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OVERVIEW OF THE CASE STUDY

In 1983, A Community Hospital closed and then built a new hospital located in a thinly
populated area. The land is owned by the original hospital. The Hospital is a four storey building
that includes all latest innovations that includes all latest innovations healthcare technology. The
First floor includes emergency departments, second floor includes all administrative services, 3​rd
and 4​th​ floor contains patient rooms.

For 6 months the hospital operations were chaotic for administrator of the hospital, Mr.
Sam Jones as malfunctioning arranging for new staff.

During this period, Mr. Jones had been getting some interrupting reports from Mr. Cash,
the financial controller, regarding hospital’s financial situation and he decided to settle down
things first before these financial matters. But eventually, in April, Mr. Jones requested Mr. Cash
to prepare all-inclusive report on hospital’s financial position and make a presentation to himself
and Tim Newman, the new assistant administrator.

During their first month, they lost almost $221,000 and lost $58,000 in March.
Accumulated operating deficit $715,000 for 6 months which covered with their bank line of
credit.

I. TIME CONTEXT
· October 1, 1983 when the community hospital started to operate.

II. VIEWPOINT
· The group chose the perspective of Sam Jones, Administrator in the Community Hospital.

III. STATEMENT OF THE PROBLEM


How will Sam Jones, Administrator of the hospital will maximize the facilities and to
avoid further losses?

IV. Statement of Objectives


Short term Objectives
1. To forecast the day to day operations
2. To have proper scheduling of activities
3. To employ skilled staffs
4. to gain customer

Long term Objectives:


1. To increase the income by 10% percent
2. To reduce the amount borrowed from the bank
3. To improve facilities to provide best quality health care.

SWOT Analysis

Weight Rating Weighted Score

Strengths

Land is owned by the 0.02 3 0.06


original hospital

Latest innovation in 0.4 4 1.16


healthcare technology

Sufficient numbers of 0.01 2 0.02


beds to accommodate
patients

The only hospital 0.02 2 0.04


located on the area

Weakness

The hospital is located 0.5 4 2


in a thinly populated
area

Lack of skilled 0.02 2 0.04


employees

No proper scheduling 0.03 3 0.09


Total 1 3.41

Weight Rating Weighted Score

Opportunity

new markets 0.03 3 0.09

new technology 0.01 2 0.02

Expansion of facilities 0.2 3 0.6

Increasing number of 0.3 4 1.2


diseases

Threats

New entrants of 0.03 .2 0.06


competitors

Emerging government 0.03 3 0.09


policies

increasing price of 0.4 4 1.6


supplies

Total 1 1 3.63
Strengths Weaknesses​:
1. Land is owned by the original hospital 1. The hospital is located in a thinly
2. Latest innovation in healthcare technology populated area
3. sufficient numbers of beds to accommodate 2. Lack of skilled employees
patients 3. No proper scheduling
4. The only hospital located on the area

Opportunity​: Threats
1. new markets 1. New entrants of competitors
2. new technology 2. Emerging government policies
3. Expansion of facilities 3. increasing price of supplies
4. Increasing number of diseases

Strengths:
1. Land is owned by the original hospital
Owning a land means less cost because there’s no need for rental payments.

​2. Latest innovation in healthcare technology


Having the latest innovation in healthcare technology is a strength because it can make
diagnosing and treating conditions faster, more accurate and more comfortable for the patient. It
can also lessen the burden of employees because of doing paperworks by using electronic
medical records. Electronic medical records can monitor data of patients overtime.

​ 3. Sufficient numbers of beds to accommodate patients


Bed management is important because the number of patients coming in to the hospital
cannot always be foreseen so it is important to have proper allocation of beds for patients to
prevent patients especially those with a critical condition from waiting.

4. The only hospital located on the area


Being the only hospital located on the area, people will most likely go to the hospital for
medical treatment and can gain all the market share. It’s also easier to create brand awareness to
the community since there are no competitors
Weaknesses​:
1. The hospital is located in a thinly populated area
This means that the area that the hospital is located isn’t that heavily populated, this
means lesser people live around the area and that means that lesser patients will go to the
hospital, it is a weakness because the amount of patients the hospital get affects their income or
profit.

