreditation.
2.2 Positioning Statement
To position SaskMedical Diagnostics as a professional, core-service clinic for MR diagnostic
services in Saskatchewan, our positioning statement will be:
To become the centre of excellence for MR imaging services in central and northern
Saskatchewan through providing public services to the Saskatoon Health Region and private
services to Saskatchewan residents.
2.3 Goals and Objectives
Short and long term goals for SaskMedical Diagnostics will help the clinic realize its positioning
statement and continue revising its vision for the future. In order of time horizon and impact,
these goals are:
1. To successfully fund the construction of the clinic and purchase of necessary capital
assets to begin operations by 2020 while staying within the fiscal constraints of the $4.5
million financing budget. (4-5 years)
2. To become a primary business partner with the Saskatoon Health Region by 2020 in
providing public MRI services and added MRI capacity to Saskatoon and Saskatchewan.
(4-5 years)
3. To achieve an annual service level of 5500 exams for each of the 10 years of operation
from 2020 to 2030. (10-15 years)
4. To maintain positive operating cash flows for each of the 10 years of operation from
2020 to 2030. (10-15 years)
5. To become the best private MRI clinic in Saskatchewan both in terms of efficiency and
professional patient care. (10-15 years)
6. To fund an expansion of the clinic and service offering as well as a major upgrade of the
MRI theatre in 2031. (15-20 years)
7. To expand and open clinics outside of Saskatchewan with the aim to have a SaskMedical
Diagnostics in every major Canadian city. (30-50 years)

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8. To become internationally recognized for research and clinical best practices, both in
terms of clinical procedures and in the early adoption of technology yet to be invented.
(>50 years)

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3.0 Industry Overview
The private MRI industry in Saskatchewan is currently in its infancy with only two medical
clinics in Regina offering private MRI services (Table 50). Following its passing in the
legislature and public consultation, Bill 179 The MRI Facilities Licensing Act became
enforceable in the province allowing private MRI services as of March, 2016. With privatization
in other provinces such as Alberta and Ontario leading to a significant increase in MRI capacity,
it is likely that Saskatchewan will see a substantial increase in MRI facilities in the next 10 years.
Currently, there are only 10 MRI units in Saskatchewan with 8 of them being publicly owned.
Due to underinvestment, wait times in Saskatchewan have remained relatively unchanged in the
last 5 years (Figure 9). Utilization of MRI services in Saskatchewan also remain at 39 exams per
1000 people remaining well below the national average of 49 exams per 1000 people (Figure
10). Saskatchewan patients on low-priority wait lists routinely face unacceptably long wait times
for standard MRI exams. Faced with wait times that would be unthinkable in most developed
countries, these patients are forced to seek MRI services outside of Saskatchewan. Many of these
residents pay for treatment at a clinic in Alberta, or at the Mayo Clinic in the United States.
The shortcomings of the public healthcare system in Saskatchewan have created a political
environment that is now more receptive to privatization. As with any nascent industry, this
provides a unique advantage to clinics that are first to move into the market. This environment
also creates a considerable level of uncertainty and risk as there is no Saskatchewan-specific
market history. Being a western Canadian province with similar demographics and having a well
developed private MRI industry, Alberta provides the closest comparison to Saskatchewan’s
private MRI industry in 10-20 years.
With more clinics expected to open up operations in Saskatchewan it will be critical to the
success of SaskMedical Diagnostics to begin operations in 2020 and become the first private
MRI clinic established in Saskatoon. With the only private clinics being located in Regina, there
is already interest from residents for similar clinics in Saskatoon. As one patient said, “If a
Saskatoon resident pays for an MRI, a Regina patient on the public list will get a scan simply
because the licensed facilities are in this city” (Cowan, 2016). By opening clinics in Saskatoon,
the benefits of shorter wait times can be expanded to residents living outside of Regina.

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4.0 Operations
4.1 Organizational Structure
SaskMedical Diagnostics will be incorporated in Saskatchewan as a professional corporation
(P.C.). This form of organizational structure is beneficial for SaskMedical Diagnostics for the
following reasons: tax minimization, collective liability and capital asset pooling. Tax
minimization would be achieved mainly through the use of a clinic billing number by all
radiologists at the clinic. Billing all of the services to a single number will result in less tax
compared to having each radiologist bill to their own separate number. Collective liability would
result in all members of the clinic becoming equally liable for charges of malpractice at the
clinic. In this context, the members of the clinic would be all radiologists owning voting class
shares. Collective liability would hold practicing members accountable to upholding patient care
and would also equally allocate the costs of fines or litigation amongst the members. For PCs
registered with the College of Physicians and Surgeons of Saskatchewan (CPSS), this is also a
legal requirement (CPSS, 2016). Pooling capital assets will also improve the equity and stability
of the clinic instead of having each radiologist responsible for their own capital assets. As a PC,
the capital assets would also be under the ownership of SaskMedical Diagnostics, removing
liability from the radiologists in the event of reacquisition during a bankruptcy.
The legal requirements for a PC are outlined in both The Business Corporations Act and The
Professional Corporations Act. Legal requirements for the naming of a corporation registered by
CPSS include having the word “professional corporation” or P.C. included in the title name of
the organization. The name of the corporation must also clearly indicate that the corporation
engages in the practice of medicine (CPSS, 2016). Both of these requirements are met in the
name “SaskMedical Diagnostics (P.C.).” For the purposes of distributing voting-class shares,
only members of the corporation are required to be shareholders. Members of the corporation are
restricted to practicing radiologists registered by CPSS and holding a full, special, or provisional
license to practice medicine in Saskatchewan (CPSS, 2016). For non-voting shares, ownership is
expanded to a member of CPSS, or the member’s spouse, children, parents or a corporation or
trust that meet the requirements of The Professional Corporations Act (CPSS, 2016).
For the board of directors in a private corporation, at a minimum there must be at least one
shareholder with the officer positions of President and Secretary filled (Corporation centre.ca). It

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is also common practice for private corporations to initially issue 1000 shares to members. In
addition to the requirements of being a member in a PC, Saskatchewan corporations also require
the majority of directors to be Canadian, with at least one director a Saskatchewan resident. An
external auditor will also be contracted by the corporation to file the financial statements
(Corporation centre.ca).
Figure 1: Organizational structure for SaskMedical Diagnostics.
SaskMedical will have three members as both shareholders and members of the board of
directors. The members will be fully licenced radiologists with one radiologist taking the role of
CEO as Clinic Director, and the officer position of President. The positions of Vice-President
and Secretary will be assigned to the other two radiologists. The voting class shares of the
corporation will be issued to the members with 52% going to the CEO, and 24% going to each of
the other two members. This share ownership structure is designed to give the CEO veto rights
and to ensure that the CEO maintains control of decision making within the clinic. The
employees of the clinic will consist of a secretary, secretarial assistant, a custodian and four

9
MRTs. An external auditor will be responsible for auditing and filing the financial statements.
The secretary will be mainly responsible for scheduling patients at the front desk and
appointments for the clinic members as well as preparing financial information for the external
auditor. A secretarial assistant will assist the secretary with daily tasks. The custodian will be
hired on a part-time basis for general maintenance and cleaning of the facility. The MRTs will be
responsible for the main operations of the clinic including the triaging of patients, operation of
the MRI unit, preparation of the patients and MRI unit for exams, and other routine tasks within
the clinic.
4.2 Development Plan
The development of the clinic will take place over the course of 5 years, with the first year of
operations beginning in 2020 (Figure 2).
Figure 2: 5-year development plan for SaskMedical Diagnostics.
The financing phase of the clinic would begin first to ensure that sufficient capital is available for
the construction of the clinic. This financing period would take place from 2016 to 2018 and
would begin with the recruitment of partners for the corporation. After partners have been
selected for the clinic, SaskMedical Diagnostics would begin the process for incorporation

10
followed by the issue of shares to the members. Debt and equity would be acquired according to
the capital cost structure of the clinic.
After sufficient financing is achieved, clinic property would be purchased and the construction of
the clinic and hiring of employees would begin. This would also be expected to take place over
the course of two years, with construction of the clinic and hiring of staff to be completed by
2020. The hiring and selection process for MRTs would occur using the available applicant pool
from the Saskatchewan Association of Medical Radiation Technologists (SAMRT). A secretary
with the appropriate credentials would be hired from a larger applicant pool with preference
given to applicants living in Saskatchewan. A custodian would be hired from within the
province. The construction of the clinic would take place on 325 Fairmont Drive after this
property is purchased by SaskMedical Diagnostics. A construction firm would be selected in an
open-bid process for the construction of the clinic. Once a construction plan is developed by the
project manager, the MRI unit with peripheral equipment would be ordered to have delivery and
partial installation coincide with construction of the MRI theatre. This is to prevent additional
construction costs from the reopening of the MRI theatre during installation of the MRI unit. As
the MRI unit would not fit through the entrance to the MRI theatre, the delivery and partial
installation of the MRI unit would have to coincide with the ongoing construction of the clinic.
Once the MRI unit is installed and the clinic is approaching completion, the appropriate
shielding of the MRI theatre and installation of peripheral equipment can occur. After
construction is complete, full certification by the Saskatoon Health Region and provincial
government would be required for the clinic to begin operating.
After certification, full clinic operations would begin ideally by 2020. This development plan
does not take into account any delays in construction, hiring, or the certification process. Delays
in any of these stages would postpone operations beyond 2020. If the development plan is on
schedule, the first fiscal year would be completed by 2021.

