Columbia Memorial Hospital Breakeven Analysis

In: Other Topics

Submitted By robdiddy2
Words 2009
Pages 9
I. Introduction

Columbia Memorial Hospital is a 300-bed acute care hospital that employs 160 staff physicians. Columbia is one of 75 hospitals owned and operated by Health Services of America, a for-profit, publicly owned company. In addition to inpatient and outpatient services, Columbia operates an emergency department within the hospital and a stand-alone walk-in (urgent care) clinic two miles from the hospital and near a major shopping mall. Due to its superior facilities, outstanding staff and reputation for quality, individualized patient care, Columbia has remained highly profitable despite the presence of two other acute care hospitals serving the same population. 1,200 of the 8,000 walk-in clinics in the United States are affiliated with hospitals. These clinics enable patients to be examined and treated by urgent care physicians on evenings, weekends and without an appointment. Additionally, patient costs, which average between $60.00 and $200.00 per visit, and copayments associated with walk-in clinics are considerably less than costs associated with emergency room visits. Ten years ago, there were five walk-in clinics throughout the city. Now, only three clinics remain and none appear to generate significant profit. While the Columbia clinic has the capacity to see up to 85 patients per day, an average of only 45 patients are actually seen each day.

II. Statement of the Relevant Issue

Columbia’s Chief Executive Officer (CEO) Mike Reynolds has concerns regarding the financial soundness of the walk-in clinic and questions whether the clinic should remain open or cease operations.

III. Strategies/Alternative Strategies

CEO Reynolds informed Columbia’s Chief Financial Officer (CFO) Brent Williams of three potential scenarios regarding the walk-in clinic: 1) the clinic could be closed;

2) the clinic could…...

Similar Documents

Unit 4 Peel Memorial Hospital

...Unit 4 – Peel Memorial Hospital Case Study GB520 Strategic Human Resources Management Professor Andrew Klein May 28, 2013 Introduction Before the 1990s, government funding allowed Canadian health care facilities to provide excellent service and quality. Increasing health care costs changed government funding, requiring providers to be held accountable for more of the financially responsibility in the early 1990s. During the mid-1990s, hospitals and regional health authorities across Canada were under siege from funding restraints, mergers and forced closures. The healthcare industry focused on delivering high-quality patient care and aligning the key stakeholders to the newly created vision during this time frame. To evolve and to survive, Peel Memorial Hospital implemented the Balanced Scorecard performance management system and that is the focus of this case study. The value of and the benefits to be gained when best practices are successfully used from the corporate sector are also highlighted. History and Issues Peel Memorial Hospital in Brampton, Ontario lacked significant targets and tired Mission Statement that tried to be all things to all people (Harber, 1998). Internal surveys revealed that employees were unclear on the organization’s strategic direction and the linkage of various programs and initiatives undertaken. In 1994, Peel Memorial Hospital took on a comprehensive continuous quality improvement training program and was followed by a lot of......

Words: 829 - Pages: 4

Memorial Hospital

...Memorial Hospital of Tampa Dr. Mountasser Kadrie HAS 505- Health Services Planning and Marketing 28 July 2012 Strayer University The health care organization I picked is Memorial Hospital of Tampa, which is known for offering excellent healthcare since 1972 right in the heart of Tampa. Memorial Hospital spans the full spectrum of medical services. With its 18 bed emergency department and and proven repute of competent and quality service, patients are in and out quickly, allowing them to move on with their diligent lives. It is also known for its extensive medical expertise offering in excess of 400 Physicians who can practice a wide range of services. Dedicated physicians rely on registered nurses, therapists, pharmacists, aides, administrators, and more. Everyone works in tight synergistic cohesion to ensure highest quality care for every patient. The task of Memorial Hospital of Tampa is to be the health care facility of superiority where, based upon our esteemed values, they provide excellent care and services, which will immensely improve the quality of life for the people and population of South Tampa. The goal of Memorial Hospital of Tampa is to provide safe, effective, excellent healthcare for their patients. Patients are encouraged to take an energetic part in their healthcare, and they believe they should make educated choices about the physicians......