2. Lack of skilled employees


This is a weakness because a hospital with unskilled employees treating patients
increases the hospital’s possibility of getting sued in case of a medical malpractice, having
unskilled workers also hinders the hospital’s potential to best deliver its medical services since
they are inefficient and ineffective at times.

3. No proper scheduling
Scheduling is very important in everyday operation of any organization, having no proper
scheduling is a weakness because the number of resources available such as hospital medicines,
staffs, facilities and services prepared will be mismatched with the given demand at that time
which wastes the hospital’s time and money.

Opportunity:
1. New markets
The hospital can try to acquire and provide the latest medical services or cure to people
who have acquired new emerging diseases or sicknesses. The hospital can also add new facilities
or services to cater to a population with rare diseases that can’t be cured in just any hospital.

2. New technology
This is an opportunity because having the latest medical technology can naturally attract
patients since the hospital can offer better and latest medical service and cure compared to other
hospitals.

3. Expansion of facilities
Expanding facilities is an opportunity as it can accommodate increasing number of
patients hence increasing hospital profit or income as well.

4. Increasing number of diseases


This can increase the patient load of the hospital which in turn, can increase revenue
Threats:
1. New entrants of competitors
Emergence of new competitors may wipe out the market position achieved by the
hospital. This may be due to the new entrants' better positioning, strategies or service itself.
Potential competitor with similar services offered by the community hospital can be an
alternative of future customers.

2. Increasing price of supplies


Because of continuous price increase in almost everything, products being offered by the
hospital may also augment. Consumers who can't afford to cope up with price changes may tend
to switch to another hospital that can offer same services but at a more competitive price.

3. Emerging government policies


The government can anytime implement policies that may change the hospital operations.
One example can be the taxes levied by the government. This has an influence on the hospital's
competitiveness and profitability.

1.​ ​Hire skilled employee


Sam Jones hired Tim Newman, a newly graduate with a degree of hospital
administration and being assigned as assistant administrator. Newly hired employees needs to be
trained first to learn how the hospital operates and understands the process of each department.
The Hospital needs to hire skilled operations manager to forecasts the day to day
operations and patients load to make sure that the supplies, funds and staff are enough. Also
operations manager are the one who makes proper scheduling. In addition, recruiting skilled
employees can easily adapt changes

3. Clinic Rentals for Doctors

Hospital needs to have sources of income to pay their debts. When the hospital provides
rental space for doctors clinic to practice their expertise,it may help the hospital to gain more
profit.

4. Partner with Medicaid


It is important for the hospital to have their source of income to be able to continue
providing the best quality service to patients. This program is funded by the government and
could enable the hospital to have more patients since the people with low-income who have
disabilities can finally have a medical treatment.
4. Eliminate unprofitable segments and expand in demand services

Dropping unprofitable segments can cover the fixed costs so it will not hurt the income of
the hospital. This action will help the community hospital to maximize its facilities. The
customer of community hospital are not all financial capable of paying hospitals bills. Therefore,
to provide their needs that will also help the hospital to increase sales, creating an out-patient
department can help to gain revenue through consultation fees and diagnosing test.

ACA Cost Time Support to Support to long Total


Efficiency Frame short term term objectives
objectives

Hire skilled 1 1 2 1 5
employees

Clinic Rentals 4 3 2 3 12
for Doctors

Partner with 3 1 2 2 8
Medicaid

Eliminate 2 4 4 4 14
unprofitable
segments and
expand in
demand services
VII. Analysis of Alternatives
a. Hire skilled employees
Advantages Disadvantages

● Less training required ● higher labor expense


Hiring an employee who has been Experienced employees most likely
exposed in various activities is more adaptable demand higher wage or salary because of
and it helps the company to lower the risk of qualification.
employee turnover
● Refuse to accept corrections and ideas
● Lower rate of mistakes Skilled worker refuse to be coached
Since the employee is experienced, the because they believe they are knowledgeable
employee was probably trained before by his or enough.
her former employer and more responsible than
inexperienced ones.