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4.3 Site Plan
Figure 3: Site plan for SaskMedical Diagnostics
The clinic will be located on a 1821m2 lot at 325 Fairmont Drive, S7M 5G7 (Figure 3). In
addition to the building, there will also be 20 parking spaces adjacent to the clinic. The clinic site
will be zoned in M2 in accordance with Saskatoon bylaws (City of Saskatoon, 2016).
Development standards for M2-zoned buildings require a maximum site coverage of 40%,
minimum site area of 450m2 and a minimum requirement for one parking space per 30m2 of
gross floor area with parking spaces located within 3m of any building entrance (City of
Saskatoon, 2016). The clinic will have 20 parking spaces, surpassing the minimum requirement
for 17 (500/30) and placing the parking within 3m of either fire exit 1 or the front entrance. The
site coverage for the clinic will also be 27%, putting the clinic within the 40% site coverage
maximum. The 500m2 site area will also meet the requirement for 450m2 minimum
development.

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4.4 Floor Plan
)
Figure 4: Floor plan for SaskMedical diagnostics.
The clinic will be fully accessible to patients, with a wheelchair ramp available in the front
entrance. All washrooms will also be able to accommodate people with disabilities. There will be
two eye rinse stations installed in the clinic, one along the corridor adjacent to the treatment
rooms, and the second station installed along the corridor leading to the MRI theatre. A fire
sprinkler system will also be installed in the clinic. The waiting area will have a maximum
occupant load of 10 people (Figure 4).
4.5 Work Process Plan
From the time that a patient enters a clinic to the time the patient leaves will on average take 55
minutes (Figure 5). After entering the clinic, the patient will register at the front desk and then sit
in the waiting area to be received by an MRT. This will take approximately 5 minutes. After
being received by an MRT, the patient will then enter one of the three treatment rooms where the
MRT will take a set of vital signs from the patient and then hand care of the patient over to a

13
radiologist. The radiologist will then prepare the patient for the exam to include answering any
questions the patient may have and reviewing the patient’s medical history. During this time the
MRT will prepare the MRI unit for the exam by installing the appropriate coils depending on the
exam ordered. The MRT will then bring the MRI trolley into the treatment room and provide the
patient with a gown. The patient will then change and lie on the trolley in preparation for being
taken into the MRI theatre by the MRT. This step will take approximately 15 minutes. Once the
patient and the MRI unit is ready for the exam, the MRT will wheel the trolley with the patient
into the MRI theatre and begin the exam. An average MRI exam takes approximately 30 minutes
(Advanced Imaging, 2016). After the exam is complete, the patient will be taken by the MRT
back into the treatment room while the radiologist reviews the results of the exam. The patient
will change out of the gown and if there are no complications, the patient will be released from
the clinic. This step will take approximately 5 minutes.
Figure 5: Patient flow chart for SaskMedical Diagnostics.

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4.6 Quality Control Program
The clinic quality control program will be centrally regulated by the Diagnostic Imaging Quality
Assurance Program (DIQAP) in partnership with the Advisory Committee on Medical Imaging
(ACMI). Legislation governing the certification requirements of the facility unique to medical
imaging are outlined in regulatory bylaw 25.1 from the CPSS (CPSS, 2015). The quality control
program will be developed by the Clinic Director and must conform to this bylaw in addition to
requirements made by The Radiation Health and Safety Act 1985, The Radiation Health and
Safety Regulations, 2005, and The Health Information Protection Act. To ensure the safety of
patients, at a minimum the Clinic Director must be on-site at the clinic for 25% of the studies
performed in a given month (CPSS, 2015). Additionally, the Clinic Director must also ensure
that an accredited radiologist is on-site for a minimum of 80% of the studies performed at the
clinic each day (CPSS, 2015). The MRI unit must receive the required number of preventative
maintenance exams in accordance with The Radiation Health and Safety Regulations, 2005
(Government of Saskatchewan, 2005).
Electronic record keeping of physician and employee hours and tasks will be kept to ensure that
radiologists and the Clinic Director are present for studies that are performed at the clinic using
Enterprise Application Software (EAS). All employees will have clinic Blackberry©
devices with
access to the clinic EAS. MRTs, radiologists, the secretary and the secretarial assistant will use
their Blackberry©
devices to check on appointments and scheduled tasks for the day. For MRTs,
once a scheduled task has been completed such as scheduled cleaning of the MRI theatre, or the
removal of soiled laundry from the clinic, the task will be checked off as completed using their
Blackberry©
. This information will then be updated on the EAS network. The schedule will be
updated continuously, assigning different tasks to different MRTs to ensure equal distribution of
responsibilities. For the radiologists, this system will be used for the scheduling of patient
appointments, as well as meetings specific to their positions on the board of directors. The
secretary will be able to update the EAS network and schedule appointments directly for the
radiologists and Clinic Director. EAS-enabled computers will also be present in all treatment
rooms and offices allowing the patient history to be brought up while an MRT or radiologist is
assessing the patient. This system will also be compatible with the electronic record keeping

15
systems used by the Saskatoon Health Region. This will allow patient referrals to be
electronically imported and exported to and from the clinic’s EAS network.
To ensure that clinic guidelines are maintained, an extensive manual detailing subject operating
procedures (SOPs) will be made available to all radiologists and employees in both electronic
and physical copies, with physical copies available in every treatment room, office, and at the
front desk. All radiologists and employees will be expected to be familiar with the SOP manual.
This manual will be written in accordance with the DIQAP. The manual will detail all clinical
procedures and workflow guidelines for receiving the patient, as well as during and after MRI
exams. The manual will also detail emergency SOPs for emergencies such as a building fire, or a
patient’s adverse reaction to a contrast media. Implementation of the quality control program will
be documented electronically on the EAS network and will be filed to ACMI for auditing
purposes.
4.7 Average Work Schedule
On average, the clinic will be open 50 hours a week, Monday to Friday, 0800-1800. On an
average work day, the clinic will require all radiologists and employees to be present at the clinic
NLT than 0730 Monday to Friday, with the clinic to be open for receiving patients by 0800.
From 0800-1800, patients will be received by the clinic for their scheduled exams following the
work process previously described (Figure 5). An hour lunch break will be made available to all
employees and radiologists each workday, with staggered lunch breaks to ensure that the MRI
unit is in continuous use. In addition to the lunch break, employees and radiologists will also
have a 30 minute scheduled coffee break each day which will be accommodated into the
schedule. Employees and radiologists will also be permitted to use the staff room when there is a
natural break between scheduled tasks (Figure 6).

