Pate Memorial Hospital Essay Example

Pate Memorial Hospital Paper Pate Memorial Hospital is a 600-bed, independent, not-for-profit, self-supporting hospitals. PHC, an ambulatory health care facility, was opened by PMH. Sherri Worth, a new assistant administrator of Pate Memorial Hospital in charge of the PHC, was told that a firm plan establishes a clinic five blocks north of PHC. It is a big competitor for PHC. On the other hand, financial problems, Short service hours, long waiting time and lacking of gynecological services are all be the problem faced by Worth. Therefore, Sherri was requested to analyze the PHC’s performance and take Medcenter, a possible competitor, into consideration which either did or not opens a clinic in north. SWOT analysis Strengths| Weaknesses| * PMH is financially stronger than most of the metropolitan-based hospital. It is debt-free and has highest overall occupancy rate among the city’s six general hospitals strength the support to PHC. * 50% of office workers are willing to visit PHC if necessary. 44% of business-initiated visits. * Approximately 5% of visits in each month were repeat visits. * The referrals objective was met means it brought more patients to hospital. | * Because of hinting at crass commercialism, No adverting or other types of promotion are planned. * Bad debt of PHC needs to be decreased. * Patients still dissatisfy with service hours. * Waiting time is too long, particularly during the lunch hours (11:00 A. M-2:00 P. M. ) * Lack of gynecological services. | Opportunities| Threats| * Population in the area where PHC located was expected to grow 6% per year. We will write a custom essay sample on Pate Memorial Hospital specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Pate Memorial Hospital specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Pate Memorial Hospital specifically for you FOR ONLY $16.38 $13.9/page Hire Writer * Increasingly depend on inner-city residents who have a higher median age and higher incidence of Medicare coverage. * 20% more personal illness visits next year than last year. * Construction in the downtown area had stimulated worker’s compensation activity and then employment physicals would grow. | * Growth of population in the suburban * Potential competitors exist possibly. * Possibility of customers’ loss. | Critical issues The PHC has met some problems in different areas. That is why the PHC should  take steps to improve its financial standing and can be self-supporting in April 2001. The possible competitor may establish a new clinic five blocks of north of PHC. Estimation of potential impact to PHC by new clinic is very important. The alternatives should consider this point and see how PHC make promotion in market. Female account for 70% of total visits to PHC, they should maintain this portion of patients. It is a possible that a third of current personal illness/exam patients from the northern portion will switch to the new clinic because of location. Alternatives /Alternatives | Pros | Cons | Competition effect| ?Expand service hours| ? Decrease waiting time.? Reduce crowding during the lunch period.? Increase patients.? More convenient especially for employed patients who want to do physical examination. | ? A 33% increase in personnel cost as well as the cost of another physicians.? It cannot be break-even(see Exhibit 1 and 2)| After the new clinic build up, the visits in the north will switch to new clinic, the benefit of PHC will decrease. (see Exhibit 2)| ? Add gynecological service| ? increase more women patients; additional 2000 visits per year? increase profit, net profit is $62,400(See Exhibit 3)| ? Increase the cost of physicians. | ? No impact from competing clinic| ? Improve business-initiated visits| ? increase an additional 65 employment patients every month. | ? need expend service hours? Increase personnel cost and cost of another physician? the benefit cannot cover the cost. (see Exhibit 4)| ? Not be affected by competing clinic. Because most construction was being undertaken in the area of south, west, and east of PHC. | ? Advertise in the downtown weekly newspaper| ? improve people’s awareness of PHC? Attract more patients? compete with competitors(see Exhibit 5)| ? The weekly advertisementCost$10,400 per year| ? No effects of competing clinic. Just improve the competition| Recommendation We can see from alternatives of expand service hours and improve business-initiated visits that it will increase the cost of physicians and personnel. The benefit cannot cover the cost. The full capacity of PHC would be 32 visits a day, however, the performance of May 1999-March 2000, the  average patients is about 15 visits per day. It states that resources of PHC were not utilized completely. Therefore, they do not need to hire more physicians. These two alternatives should not be adopted. As to advertisement, in my mind, it could have a try in this alternative because the cost of advertisement can recover cost while increasing 196 patients. On the other hand, People could aware of the PHC via making advertisement. It is also a good way to attract more patients and compete with competitors. The gynecological service should be involved because of 3 reasons: Firstly, female patients account for 70% in the PHC. Secondly, the Exhibit 3 shows adding gynecological service can bring 2000 additional visits. Thirdly, the benefit can cover cost; net profit is $62,400 of gynecological service. Profit analysis for alternatives Exhibit 1 Service hour extension without competitor Exhibit 2 Service hour extension with competitor Exhibit 3 Gynecological service benefit| cost| additional 2000 visits $104 per visit104x2000=$208,000| ? Salary payment$70 per hourx8h/dx260d=$145,600| Total $208,000| Total $145,600| Net profit(loss) $62,400| Exhibit 4 Improving relationship with business community benefit| cost| ?65 additional physical visits per monthCharge per visit: $94x(1+8%)=$101. 5?Revenue: 65x12x101. 