● More productive
Competent staff accepts responsibilities
due to readiness to work and have the initiative
to finish work promptly.
2. Clinic Rentals for Doctors
Advantages Disadvantages

● Source of income ● Delayed Rental Payments


It is a good opportunity for the hospital to ​ Since the community hospital is located
have stable income to prevent borrowing funds in a thinly populated area it may result to
from the bank. delay of payments because of lacks of
customers.
● Diverse Expertise
​ The hospital becomes more competitive ● Diverse Expertise
because the hospital have different doctors with Possibility of renting it to an unethical doctor
different expertise that leads to quality health whose behavior could affect the hospital’s
care. image.

3. Partner with Medicaid


Advantages Disadvantages

● Funded by the government ● Limited Coverage


The only source of income of the hospital are ​Procedures that are considered
patients load therefore to maintain the provision of not really necessary are typically not
good quality service, partnership with Medicaid can covered and can have an effect on
support the hospital through funding patients who don’t the health of the patient.
have the financial means to afford healthcare.

● Assists low-income individuals and families


​This program helps low-income individuals and
families cover their medical expenses. It also covers
people afflicted by certain chronic conditions or
disabilities.
4. Eliminate unprofitable segments and expand in demand services

Advantages Disadvantages
● Attract more customer ● Having common fixed costs

Not all patients are considered to be This will still hurt the profit because
admitted to the hospital. Subsequently, this fixed costs will continue even the other
Outpatient department can attract customers segments have been eliminated.
because they have all the latest healthcare
technology. ● Higher cost

● Maximize facilities If the number of customer becomes


higher, expects that it needs more staffs to
Using capacity planning the hospital accommodate patients. Hiring more staff is
can use their resources efficiently. Based on additional expense for the hospital
the case, the number of patients is increasing
and it is important that the hospital have ● Other depart ments are affected
enough space to accommodate customers
It affects the operations of the hospital
if unprofitable departments are part of the
process

VIII. Recommendation
Eliminating unprofitable segments and expanding in-demand services is the best
recommendation to offer to help the Community Hospital to maximize its facilities and to avoid
further losses. Reduction of unnecessary segments can help make new services line which
contributes to increase the income of the hospital. Although it has its disadvantages, it may be
more efficient to have a well-planned use of spaces in the hospital.
IX. Implementation program

Activity Objective of the Time Persons Expected Budget


activity Frame Involved Outcome

Observation To identify what 3 Hospital The hospital will 0


facilities of the weeks administrator be able to have a
hospital are not list of all the
needed and facilities that
unprofitable might be needed
to be modified

Evaluate To efficiently use 3-4 Hospital The department $160


department the facilities of the weeks administrator that is rarely used
that is not hospital and operations or unnecessary
needed and manager and unprofitable
unprofitable is identified

Location To determine 5 Hospital Good location $160


analysis where to locate the months Administrator resulting to good
outpatient foot traffic and a
department lot of patients
Forecast the To determine the 4 Operations The hospital $160
number of number of patient months department productivity is
patients per to be well prepared enhanced and
month and to enhance demands for
performance health services
and healthcare
needs are
predicted

Create an To determine 3-4 Administrators To effectively $160


Outpatient services to be months and Board of serve the
program offered in this directors customer and
department satisfy them

Create an To gain customers 6 Administrator, Patients load and $800


out-patient and income months operations income increased
department manager and
finance

X. Other Problems and Recommendations

The other problem that the hospital faces is that the administrator hired a newly graduate
into the new hospital. Hospital matters are a very ​s​ensitive issue because it involves the lives of
the people, so the hospital should hire skilled staff to facilitate all medical records of patients,
especially since it’s a newly established hospital. Other recommended action is to look for
doctors or businesses to rent spaces in the hospital.This is to maximize its facilities and other
way to avoid further losses or bankruptcy.

XI. Management lessons learned from the case

It is important to have proper scheduling of appointments and activities because this will
help a person to manage his/her time by listing the entire task needed to be finish. Scheduling
will help each department to know what the highly important activities are.
Capacity planning is also important to know the number of customer that the hospital can
cater because the numbers of demands change overtime. Furthermore, maximizing profit is also
crucial so that they can use the resources effectively and efficiently.