16
Figure 6: General daily work schedule for staff at SaskMedical Diagnostics.
Over the course of the workweek, there will be scheduled deep cleaning of the entire clinic. The
procedures and checklist for deep cleaning will be outlined in the SOP manual. For treatment
rooms and the MRI theatre, deep cleaning will involve removal of items from the storage
cabinets and disinfection. The waiting area will also be disinfected weekly, with chairs made of a
material that will allow regular cleaning by disinfectant sprays and wipes.
On a monthly basis, performance evaluations will be carried out by the Clinic Director for all
staff. The EAS network will be used in evaluating employees and radiologists since it will be
impossible for the Clinic Director to directly supervise staff. Quantitative data from the EAS
network such as time for each patient appointment, time required to complete scheduled tasks,
and number of exams completed in a day will be used to evaluate efficiency. Empirical data from
patient feedback forms will be used to ensure that professionalism is maintained.
On an annual basis, corporate annual renewal will be required to be submitted by the Clinic
Director to CPSS no later than November 1 of each year. The annual renewal will be done online

17
through the Clinic Director’s portal (CPSS, 2016). In addition to annual renewal, the external
auditor will be required to submit all corporate financial documents by the fiscal year end of
December 31 each year. External auditing will be outsourced to KPMG Saskatoon. Corporate
income tax will also be filed by KPMG annually. On an annual basis, all radiologists and MRTs
will be required to complete CME accreditation to maintain or upgrade their licence. 21 days will
be allocated for CME and executive training for the radiologists, and 7 days will be allocated for
the MRTs. The secretary and secretarial assistant will be allocated training days depending on
the time available and relevance of the opportunities to the clinic operations.

18
4.8 Suppliers and Service Providers
Table 1: Summary of suppliers and service providers.
Supplier Service offered Contract Cost/year
K-Bro Linen Services
(AssistedLivingStore.com,
2015)
Providing clean linen
cart with soiled linen
collection tub.
Collect soiled linens
and replenish clean
linen cart.
10-year service
contract
$15,000
GE Healthcare
(Pers. Comm. with Block
Imaging Rep.)
Total service contract
for preventative
maintenance of MRI.
10-year service
contract
$85,000-
$100,000
SaskPower
SaskWater
SaskEnergy
(International Facility
Management Association,
2010)
Electricity
Sewer/water
Natural gas heating
Subscription $27,427
SaskTel
(Sasktel, 2016)
Internet
(VoIP) phone network
TV
IP trunking
Subscription
$2279.40
Blackberry
(Blackberry, 2016)
BES12 EMM server
licensing
Perpetual license $1,074
KPMG (pers. Comm. with
KPMG Rep.)
Corporate auditing
Auditing and filing
corporate financial
statements
$7,000
Vanguard Canada
(Vanguard, 2016)
Defined contribution
registered retirement
plan (DC RRP)
Fund holder for
Target Retirement
Fund (TRF)
$100,000

19
4.9 Capital Expenditures
Item Cost Source
Land $595,000
Pers. Comm. with Todd Butler, ICR
Realtor
Clinic
$2,000,000
Altus Canadian Cost Guide 2016
(Altus Group, 2016)
Commercial parking
Building construction
Land development
MRI unit
$1,450,000
Pers. Comm. with Daniel Surette,
GE Healthcare Canada Product
Sales Manager
GE Optima MR450W with GEM
suite (1.5T)
Data Module
Computer Equipment
2X Patient Trolleys
Additional Equipment
$2,000
Pers. Comm. with Deb Gross,
Sasktel Sales. Rep.
10X Cisco IP Phone 8861 system
4X Cisco IP Phone 8800 key
expansion module
2X VIZIO 80” 4K Ultra HD 240Hz
LED Smart TV
$11,060
Bestbuy.ca
2X TygerClaw 42”-82” Full Motion
TV Wall Mount
$300
9X HP Pavilion Mini PC $3,960
9X HP Pavilion 20” IPS LED
Monitor
$1,080
HP Wireless classic optical
keyboard and mouse combo
$315
Lexmark Wireless Colour All-in-
one Laser Printer
$2,859
Total Additional Equipment $21,573
Table 2: Summary of capital expenditures for land, clinic, MRI unit, and additional equipment.

20
Item Cost Source
Furniture
$25000
Pers. Comm. with StatMedical
Sales Rep. (StatMedical, 2016)
5X Onward series 3-seater lounge
chair
2X Onward series rectangular table
3X Onward series guest chair
6X Onward series patient chair
3X square connecting spacertable
5X Fairbanks Executive Bowfront
Desk with Storage Wall
$58721
National Business Furniture
(National Business Furniture, 2016)
5X Apex High Grade Leather Mid-
Back Chair
3X 5240-145 Examination Table
Boat Shape Conference Table
Esquire Double Glass Top
Reception Desk
Mobile Utility Table with Data Port
5X Set of four mesh chairs
4X Overhead Cabinet
$20000
Pers. Comm. with CanMed
Healthcare Sales Rep. (Can-med
Healthcare, 2016).
4X Base Cabinet
4X Desk mount
4X Woodgrain panels
4X Solid surface countertop
4X undermounted single bowl sink
3X high overhead cabinets 2 door
15X high overhead storage units
Table 3: Summary of capital expenditures for furniture.
Table 4: Summary of capital expenditures for furniture continued.
Item Cost Source
Furniture (cont.)
$349
Ikea Website (Ikea, 2016).
Komsjo Double Bowl Sink
Nutid French Door Refridgerator $1899
Lagan Microwave oven $199
2X Karlby Walnut countertop $460
Sektion base cabinet $264
3X Secktion wall cabinet frame $117
2X Section base cabinet with
shelves
$246
2X Godmorgon/Odensvik sink
cabinet with 4 drawers
$1198
2X Godmorgon/Odensvik sink
cabinet with 2 drawers
$698
6X Tofino dual flush complete one
piece
$1794
Homedepot
(Homedepot.ca, 2016).
2X Bradley Toilet partition $2720
Sustainablesupply
(Sustainablesupply.com, 2016).
Total Furniture $113665

21
4.10 Capital Budget
Item Cost
Land $595,000
Clinic $2,000,000
MRI Unit $1,450,000
Additional Equipment $21,573
Furniture $113,665
Net Working Capital $550,000
Total Capital $4,730,238
Table 5: Capital budget summary.
4.11 Operating Expenses (2020-2025)
Operating Expenses 2020 2021 2022 2023 2024 2025
Sewage 1,424 1,452 1,482 1,511 1,541 1,572
Electricity 17,311 17,657 18,010 18,371 18,738 19,113
Natural Gas 7,119 7,261 7,407 7,555 7,706 7,860
Water 1,574 1,605 1,638 1,670 1,704 1,738
Linen Services 15,000 15,300 15,606 15,918 16,236 16,561
EAS Software 1,074 1,095 1,117 1,140 1,163 1,186
Internet and
Telephone
1,979 2,039 2,100 2,163 2,228 2,295
TV Service 300 309 318 328 338 348
Insurance (Property
and Capital Assets)
10,000 10,200 10,404 10,612 10,824 11,041
Insurance (CMPA) 28,740 29,315 29,901 30,499 31,109 31,731
Preventative
Maintenance
100,000 102,000 104,040 106,121 108,243 110,408
Auditing 7,000 7,140 7,283 7,428 7,577 7,729
Marketing 87,000 39,540 40,331 41,137 41,960 42,799
Salary and Wages 1,500,120 1,530,122 1,560,725 1,591,939 1,623,778 1,656,254
Employee/Physician
Benefits
234,784 238,865 243,028 247,275 251,606 256,009
Federal Tax 243,753 247,870 240,301 228,584 213,027 193,950
Provincial Tax 169,003 172,296 166,241 156,867 144,422 129,160
Property Tax 296,552 301,167 294,471 283,768 269,358 251,550
CCA 254,873 215,459 183,465 157,426 136,169 118,754
Dividends 411,176 403,978 385,338 363,630 338,863 311,129
Debt Interest
Expense
91,410 86,593 81,391 75,773 69,705 63,152
Total Operating
Expenses
3,480,192 3,431,267 3,394,596 3,349,716 3,296,296 3,234,338
Table 6: Summary of operating expenses from 2020-2025.