Words: 515 - Pages: 3

Breakeven Analysis

...Introduction Columbia Memorial Hospital is an acute care hospital with 300 beds and 160 staff physicians, and is one of 75 hospitals owned and operated by Health Services of America, a for profit, publicly owned company. In addition, Columbia Memorial operates an emergency room and stand-alone walk-in clinics. Currently, 8,000 of these walk-in clinics exist around the country. Because of Columbia’s profitability, the other three hospitals in the area opened walk-in clinics as well, thereby increasing Columbia Memorial’s competition. Due to the increased competition, there are only three clinics left in the city, down from the original five. The profitability of Columbia Memorial’s walk-in clinic is also in question as it is operating at only half of its capacity. In order to help the clinic become profitable once again, the marketing director, Rose Daniels, has presented a plan to implement a new campaign to the public to encourage use of the walk-in clinic. This proposed marketing plan would focus on occupational health services (OHS). “OHS would provide care to local businesses including physical examinations for managers and employees; treatment of illnesses that occur during working hours; and treatment of work-related injuries” (Gapenski, 51). Not only will the plan raise capacity in the clinic, but it will also lead to better overall health outcomes and prevent possible closure of the clinic threatened by the lack of profit generation. Columbia Memorial......

Words: 1125 - Pages: 5

Winter Park Memorial Hospital

................................................................................ 5 Trend Analysis ..................................................................................................................................... 5 Competition ........................................................................................................................................5-6 Problems and Opportunities ........................................................................................................6-7 Objectives and Goals .......................................................................................................................... 7 Action Programs .................................................................................................................................. 8 Works Cited ………………………...………………………………………………………………………………….. 8 Management Summary Winter Park Memorial Hospital Dr. P. Phillips Baby Place is a state of the art obstetrics hospital. The difference in our service from other obstetric hospitals in the area is that The Baby Place provides five-star amenities as well as 24/7 concierge service. This service allows patients to feel comforted and well taken care of. Not only does Winter Park Memorial hospital provide five-star amenities, it also provides exceptional expertise. “Winter Park Memorial Hospital houses a Level II Neonatal Intensive Care Unit (NICU) with comprehensive neonatal and......

Words: 995 - Pages: 4

Case Study 6 Columbia Memorial Hospital

...Managerial Accounting #1 With no change in volume (utilization), is the clinic projected to make a profit? Currently the clinic sees about 45 patients per day and they have capacity to handle 85. If they continue how they are operating the clinic is looking at a loss of $3,173. At this rate the clinic will not be able to make a profit in spite of inflation over the next couple years. #2 How many additional daily visits must be generated to break even? There is an average of 1,230 visits a month, bringing in 47,037 a month in net revenue. Figure one tells us that in order to breakeven without the new marketing program the clinic will need to see 22 more patients per day, which brings it to a grand total of 67 patients that will need to be seen per day. #3 Answer the same question as in question 2, but this time assume the marketing program has been implemented. According to figure 2 in order to breakeven with the new marketing plan they would need to see 28 patients per day which is 6 more than without the marketing plan. The total of patients needing to be seen per day with this marketing plan is 73. #4 How many incremental daily visits would it take to pay for the marketing program, irrespective of overall clinic profitability? Now according to figure 3 in order for the clinic to pay for the marketing plan it would need to have 22 consecutive days in operation seeing 73 patients per day. #5 Which items in the statement were easiest to project and why? Which......

Words: 1000 - Pages: 4

Peel Memorial Hospital

...improvement plans to become better at their current job. The success of the company depends on it. With that being said, Peel Memorial Hospital developed a plan that optimized the organization so that it could meet its desired performance goals.   Performance Management Performance management causes flaws in any company, with employees and managers constantly complaining about the ineffectiveness of these systems they miraculous improve company and employee performance. On the other hand, most employees and management feel that performance management systems are poorly designed and lack the ability to establish clear performance goals. In addition, mangers feel that performance systems generate honest feedback. What this means is that most managers and employees feel like they are an evil part of working that should be eliminated rather than a critical procedure that help achieve individual and organizational success. Furthermore, the overall purpose for a performance management system is to consider organizational needs, culture and how integrating the system ties into the organization’s strategy and goals. With that being said, this paper presents a synopsis of Peel Memorial Hospital and their issues with implementing the Balanced Scorecard to achieve organizational success. Brief Case Overview Harber (2008) stated that in 1995 Peel Memorial Hospital (PMH), a healthcare facility, “tried to be all things to all people” (p. 59). The company wanted to improve......

