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Case - Central Hospital
Case - Central Hospital
com
Central hospital
Topic Difficulty Style
Profitability analysis Intermediate Candidate-led (usual style)
They hired you to identify the cause of this loss and how they can hit break-
even again. However, since they are an important employer, laying off
staff is not an option.
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Comments
This is a candidate-led case, so the candidate should take the case from start
to finish.
Pay close attention to the objective of the client and the fact that laying off
staff is not a viable option.
Short Solution
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Paragraphs highlighted in green indicate diagrams or tables that can be
shared in the “Case exhibits” section.
I. Revenue
Candidate should start off by asking information on revenue to see where the
problem might lie. In doing so, candidate should ask for more background info
on how revenue is earned. If candidate wants to start with cost, just move to
the second component and start there.
Revenue
II. Cost
If candidate moves to cost or start with cost, he should ask for more
information on cost structure.
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Cost
Candidate should note that the hospital made some strong assumptions when
negotiating those contracts with insurers, but the real-life situation seems to
be far different from the assumptions made. So we need to look into reducing
the costs of utilization of resources.
III. Solution
Candidate should lay out possible solutions on both the revenue and cost side
and discuss these options. Interviewer should challenge the candidate on
these options and brainstorm with the candidate.
On the cost-side, the client can stimulate staff to be more efficient with
resources and pressure vendors/suppliers to lower prices of materials &
medication.
On the revenue-side, client can sign more contracts with additional
insurers or create niche-centers of excellence to bring in more revenue
that falls outside the managed care contract.
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