22
4.12 Operating Expenses (2026-2030)
Operating Expenses 2026 2027 2028 2029 2030
Sewage 1,604 1,636 1,668 1,702 1,736
Electricity 19,495 19,885 20,283 20,688 21,102
Natural Gas 8,017 8,177 8,341 8,508 8,678
Water 1,773 1,808 1,844 1,881 1,919
Linen Services 16,892 17,230 17,575 17,926 18,285
EAS Software 1,209 1,234 1,258 1,284 1,309
Internet and
Telephone
2,364 2,435 2,508 2,583 2,661
TV Service 358 369 380 392 403
Insurance (Property
and Capital Assets)
11,262 11,487 11,717 11,951 12,190
Insurance (CMPA) 32,366 33,013 33,673 34,347 35,034
Preventative
Maintenance
112,616 114,869 117,166 119,509 121,899
Auditing 7,883 8,041 8,202 8,366 8,533
Marketing 43,757 44,946 46,489 48,529 51,240
Salary and Wages 1,689,379 1,723,166 1,757,630 1,792,782 1,828,638
Employee/Physician
Benefits
260,461 265,002 269,633 274,358 317,937
Federal Tax 171,672 140,579 101,781 56,667 -
Provincial Tax 111,338 86,463 55,425 19,333 4,034
Property Tax 230,654 201,230 164,353 121,372 67,459
CCA 104,430 92,593 82,761 74,549 67,645
Dividends 280,574 240,454 191,922 136,486 59,359
Debt Interest
Expense
56,074 48,430 40,175 31,259 26,617
Total Operating
Expenses
3,164,178 3,063,047 2,934,784 2,784,472 2,656,679
Table 7: Summary of operating expenses from 2026-2030.
Costing for utilities (sewage, electricity, natural gas, and water) was derived using a utilities
index from a research report published by the International Facility Management Association
(IFMA, 2010). Specific utility costs were provided in dollars/square foot for medical clinics. The
unit costs were multiplied by the total square feet of the medical clinic and increased 36% to
account for inflation since 2010 at a rate of 3% as well as price differentials between the United
States and Canada. The 3% inflation rate was also applied annually to utility expenses from
2020-2030.

23
4.13 Cost of Revenue
Cost of
Revenue
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Contrast Dye 36 36.72 37.45 38.20 38.97 39.75 40.54 41.35 42.18 43.02 43.88
Other
Consumables
3 3.06 3.12 3.18 3.25 3.31 3.38 3.45 3.51 3.59 3.66
Linens 0.14 0.14 0.15 0.15 0.15 0.15 0.16 0.16 0.16 0.17 0.17
Total Cost of
Revenue/Exam
39.14 39.92 40.72 41.54 42.37 43.21 44.08 44.96 45.86 46.78 47.71
Number of
Exams
5500 5500 5500 5500 5500 5500 5500 5500 5500 5500 5500
Total Cost of
Revenue
$215,270 $219,575 $223,967 $228,446 $233,015 $237,675 $242,429 $247,278 $252,223 $257,268 $262,413
Table 8: Summary of cost of revenues for SaskMedical Diagnostics.
Contrast dye makes up the majority of costs associated with MRI exams. In most abdominal
exams, contrast dye is often required (pers. Comm. with CAMIS). To reflect this, contrast dye on
a per exam basis was estimated to average $36/exam over a year of operations assuming a
service level of 5500 exams/year is achieved. This results in the contrast dye creating over 90%
of the unit cost of revenue. Other consumables consist mainly of pads and IV lines used during
the procedure as well as their disposal in biohazard bins. This cost was estimated to be $3/exam
for 2020. Linen costs are accounted for as an operating expense in the linen service contract with
K-Bro Linen Services (Table 31). Assuming an economy patient gown weighs 0.33 lb/gown and
the average cost of processing per lb is $0.48/lb based on estimates ranging from $0.35-$0.51/lb
(The Laundry Forum, 2009), then the average cost/linen is estimated to be $0.14. These costs
were increased at a rate of 2% a year from 2020 to 2030.

24
5.0 Human Resources
5.1 Job Descriptions and Qualifications
Position
Academic
credentials/Board
requirements
Position on Board
of Directors
License
Requirements
Job
Responsibilities
Clinic Director,
Radiologist
 MBA
 MD
 Canadian citizen
 Saskatchewan
resident
President
Full-time CPSS
license
 Maintain
patient register
 Patient
consultation
 Exam
interpretation
 Board duties
Radiologist
 MD
Vice-President
Full-time CPSS
license
 Maintain
patient register
 Patient
consultation
 Exam
interpretation
 Board duties
Radiologist
 MD
Secretary
Full-time CPSS
license
 Maintain
Patient register
 Patient
consultation
 Exam
interpretation
 Board duties
MRTs (4)
 Graduate of CMA-
accredited program
 Passed CAMRT
exam
 MRI experience
N/A
Full-time SAMRT
license
 Prepare patient
for exam
 Prepare
equipment for
scan
 Operate MRI
theatre
 Routine tasks
Secretary
 P. Admin.
Certificate/Business
Admin. Diploma
N/A N/A
 Schedule
appointments
 Preparing
financial
information for
audit
 Secretarial
duties
Secretarial
Assistant
 Business Admin.
Certificate
N/A N/A
 Assist secretary
with duties
Custodian
 Grade 12
 Relevant work
experience
N/A N/A
 Routine
maintenance and
cleaning
Table 9: Job Descriptions and required qualifications for staff at SaskMedical Diagnostics.

25
The Clinic Director will be the CEO for SaskMedical Diagnostics and for the purposes of the
business plan will be the author of this document. The Clinic Director will also have a license to
practice radiology in Saskatchewan. The Clinic Director will fulfill the role of President within
the organizational structure of the clinic (Figure 1) and will also be responsible for maintaining a
patient register. The Clinic Director will have an MBA from a university in addition to
accreditation as a radiologist. Accreditation as a radiologist will be confirmed by having a full-
time license to practice radiology in Saskatchewan from the CPSS. There will be two additional
partners in the clinic who will also be practicing radiologists with a full-time license. The
mandatory roles of Vice-President and Secretary will be filled by the other radiologists. All
clinic partners will be required to sign a legally binding partnership agreement stipulating the
roles and responsibilities of board positions as well as clinic ownership with other stakeholders.
Additionally, all radiologists will perform duties required of their specialty. This will consist
mainly of interpreting the results of MRI studies and providing relevant medical consultation and
referrals to patients.
Four MRTs will be employed by SaskMedical Diagnostics. These technologists will be required
to be graduates from a Canadian Medical Association (CMA) accredited diagnostic imaging
program at a college or university. They also must successfully pass the CAMRT licensing
exam. MRI-relevant work experience will be a consideration during the selection process
although new graduates will be able to receive training on the job. To practice in Saskatchewan,
MRTs must also obtain a full-time license from the SAMRT. MRTs will be required to operate
in the MRI theatre to include preparing the patient for the exam, preparing the equipment and
performing routine inspection and cleaning of the MRI theatre and examination rooms.
The secretary will be required to have a professional administration certificate or business
administration diploma from a college or university. The secretary will be responsible for
scheduling patients for appointments and signing patients into the EAS system. The secretary
will also be involved in compiling the financial statements for the auditor and performing other
secretarial duties related to the daily operation of the clinic. To assist the secretary with more
routine duties, a secretarial assistant will also be employed. The assistant will be responsible for
assisting with secretarial tasks as well as learning the responsibilities of the secretary in the event
that the assistant is required to perform those tasks temporarily.

26
The custodian will be responsible for routine cleaning of the facility as well as minor
maintenance and repair. The custodian will require grade 12 education. Relevant work
experience in healthcare services will be considered during selection.
5.2 Work Schedule for Medical Director/Radiologist
Time Period Tasks
Daily
 Interpreting MRI exams
 Receiving/counselling
patients
 Publishing research
Weekly
 Assess financial and
operating performance
 Weekly performance
appraisal/employee
assessment
 Weekly employee
meeting
Monthly
 Monthly performance
appraisal/employee
assessment
 Monthly financial
analysis, assess operating
goals
Annually
 Annual shareholders
meeting
 Filing of financial
statements to external
auditor
 Submission of corporate
renewal statements
 Annual employee
reviews
Table 10: Planned work schedule for the Medical Director of SaskMedical Diagnostics.
The Medical Director of the clinic will have to balance work responsibilities between the
research and clinical tasks required by radiologists as well as the administrative tasks required to
manage clinic operations. For monthly and annual tasks such as employee assessments and
reviews, time will be allotted for the Clinic Director to perform these tasks while the other two
radiologists take over the added patient load. The Clinic Director will also be required to submit
annual corporate renewal statements to the province on behalf of the clinic. By having three

27
radiologists practicing in the clinic, the administrative tasks of the Clinic Director should not
compromise the ability of the clinic to accept patients. For monthly financial analysis, this
activity will be made more expedient by coordinating with the secretary who will be organizing
the financial statements.
5.3 Work Schedule for Radiologists
Time Period Tasks
Daily
 Interpreting MRI exams
 Receiving/counselling
patients
 Publishing research
Weekly
 Weekly employee
meeting
Monthly
appraisal
Annually
 Annual shareholders
meeting
 Filing of financial
statements to external
auditor
 Annual employee
reviews
Table 11: Planned work schedule for radiologists.
Due to having less of an administrative role than the Medical Director, the other radiologists will
be able to devote more time to clinical practice and research. All members of the clinic will be
expected to attend weekly employee meetings to address issues that the clinic may face and to
establish goals and celebrate accomplishments. Both partners and employees in the clinic will be
active participants in the performance appraisal and employee review process. The 360°
performance appraisal process will ensure that all members are given the opportunity to
contribute equally in evaluations. As partners in the clinic, the two radiologists will be required
to hold the position of Vice-President and Secretary on the board of directors. As a result, they
will be actively involved during the filing of financial statements and at the annual shareholders
meeting.