Words: 1224 - Pages: 5

Attica Memorial Hospital

...CASE #6: Attica Memorial Hospital, The Ingelson Burn Center Attica Memorial Hospital (AMH) is a non-profit acute care facility located in Norton County. The organization purchased and absorbed its competitor, Delphi Hospital in 2001, which also enabled it to acquire the reputable and well-known Ingelson Burn Center. Assumptions We assume that all financial data provided in the case are accurate, and that the Ingelson Burn Center is still known as the “Center for Excellence”. We also assume that recommendations have not already been implemented. Also, we are assuming that the current date is August 2, 2001, implying that the deadline for SCS Certification has not passed (October 31, 2001). Situation Assessment Strengths: The strengths at Attica Memorial Hospital include extensive staff training in the most current treatment protocols, not merely basic burn care. The hospital also employs a reputable practitioner named Dr. Ingelson. Interviews from fire departments support the notion that the Dr. Ingelson burn center is respected and preferred over other burn centers. Lastly, Attica Memorial hospital provides educational services to schools, insurance carriers, ED personnel, and pre-hospital personnel. This demonstrates the organization’s dedication to community outreach. Weaknesses: Some of Attica Memorial’s weaknesses include tension amongst staff regarding burn center, which causes an overall lack of support among physicians. In addition, this organization......

Words: 1685 - Pages: 7

Marketing Audit: Peace Memorial Hospital

...contents page Case Study: Peace Memorial Hospital: Downtown health Clinic …….………………. 3 Executive Summary …………………………………………………………………….. 3 Environmental Aspects …………………………………………………………….. 5 Demographics …………………………………………………………………….. 5 Politics …………………………………………………………………….. 7 Competition …………………………………………………………………….. 8 Marketing …………………………………………………………………………….. 9 Objectives …………………………………………………………………….. 9 Strategies …………………………………………………………………….. 10 Tactics …………………………………………………………………………….. 10 Four Ps …………………….…………………………………………….. 11 Product …………………………………………………………… 11 Price …………………………………………………………………… 11 Place …………………………………………………………………… 11 Promotion …………………………………………………………… 12 Marketing Information Systems ……………………………………………. 12 Conclusion …………………………………………………………………………….. 13 References …………………………………………………………………………….. 14 Marketing Audit Case Study: Peace Memorial Hospital: Downtown health Clinic Peace Memorial Hospital (PMH) is one of six independent, nonprofit, general hospitals within its city limits. The hospital has the highest occupancy rates in the city,......

Words: 3487 - Pages: 14

Barclay Memorial Hospital: District Hospital

...Barclay Memorial Hospital (BMH) has served its community since 1947 offering the best in health care and gaining the trust of the citizens in the community. A district board was set up to govern the hospital and direct it in a way that would allow the hospital to achieve their goals by bringing quality health care to the neighborhood. The district board was made up of five members who were elected by residents in the district to serve 3-year terms. Around 10 years ago, the board and the CEO decided that the best course of action for the hospital in order to remain competitive was to join a medical group, Valley Physician Group. This made BMH a private, not-for-profit hospital. However, the physician-hospital organization eventually dissolved after financial failure and the hospital went back to being a district ownership. After this failure, the board decided to hire a new CEO, Gregory Schilling. Schilling brought the hospital back to financial viability and improved morale for the hospital with the company's success. However, this success was short-lived and Schilling’s relationship with the board started to unravel because of it. Schilling had a history of working for a not-for-profit hospital and has spent 45 years as a hospital administrator. Schilling also has a history of severe back problems that has started to restrict his ability to work. Schilling did a lot to improve the hospitals business. He increased the morale of employers, made renovations to update the......

Words: 1580 - Pages: 7

Memorial Hospital

...Memorial Hospital Denise Bell Instructor Ashford University Memorial Hospital Janice Frye along with her staff at Memorial Hospital, are looking for a ways to improve the quality of care to their patients. Memorial Hospital is a privately owned 600-bed facility, which provides a broad range of healthcare services, including complete laboratory and X-ray facilities, an emergency room, an intensive care unit, a cardiac care unit, and a psychiatric ward (Vondermbse). It is substantial for hospitals to take care of their patients, but Memorial Hospital not only wants to take care of their patients, they want it to be affordable and a nice friendly atmosphere for their patients. Janice and her staff are not looking to expand the hospital, because there is a nearby hospital that offers specialty services and it also affiliated with the local School of Medicine. They only want to make sure that their patients are being given the best treatments and are not just getting a friendly face, regardless of their income status. In order to reach their goal, Janice and her team must reach out to the most important people in the business, the patients. A hospital can measure quality, by how the patients are cared for, how long patients have to wait for service, and how well the staff treats the patients. Operations Management states “that there are five dimensions of quality that are used by customers to judge service quality, and they are: reliability, responsiveness,......