5=$79,170| ? Additional 33% personnel cost and the cost of another physician? Personnel cost 33%x168376=$55,564? Physician cost $137,280| Total $79,170| Total $137,280| Net profit (loss) ($58,110)| Exhibit 5 Break-even analysis of advertisement Contribution margin $185,224/3490 = $ 53| Patient visits increase$10,400/$53 = 196| Pate Memorial Hospital Essay Example Pate Memorial Hospital Paper In mid-April 2000, Pate Memorial Hospital (PMH) uncovered a concerning piece of news. This news was discovered by Sherri Worth, assistant administrator at Pate Memorial Hospital in charge of the hospital’s Pate Health Clinic (PHC). Worth discovered that a firm had been conducting a study to determine whether there was sufficient demand to establish a clinic five blocks north of the Pate Health Clinic, the opening date for this potential clinic was May 2001. Worth believed that the firm responsible for these tests were Medcenter. Medcenter, a privately owned suburban ambulatory facility, appeared to be successful in its suburban location. The objectives were detailed to Worth by the Pate Memorial Hospital Administrator, Dr. Roger Mahon. These objectives are: ?To draft a concise analysis of Pate Health Clinic’s position ?Specify and evaluate the alternatives assuming Medcenter does open up a clinic five blocks north of PHC ?Specify and evaluate the alternatives assuming Medcenter does NOT open up a clinic five blocks north of PHC ?To have the Pate Health Clinic be self-supporting by April 2001 The Pate Memorial Hospital is financially stronger than most of the metropolitan-based hospitals in the United States. We will write a custom essay sample on Pate Memorial Hospital specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Pate Memorial Hospital specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Pate Memorial Hospital specifically for you FOR ONLY $16.38 $13.9/page Hire Writer It has the highest overall occupancy rate among the city’s six general hospitals and is debt free. Despite PMH’s success the board of trustees had serious concerns about its patient mix. Without a stronger stable inflow of short-stay, privately insured patients, the financial health of the hospital would be jeopardized. This situation called for an ambulatory facility to be opened downtown 10 blocks north of the hospital, thus the Pate Health Clinic was built. The Pate Health Clinic is a non-profit firm that opened in May 1999. Each month since the opening the PHC has been closer to the goal of self-supporting. Starting out in May 1999 with a net loss of $53,028 and ending in March of 2000 with a Net loss of $11,940. PHC faces both opportunity and issues with the growing area in which the clinic is located. Long wait times and limited hours hamper the clinic’s success. Now, with the threat of a new clinic opening just 5 blocks north of the PHC it is time to make improvements. PHC must not only focus on profitability, but also awareness in the community. Dr. Roger Mahon said it himself: â€Å"We have a lot riding on the PHC. Making it work involves not only dollars and cents, but our image in thecommunity as well. Problem Definition The primary problem in this case is concerning the threat of competition. Specifically, ? How should Sherri Worth maintain the majority of the PHC’s patients with the threat of Medcenter opening a clinic 5 blocks north, while balancing financial problems, short service hours, long waiting times, and lack of gynecological services. Alternative Identification 1 Do nothing ?With a growing population in the area the Pate Health Clinic is increasing the amount of patients and revenue each month. At this rate the PHC should be close to self-supporting in the future. Also, the threat of Medcenter opening a clinic 5 blocks north of the PHC is merely just a speculation. If Medcenter decides against opening a clinic then there is less of a reason for the PHC to change operation tactics. 2 Modify clinic operations 2A. Expand clinic availability hours, the clinic currently is open 8am-5pm oTo do this the PHC must find out what hours would be most efficient to expand upon oDetermine whether a second physician will be needed 2B. Offer gynecologic services at the PHC oDetermine the amount of patients that would make use of this service oEstablish the profitability of a gynecologist physician 2C. Improve waiting times, specifically during lunch hours (11am-2pm) oDetermine the most efficient and effective method of achieving this goal oConsider the benefit of hiring a second doctor Relevant Information Environmental Factors Size Growth of Market During the planning process of the Pate Health Clinic, Worth held discussions with the city planners. In these discussions it was uncovered that during 9am-5pm the service area contained 11,663 office workers during the Monday-Friday work week. The population area was expected  to grow 6 percent per year, given new building and renovation activity. The service area is a 5 block radius around the PHC. Table 1 Service Area Population Year Total Population Male (40%) Female (60%) 1999 11663 4665 6998 2000 12363 4945 7418 2001 13105 5242 7863 2002 138901 5556 8334 2003 14724 5900 8835. *INFORMATION GATHERED FROM EXHIBIT 3 IN THE CASE, GROWTH ASSUMED CONSTANT AT 6% The specific services offered by the PHC include (1) preventive health care (for example, physical examinations and immunizations), (2) minor-emergency care, (3) referral for acute and  chronic health problems, (4) specialized employer services (for example, pre-employment examinations and treatment of worker’s compensation injuries) (5) primary health care services (for example, treatment of common illnesses), (6) basic X-ray and laboratory tests. The PHC would be open 260 days a year (Monday-Friday) from 8am-9pm. Table 2 – Would you use or try PHC if necessary? Gender Yes No Total Male 88 168 256 Female 72 72 144 Total 160 240 400 Table 3 – Would you use or try PHC if necessary? Gender Yes No Total Male 1604 3061 4665 Female 3499 3499 6998 Total 5103 6560 116663.