28
5.4 Work schedule for MRTs
Time Period Tasks
Daily
 Preparing equipment for
exam
 Receiving/preparing
patients for exam
 Brief radiologist on
patient assessment
 SOP cleaning/inventory
assessment
Weekly
 Weekly employee
meeting
assessment
Monthly
appraisal
assessment
Annually
 Annual employee
reviews
Table 12: Planned work schedule for MRTs.
MRTs will play an important role in the daily operations of the clinic. MRTs will be responsible
for preparing the MRI theatre for exams. MRTs will also be the primary contact point with the
patient, receiving patients in the waiting area and preparing them for the exam in the treatment
rooms (Figure 4). Activities that MRTs will be expected to perform include taking vital signs of
the patient, conducting a brief patient history report for the radiologists and informing the patient
on the type of exam to be done and what to expect. MRTs will provide patients with a patient
gown and while the patient is dressing they will prepare the MRI theatre connecting the
appropriate coils depending on the type of study required. After the patient is brought into the
MRI theatre by the MRTs on a trolley and they are finished the exam, MRTs will brief the
radiologist on the exam before the radiologist meets with the patient to provide consultation and
interpretation of the exam results. These activities will take the majority of time in daily tasks. In
addition to MRI exams, there will be scheduled timings on a daily, weekly and monthly basis to
clean the MRI theatre and perform routine inventory assessment according to SOPs. This will
ensure that the clinic is always ready to accept patients and never short on supplies.

29
5.5 Work Schedule for Secretary and the Secretarial Assistant
Table 13: Planned work schedule for secretary and secretarial assistant.
The secretary will be responsible for taking daily communication and transferring to the
appropriate members of the clinic. The scheduling of clinic appointments will also be done by
the secretary for patients who book individually or are booked by their family doctor. To assist
the Medical Director, financial statements will be compiled monthly for the Medical Director to
review and annual statements will be prepared for the Medical Director to file to the external
auditor. The secretarial assistant will help the secretary with more routine tasks such as
appointment scheduling. Overtime as the secretarial assistant learns the duties of the secretary,
the assistant will be expected to temporarily take over duties if the secretary is ill or temporarily
out of the office. The tasks performed by the secretarial assistant will be dependent on the work
load placed on the secretary and the duties that the secretarial assistant is proficient in
completing.
Time Period Tasks
Daily
 Scheduling clinic
appointments
 Receiving and
transferring
communication to clinic
partners
Weekly
 Weekly employee
meeting
Monthly
appraisal
 Compiling of financial
statements for Medical
Director
Annually
 Annual employee
reviews
 Compiling of financial
statements for Medical
Director

30
5.6 Work Schedule for Custodian
Table 14: Planned work schedule for custodian.
The custodian will be responsible for the routine cleaning and maintenance of the clinic. Because
the custodian will be cleaning primarily from 1800-2200 (Figure 6), he/she will be unable to
attend weekly staff meetings. As a result, any relevant issues such as minor repairs that are
required will be discussed on a case by case basis with the Medical Director. The custodian will
receive monthly and annual performance appraisals and reviews.
Time Period Tasks
Daily  Routine cleaning
Weekly  Routine cleaning
Monthly
appraisal
Annually
 Annual employee
reviews

31
5.7 Compensation and Benefits
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Salary/Wage
Radiologist 300,000 306,000 312,120 318,362 324,730 331,224 337,849 344,606 351,498 358,528 365,698
MRT 35/hour 36/hour 36/hour 37/hour 38/hour 39/hour 39/hour 40/hour 41/hour 42/hour 43/hour
Secretary 75,000 76,500 78,030 79,591 81,182 82,806 84,462 86,151 87,874 89,632 91,425
Secretarial
Assistant
50,000 51,000 52,020 53,060 54,122 55,204 56,308 57,434 58,583 59,755 60,950
Custodian 11/hour 11/hour 11/hour 12/hour 12/hour 12/hour 12/hour 13/hour 13/hour 13/hour 13/hour
EI
Radiologist 1,337 1,337 1,337 1,337 1,337 1,337 1,337 1,337 1,337 1,337 1,337
MRT 1,337 1,337 1,337 1,337 1,337 1,337 1,337 1,337 1,337 1,337 1,337
Secretary 1,337 1,337 1,337 1,337 1,337 1,337 1,337 1,337 1,337 1,337 1,337
Secretarial
Assistant
1,316 1,342 1,369 1,397 1,424 1,453 1,482 1,512 1,542 1,573 1,604
Custodian
398 406 414 422 431 439 448 457 466 476 485
CPP
Radiologist 2,544 2,544 2,544 2,544 2,544 2,544 2,544 2,544 2,544 2,544 2,544
MRT 2,544 2,544 2,544 2,544 2,544 2,544 2,544 2,544 2,544 2,544 2,544
Secretary 2,544 2,544 2,544 2,544 2,544 2,544 2,544 2,544 2,544 2,544 2,544
Secretarial
Assistant
2,302 2,351 2,402 2,453 2,506 2,544 2,544 2,544 2,544 2,544 2,544
Custodian 575 590 605 621 637 653 670 686 704 721 739
Table 15: Projected salaries and wages for staff and projected EI and CPP benefit costs.

32
Salaries for radiologists, the secretary and secretarial assistant were determined based on the
market rate for attracting the required personnel with qualifications in the province. The
custodian will be payed the minimum wage rate for Saskatchewan ($10.5/hour). All salaries and
wages were adjusted for inflation at a rate of 2% annually. EI premiums for radiologists, MRTs
and the secretary were capped at the maximum annual employer premium of $1,337. This will be
the portion of the EI premium paid from the clinic with a maximum of $955 paid by the
employee (CRA, 2016). For employees that fall below the maximum annual insurable earnings
($50,800) such as the secretarial assistant and the custodian, EI premiums were paid at a rate of
1.88% of annual earnings plus 40% from the employer (CRA, 2016). CPP contribution
premiums were calculated using the difference of the maximum annual pensionable earnings
($54,900) and the basic exemption amount ($3,500) multiplied by the employee and employer
contribution rate of 4.95% (CRA, 2016). For the secretarial assistant and custodian, annual
compensation was used since this was less than the maximum annual pensionable earnings
amount.

33
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Worker’s Compensation
Radiologist 750 765 780 796 812 828 845 862 879 896 914
MRT 288 293 299 305 311 317 324 330 337 344 350
Secretary 188 191 195 199 203 207 211 215 220 224 229
Secretarial Assistant 125 128 130 133 135 138 141 144 146 149 152
Custodian 38 39 39 40 41 42 43 43 44 45 46
Holiday Pay
Radiologist 17,308 17,654 18,007 18,367 18,734 19,109 19,491 19,881 20,279 20,684 28,131
MRT 8,846 9,023 9,204 9,388 9,575 9,767 9,962 10,161 10,365 10,572 14,378
Secretary 4,327 4,413 4,502 4,592 4,684 4,777 4,873 4,970 5,070 5,171 7,033
Secretarial Assistant 2,885 2,942 3,001 3,061 3,122 3,185 3,249 3,314 3,380 3,447 4,688
Custodian
872 890 908 926 944 963 982 1,002 1,022 1,042 1,418
Table 16: Projected worker’s compensation and holiday pay expenses for staff.
Workers compensation for all staff was calculated at a rate of 0.25% multiplied by annual
compensation (Saskatchewan Worker’s Compensation Board, 2016). Holiday pay was calculated
at a rate of 6% of annual compensation for the first 9 years with a rate of 8% used for the 10th
year of operations in 2030. This was calculated assuming that all staff remained employed by the
clinic for the first 10 years of operations (Canpay, 2016). Additionally, all employees at the
clinic with the exception of the custodian will be eligible to contribute to a corporate defined
contribution registered retirement plan (Table 1). An initial target retirement fund (TRF) of
$100,000 will be established by SaskMedical Diagnostics in 2020, with employees able to
receive matching contributions to the plan from the clinic up to a certain amount. Vanguard
Canada will be the fund holder for the DC-RRP. Annual costs of corporate contributions to the
TRF will be adjusted for inflation at a rate of 2% annually. For shareholders of SaskMedical
Diagnostics and clinic partners holding class A shares, 30% of operating cash flows will be paid

34
out as dividends. Dividend payouts are projected to be $411,176 in 2020 and decline to $59,359
in 2030 as operating cash flows decline (Figure 7).
Figure 7: Projected dividend payments as a percentage of operating cash flows from 2020 to
2030.
5.8 Training and Education
Both radiologists and MRTs will be required to complete annual CME accreditation to maintain
their respective licenses in Saskatchewan. For MRTs, CME training will be conducted in house
at SaskMedical Diagnostics. Due to having licensed radiologists at a state-of-the-art facility,
MRTs will be able to receive their required training without travelling to another facility. This
will also make the training process more efficient, as CME training can be accommodated into
the work routine depending on work load. Radiologists will have the opportunity to schedule
their own training depending on interests and opportunities. CME training for radiologists can
consist of a variety of opportunities ranging from conferences to research projects. Radiologists
will be expected to seek their own CME training depending on their interests and availability.
Radiologists will be required to pay for CME training opportunities as a condition of maintaining
their medical license in Saskatchewan. The secretary and secretarial assistant are not required to
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Amount($)
Time (Years)
Dividend Payout and Operating Cash Flows for Years of Operation
2020-2030
Dividend
Payout
Operating
Cash Flows

35
complete ongoing training unless a relevant learning opportunity that benefits the clinic is
approved by the Medical Director.

36
6.0 Marketing
6.1 Market Demand for MRI Services
The use of MRI technology has significantly expanded in Saskatchewan with 8 public MRI units
available in the province and two private MRI units operational in Regina. There are currently no
private MRI clinics outside of Regina. Demand for MRI services in Saskatchewan have also
increased substantially in the past 10-15 years with the number of exams in Saskatchewan
increasing from 12,628 in 2003/2004 to more than 42,000 exams in 2011/2012 (Figure 8).
Figure 8: Number of MRI exams conducted annually in Saskatchewan from 2003-2012 (CIHI,
2012).
While the number of MRI exams have steadily increased in Saskatchewan, wait times for
receiving diagnostic imaging services in the province have remained relatively unchanged.
Between 2011 and 2015, wait times for MRI services in the province remained relatively the
same at the 90th percentile (Figure 9).
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
NumberofMRIExams
Time (years)
Number of MRI Exams in Saskatchewan from 2003-2012

37
Figure 9: Wait times for MRI services in Saskatchewan from 2008-2015. Data for 2008, 2009,
2012, and 2014 are unavailable (CIHI, 2016).
Compared to other provinces, utilization of MRI services in Saskatchewan remain below the
national average. This is due in part to limited accessibility to MRI services in the province.
Many Saskatchewan residents who are on a low-priority for receiving MRI services and wait
longer than the recommended wait time period seek treatment out of province either through
private clinics in Alberta, or at the Mayo Clinic in the US. Compared to the national average of
49 exams per 1000 people in Canada, Saskatchewan ranks lower at 39 exams per 1000 people
(Figure 10). This data indicates that there is an insufficient supply of MRI clinics in
Saskatchewan with residents being forced to seek treatment outside of their home province.
0
20
40
60
80
100
120
140
160
2008 2009 2010 2011 2012 2013 2014 2015
Waittime(days)
Time (years)
Wait Times for MRI Services in Saskatchewan from
2008-2015
50th
Percentile
90th
Percentile

38
Figure 10: Number of MRI exams per 1000 people by province and territory. Data is from 2012
(CIHI, 2012).
With MRI units with a magnetic strength of 7T now available on the market and more powerful
software allowing for more specific studies to be performed, MR imaging is becoming more
efficient. These added features will increase the rate of throughput at many MRI clinics resulting
in lower costs and higher revenue streams. Also, with radiology services being increasingly
outsourced to lower cost countries as a result of globalization, MRI clinics in North America will
be under increasing pressure to lower costs in an effort to remain competitive.
6.2 Competitor Analysis
In Saskatchewan, there are currently two private MRI clinics operational in the province:
OpenSkies MRI and Mayfair Diagnostics both of which are located in Regina. These clinics
have both started providing user-pay MRI services as of enforcement of the MRI Facilities
Licensing Act in March 2016. Outside of Saskatchewan, many residents seek private MRI
0
10
20
30
40
50
60
70
NumberofMRIExamsper1000people
Province/Territory
Number of MRI Exams performed per 1000 people by Province and
Territory for 2012

39
services at clinics in Alberta and the Mayo Clinic in the US. The most prominent MRI clinics
located in Alberta are Central Alberta Medical Imaging Services (CAMIS), Medical Imaging
Consultants (MIC), Insight Medical Imaging, and Canada Diagnostics Centre (CDC).
Table 17: Main MRI clinics in Alberta and Saskatchewan.
These clinics all offer comparable quality and professional service due to the highly regulated
nature of health care in Canada. SaskMedical Diagnostics is expected to become the first private
MRI clinic in Saskatoon. This will provide the clinic with the competitive advantage of offering
MRI services to patients in Saskatoon and the surrounding area without requiring extended
travel. This will make SaskMedical Diagnostics the first choice clinic for patients in central and
northern Saskatchewan. The services provided by SaskMedical Diagnostics will be consistent
with what is offered by competitors and outlined in the SMA fee guide (Table 19). SaskMedical
Diagnostics will use the same MRI unit as that used by Mayfair Diagnostics. SaskMedical will
have a competitive advantage over OpenSkies MRI in being able to offer breast exams. Due to
the open-bore design of OpenSkies’1.5T Phillips Panorama MRI unit, breast exams are not
possible. OpenSkies will have an advantage over SaskMedical Diagnostics and other competitors
using conventional MRI units in the ability to accommodate obese patients as a result of the
Competitors Location MRI Unit Pricing
Provincial
Government
Saskatoon Health
Region
1.5T Siemens
3.0 T Siemens
Free
Mayfair
Diagnostics
Regina, SK
1.5 GE Optima with
GEM suite coil
Dependent on exam
($550-$1,100)
OpenSkies MRI Regina, SK
1.5T Phillips Panorama
HFO
Dependent on exam
($550-$1,100)
CAMIS
Red Deer, AB
Olds, AB
Stettler, AB
1.5T Siemens $725-$1,100
MIC Edmonton, AB 1.5T Siemens $575-$1,000
Insight Medical
Imaging
Edmonton, AB 1.5T Siemens $550-$925
CDC
Calgary, AB
1.5T GE Signa
First scan is $770
Each additional scan
50% off
SaskMedical
Diagnostics
Saskatoon, SK
1.5T GE Optima with
GEM suite coil
Dependent on exam
($550-$1,100)

40
open-bore design. SaskMedical Diagnostics will also be at a disadvantage due to immediate
competitors in Regina already having a brand presence in the market when the clinic opens.
SaskMedical Diagnostics will require aggressive marketing in central-northern Saskatchewan to
create brand awareness in these target regions. Due to all clinics in Saskatchewan and Alberta
offering similar services within the same price range, SaskMedical Diagnostics will have a
competitive advantage within central and northern Saskatchewan due to being strategically
located in Saskatoon. With excess demand expected to increase in Saskatchewan as a result of
population growth, SaskMedical Diagnostics is expected to hold 7.8%-8% market share for the
first 10 year operating period without targeting markets outside of Saskatchewan (Figure 11).
Figure 11: Expected number of MRI exams for SaskMedical Diagnostics and competitors (2020-
2030)
New entrants entering the market in Saskatchewan as a result of MRI privatization legislation
will result in lower market prices for MRI exams in the province. This will reduce profitability
for SaskMedical Diagnostics. Long term success in Saskatchewan will require SaskMedical
Diagnostics to establish brand awareness within the province. In 2031, SaskMedical Diagnostics
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
NumberofMRIExams
Time (Years)
Expected Number of MRI Exams for SaskMedical Diagnostics and
Competitors (2020-2030)
Excess
Demand
Mayfair
Diagnostics
OpenSkies
MRI
Medicare
SaskMedical
Diagnostics

41
will also have to invest in building and equipment upgrades to expand the service offerings of the
clinic in order to remain competitive long term.
6.3 Customer Analysis
For free standing MRI clinics in Canada, the majority of patients that access MRI services are
private paying citizens. For Saskatchewan, due to legislation in the MRI Facilities Licensing Act,
the number of patients receiving exams at private MRI clinics will be evenly split between
publicly funded and user-pay exams. This means that the source of operating funds for the clinic
will be equally distributed between the Saskatoon Health Region and private insurance coverage
and out-of-pocket payments (Table 18).
Table 18: Percentage of operating funds by source for Canadian MRI clinics using 2006 CIHI
data for January 1, 2006 (CIHI, 2006) and predicted percentages based on legislation from the
MRI Facilities Licensing Act.
The patients receiving treatment at SaskMedical Diagnostics will have a referral from a
physician for one of the treatments that the clinic provides (Table 19). Based on outpatient data
in Ontario from 2005-2006, it is expected that the majority of exams conducted at the clinic will
be of the head and spine (Figure 15). Patients receiving MRI exams will come from a wide
ranging demographic. Due to the scope of potential injuries that can necessitate a referral for an
MRI, there is no particular age group that will be targeted. Patients from the entire demographic
spectrum can require MRIs, ranging from a spine MRI exam for the geriatric patient suffering
from lower back pain to the post-concussion adolescent requiring a head MRI exam. For publicly
funded MRI exams, there is no distinction of patients based on socio-economic background, as
all patients would receive a publicly funded exam regardless of ability to pay. Due to the costs
Sources of Operating Funds
As of January 1,
2006 (Canada)
As of January 1, 2020
(Saskatchewan)
Provincial Governments 0% 40%
Workers Compensation Board 6.30% 6.30%
Private Health Insurance, Private
Insurance, Out-of-Pocket Payments
79% 40%
Other Types of Funding 14.70% 14.70%

42
associated with paying out of pocket for an MRI exam, socio-economic distinctions in the patient
clientele will be more pronounced for privately-funded MRI exams.
6.4 Target Market
Figure 12: Number of Saskatchewan residents by total income group category for 2013
(Statistics Canada, 2015).
Coupled families with combined incomes totalling more than $75,000 are also groups where
potential patients are likely to pay privately for MRI exams. In Saskatchewan, coupled families
earned over $90,000 in annual income for 2013 (Figure 13). These families are also more likely
to become private MRI patients if they have children. If the child receives a referral for an MRI
exam but is on a low priority waiting list, the family is likely to pay out of pocket for a private
MRI exam to skip the queue and give their child more immediate treatment. For married and
common-law families with children in Saskatchewan, there were 100,030 and 16,200 in
Saskatchewan as of 2011 respectively (Figure 14). The coupled family target market provides the
best opportunity for SaskMedical Diagnostics to compete for market share in the user-pay MRI
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
NumberofSaskatchewan
Residents
Income Groups
Number of Saskatchewan Residents by Income Group for 2013

43
market. Maintaining competitive pricing relative to competitors and being the sole provider of
private MRI services in Saskatoon will allow SaskMedical Diagnostics to effectively target this
market segment.
Figure 13: Median total income by family type for Saskatchewan in 2013 (Statistics Canada,
2015).
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
All Census
Families
Couple Families Lone-parent
Families
Persons in non-
census families
MedianTotalIncome($)
Family Types
Median Total Income by Family Type for Saskatchewan in 2013

44
Figure 14: Number of married and common-law families in Saskatchewan with and without
children for 2011 (Statistics Canada, 2011).
6.5 Services Offered
SaskMedical Diagnostics will provide diagnostic imaging services to private paying Canadians
and to the Saskatoon Health Region. The Saskatchewan Medical Association (SMA) provides
guidelines for recommended pricing for uninsured medical procedures (SMA, 2015). Due to the
standards for diagnostic imaging being closely regulated by the province, the service offering
provided by SaskMedical Diagnostics will be indistinguishable from the quality of service at any
other certified MRI clinic. The distinguishing factor that will create a positive brand image for
patients will be the professional interactions with patients and the efficiency of the clinic.
Professionalism and emotional maturity will be selected for during the recruitment and selection
process. Operational efficiency in being able to reduce wait times in the clinic and improve the
expediency of procedures will be dictated by the experience of the staff that are hired. There will
also be a learning curve required by staff at the clinic, which will result in greater efficiency and
service as the clinic operates.
0
50,000
100,000
150,000
200,000
250,000
Married Couple Families Common-law Couple Families
NumberofCensusFamilies
Census Families
Number of Married and Common-law Census Families in
Saskatchewan for 2011
With
Children
Without
Children
Total

45
Table 19: SMA pricing guidelines for MRI exams.
These pricing guidelines will be used for negotiating pricing arrangements with the Saskatoon
Health Region. Because these prices are recommendations only, actual pricing for private MRI
services will be dependent on external market conditions and competitor pricing.
Exam Type Description
Total Maximum Cost
(Recommended)
Average
Exam Cost
(Actual Price
with Markup)
Breast MRI
Three spin echoes of the
female breast (unilateral or
bilateral) with contrast dye
$286.8
$550-$1,100
Head and Neck
Multislice MRI
Three spin echoes of the head
and neck with or without
contrast dye
$286.80
Thorax
Multislice MRI
Three spin echoes of the thorax
with contrast dye
$343.00
Pelvis Multislice
MRI
Three spin echoes of the pelvis
with contrast dye
$343.00
Extremities
Multislice MRI
Three spin echoes of the
extremities with or without
contrast dye
$272.80
Spine MRI (one
spine zone)
Three spin echoes of spine
zone with or without contrast
dye
$272.80
Spine MRI (two
spine zones)
Three spin echoes of two
adjoining spine zones with or
without contrast dye
$272.80
Spine MRI
(three spine
zones)
Three spin echoes of three
adjoining spine zones with or
without contrast dye
$424.00

46
Figure 15: Number of Outpatient MRI exams in Ontario from 2004-2005 by anatomical site.
(ICES, 2006).
The costs of a typical MRI exam can range anywhere from $500-$1,100 depending on the type
of study done and whether or not contrast dye is required. Additionally, there is a lost
opportunity cost from missing work that could be problematic for some patients. As a result, it is
expected that most patients that pay privately for an MRI exam will be in a middle to high
income group earning > $75,000 (Figure 12).
6.6 Revenue and Service Level Targets
Based on the expected competitive environment, the primary objective of SaskMedical
Diagnostics is to capture and maintain 8% market share in the Saskatchewan MRI market from
2020-2030 (Figure 11). This primary objective will be supported by the goal to achieve and
maintain an annual service level of 5500 exams every year from 2020 to 2030. If this goal is
accomplished, SaskMedical Diagnostics expects to maintain profitability until 2030, with further
building and technology upgrades required to maintain profitability past 2030.
Excess demand for MRI services is expected to continue throughout the first 10-year phase of
operations. The clinic is expected to operate at close to full capacity throughout the first phase of
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Brain Spine Extremities Other
NumberofExams Number of Outpatient MRI Exams by Anatomical Site, Ontario, 2004-
2005

47
operations (Figure 11). With increased population growth, excess demand is expected to increase
which will be absorbed by new entrants entering the market and competitors from out of
province. For the four geographical regions targeted by SaskMedical Diagnostics (Table 20),
direct competitors are not expected to have a significant impact on the market price until after the
first 5 years of operations (2025-2030).
Figure 16: Projected Revenue for SaskMedical Diagnostics from 2020-2030.
Revenues for SaskMedical Diagnostics are predicted to decline from $4.4 million in 2020 to $2.9
million in 2030 (Figure 16). From 2020-2026 revenue is predicted to decline at an accelerated
discount rate of 0.5% annually. As an increasing number of entrants enter the market, it is
expected that the accelerated discount rate will increase to 1.5% annually from 2026 to 2030
(Table 41). This decline in revenues will be due to increased price pressure from new entrants in
the central-northern region of Saskatchewan.
6.7 Distribution Strategy
Distribution channels are not relevant for MRI services due to the advanced technology and
highly trained personnel that are required to provide the procedure as well as legal requirements
that restrict MRI services to licensed healthcare facilities. Due to the location of the clinic in
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Revneue(Millionsof$)
Time (Years)
Projected Revenue for SaskMedical Diagnostics for
Years of Operation (2020-2030)

48
Saskatoon, SaskMedical Diagnostics will be in a strategic position to service the needs of
patients in central and northern Saskatchewan without necessitating the need to seek service at
clinics in Regina or out of province.
6.8 Pricing Policy
Figure 17: Projected market price for MRI exams in Saskatchewan. New entrants entering the
market are expected to place downward pressure on the market price.
Pricing policy for SaskMedical Diagnostics will follow the market rate for MRI exams in the
province (Figure 17). As new entrants enter the market, revenues are expected to decline as the
market rate decreases. For publicly-funded exams carried out for the Saskatoon Health Region, it
is predicted that the negotiated exam price will be similar to the market rate due to the bargaining
power of SaskMedical Diagnostics as a result of being the only private clinic in Saskatoon.
Market-rate pricing is also used by other competitors in Saskatchewan and Alberta. Residents in
central and northern Saskatchewan will have an incentive to go to SaskMedical Diagnostics for
treatment due to the lower travel costs compared to other clinics.
0
100
200
300
400
500
600
700
800
900
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
AverageMarketPrice($)
Time (Years)
Projected Market MRI Exam Price for Saskatchewan from
2020-2030

49
6.9 Segmentation, Targeting and Positioning
For the purposes of segmenting private MRI service demand in Saskatchewan, annual income is
used as this is a direct indicator of the ability of patients to pay for private MRI services. For this
analysis, potential patients that will be able to pay for a private MRI exam are expected to have
an income over $75,000 (Figure 12). This puts the number of patients in Saskatchewan receptive
to private MRI services at 242,000 (figure 12). In addition, because of the central location of the
clinic within the province, four main geographical regions will be targeted for attracting private
MRI patients: Saskatoon, Prince Albert, Lloydminster, and North Battleford (Table 20).
Communities Population (2011)
Number of MRI
Exams per 1000
people (2012)
Expected number of
MRI patients
Saskatoon 260,600
39
10,163
Prince Albert 42,673 1,664
Lloydminster 30,798 1,201
North Battleford 19,216 749
Table 20: Targeted cities with population and expected demand of private MRI services.
These four cities will be the focus of marketing efforts for attracting MRI patients to the clinic.
Because available census data for these regions are from 2011 and 2012, it is expected that
demand will be higher when the clinic begins operations in 2020.
Targeting prospective patients for MRI services will be dependent on the types of MRI exams
available at the clinic. The clinic will be capable of providing all types of MRI exams offered in
the SMA fee guide (Table 19). This service offering will ensure that Saskatchewan residents are
able to obtain essential MRI services without having to seek treatment outside of the province.
The clinic will be positioned to provide a core service offering focusing exclusively on MRI
exams. As demand for MRI services in the province have outstripped available capacity, a
private clinic that focuses exclusively on MRI services will be able to provide the greatest
benefit to the people of Saskatchewan.

50
6.10 Marketing Strategy and Advertising Budget
Figure 10: Projected marketing budget for SaskMedical Diagnostics from 2020-2030.
Marketing success for SaskMedical Diagnostics will be heavily dependent on attracting referrals
from physicians in Saskatchewan. Print advertisements will be made available in the form of
brochures that will be distributed in all major medical clinics and hospitals within the targeted
regions of Saskatoon, Prince Albert, Lloydminster and North Battleford
Figure 18: Projected marketing costs for the first 10 years of operations and advertising media.
Marketing efforts will be focused primarily on attracting patients within the four main target
cities (Table 20). Publicly-funded MRI patients will be attracted through receiving referrals from
physicians within the Saskatoon Health Region. To increase awareness of the clinic to
physicians, print brochures will be made available in medical clinics and hospitals in Saskatoon
and other target regions. For patients receiving care through the Saskatoon Health Region, exams
will be directed to the private clinic when the public MRI facility at RUH is at full capacity. Print
advertisement expenses are expected to cost $7,000 in 2020 increasing to $9,287 by 2030 (Figure
18). To increase brand awareness of SaskMedical Diagnostics in the general public, website and
radio advertising will be used. Radio time will be purchased from major radio stations in the
targeted regions such as C95 and Power 99 FM during peak commute times in the morning and
afternoon. This strategy is designed to target the parents of coupled families that are most likely
to pay for private MRI services (Figure 14). The website will also allow for online appointments
to be scheduled by patients and will provide information to patients and physicians about
diagnostic imaging through articles and research papers that will be regularly posted on the
website. Start up costs for website development is expected to be $50,000 in 2020 with
maintenance costs starting at $1,800 in 2021 and increasing to $2,151 in 2030 (Figure 18). Radio
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
Cost($)
Time (Years)
Projected Marketing Costs for SaskMedical Diagnostics from
(2020-2030)
Website
Radio
Print

51
advertising costs are expected to start at $30,000 for 2020 and increase to $39,801 in 2030
(Figure 18).
6.11 SWOT/TOWS Summary of Marketing Strategy
Opportunities
 Temporary dominance
in target market before
new entrants enter
geographical region
Create favourable brand
awareness before new
entrants enter market
Threats
 Technological
obsolescence
Competition from
established clinics in
Regina and Alberta
Strengths
 First mover advantage
in untapped market
 Presence in central
northern Saskatchewan
without immediate
competitors in targeted
regions
Strengths to Exploit
Opportunities
 Use temporary first
mover advantage to
solidify brand image
Fine tune operating
procedures and processes
before significant
competitors arrive
Strengths to Neutralize
Threats
 Use leadership position
in target region to build
cash reserves in
preparation for upgrade
in 2031
Develop brand loyalty
with community to
increase barriers to
competitors
Weaknesses
 10 year wait before
significant clinic upgrades
Uncertainty risk due to
nascent industry
conditions
Weaknesses that
Interfere with
Opportunities
 Lag time before clinic
upgrade can negatively
impact brand awareness
 Uncertainty risk can
inhibit capture of target
market share
Weaknesses that
Increase the Risk of
Threats
 Lag time before clinic
upgrade increases the risk
of technological
obsolescence
Uncertainty in new
industry creates
information asymmetry
between SaskMedical
Diagnostics and
established competitors
Figure 19: SWOT/TOWS summary of strategy implications in marketing plan.

52
7.0 Accounting and Finance
7.1 Projected Profitability
If SaskMedical Diagnostics maintains a service level of 5500 exams a year, the business is
expected to generate positive net cash flows for the first 9 years of operations (Figure 20). By the
year 2030, the exam market price is expected to decline to $544 per exam assuming the base case
discount rate is applied (Table 45). This will result in the clinic becoming unprofitable without a
significant expansion of the clinic and an upgraded MRI theatre. With an expected cash balance
of $7.2 million (Table 23) and debt fully paid by 2030 (Table 30), SaskMedical Diagnostics will
be in a favourable position to finance the expansion in 2031 assuming that the projected
profitability targets are met.
Figure 20: Projected net income and cash flows for SaskMedical Diagnostics from 2020 to 2030.
-400,000
-200,000
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Amount($)
Time (Years)
Projected Net Income and Net Cash Flow for Years of Operation
(2020-2030)
Net Income
Net Cash Flow

53
7.2 Sensitivity Analysis
Figure 21: Sensitivity analysis of cash flows for SaskMedical Diagnostics based on changing the
number of exams performed annually and the discount rate of the market exam price from 2020
to 2030.
Figure 22: IRR at different service levels and market exam price discount rates for SaskMedical
Diagnostics from 2020 to 2030.
0%
5%
10%
15%
20%
25%
5500
exams
5250
exams
5000
exams
4750
exams
4500
exams
4250
exams
IRR(%)
Annual Service Level
Sensitivity Analysis ofIRR at Different Service Levels and Market Exam Price
Discount Rates
Base Case
Base Case
(+1%)
Base Case
(+2%)
Base Case
(+3%)
Base Case
(+5%)
(600,000)
(400,000)
(200,000)
0
200,000
400,000
600,000
800,000
1,000,000
5500
exams
5250
exams
5000
exams
4750
exams
4500
exams
4250
exams
4000
exams
AverageCashFlowsfrom
2020-2030($)
Number of Annual Exams
The Effect of Number of Annual Exams and Discount Rate of Exam
Market Price on Average Cash Flows from 2020-2030
Base Case
Base Case
+1%
Base Case
+2%
Base Case
+3%
Base Case
+4%
Base Case
+5%

SaskMedical Diagnostics (P.C.) BJORN HUNTER

SaskMedical Diagnostics (P.C.) BJORN HUNTER

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