Words: 1111 - Pages: 5

Tulsa Memorial Hospital. Break-Even Analysis

...Tulsa Memorial Hospital (TMH) Break-Even Analysis (Case 6). Brandon Harley, TMH's CEO is concerned about the Urgent Care Center's overall financial soundness. He has 3 options to consider one of them (1) continue to operate as it; (2) close it down; or (3) continue to operate, accompanied by the expanded marketing effort. Positive considerations: 1- TMH has reputation for quality care 2- Urgent care Centers are increasingly visited by patients who need immediate treatment for illness “Wall Street Journal”. 3- One competing center had recently closed. 4- Capacity to see 85 patients/day 5- The center does not have seasonal utilization pattern 6- Expanded marketing program requires no capital investment. Negative Considerations: 1- The center has been staffed at the bare minimum, so any increase in the number of patient visits would require immediate administrative and medical staffing increases. 2- The center on long term lease, with cancellation penalty of 3 months’ rent or $37,500. 3- TMH's major competitor had just bought the city's largest primary care practice, and planning for more acquisitions. 4- Marketing expansion requires marketing assistant and advertising coasts. To consider these positive and negative points especially the closure of competing center and the new acquisition plan by the major competitor, total average that includes 2013 and Jan/Feb 2014 will be used in this analysis to answer the following questions: ...

Words: 616 - Pages: 3

Columbia Memorial Hospital Case Study

...Columbia Memorial Hospital Case Study 1. Using the historical data as a guide (Exhibit 6.1), construct a pro forma (forecasted) profit and loss statement for the clinic's average month for all of 2010 assuming the status quo. With no change in volume (utilization), is the clinic projected to make a profit? With no change in volume of 45 patient visits per day, the clinic is not projected to make a profit. 45 patient visits per day x 30 days in a month = 1,350 visits per month x 12 month = 16,200 visits per year Using the average data given (2010) of 45 patients per day, average $130 revenue per patient, and a cost of $3.50 per patient. The Forecasted P&L Statement is shown below. Forecasted Columbia Walk in Clinic P&L Statement (For Year 2010) Total Revenues ($44.157 x 16,200) $715,356 Total Variable Costs ($3.50 x 16,200) $56,700 Total Contribution Margin ($40.657 x 16,200) $658,656 Fixed Costs $696,708 Profit $(38,052) Columbia Walk in Clinic Estimated Financial Data (For Year 2010) Number of Visits 16,200 Net Revenue $658,656 Net Revenue Per Visit $40.66 Salaries and Wages $162,504 Physician Fees $216,000 Malpractice Insurance $38,580 Travel and Education $7,224 General Insurance $10,116 Subscriptions $0 Electricity $12,924 Water $1,668 Equipment Rental $1,260 Building Lease $150,000 Other Operating Expenses $96,456 Total Operating Expenses $696,708 Net......

Words: 656 - Pages: 3

Tulsa Memorial Hospital Break-Even Analysis

...TULSA MEMORIAL HOSPITAL Break-Even Analysis 1. Using the historical data as a guide, construct a pro forma (forecasted) profit and loss statement for the clinic's average month for all of 2014 assuming the status quo. With no change in volume (utilization), is the clinic projected to make a profit? -No, the clinic is projected to experience a loss. Pro Forma Average Month: |   |   |   |   |   |   |   | Number of visits |   | 1,350 |   |   |   |   | Net revenue |   | $54,888 |   |   |   |   | Salaries and wages |   | $13,542 | Physicians fees |   | 18,000 | Malpractice insurance |   | 3,215 | Travel and education |   | 602 | General insurance |   | 843 | Subscriptions |   | 0 | Electricity |   |   | 1,077 | Water |   |   | 139 | Equipment rental |   | 105 | Building lease |   | 12,500 | Other operating expenses | 8,038 | Total operating expenses | $58,059 |   |   |   |   | Net profit (loss) |   | ($3,171) |   |   |   |   | Gross margin (%) |   | -5.8% | 2. Now consider the clinic's situation without the new marketing program. How many additional daily visits must be generated to break even? Construct a breakeven graph that can be included in your report. The clinic must generate 20 additional daily visits to break even. 3. Repeat the Question 2 analysis, but now assume that the new marketing program is implemented. The clinic must generate 28 additional daily visits to break even 4. Now focus......

Words: 925 - Pages: 4

Breakeven Analysis

...Taco Restaurant Breakeven Analysis November 29, 2015 _ Scenario The problem states that the average order price at a local taco restaurant in Lynchburg, VA is $7.00 per order. The variable costs including food and paper products are $3.00 per order. The fixed costs are $5,600 a month (building lease, electricity, and labor). Breakeven Formula Analysis At this rate, the restaurant requires at least 1,400 orders a month to reach the breakeven point. However, as the problem states, the restaurant is barely making 1,000 orders per month. This means that the restaurant may not last long at this rate and measures must be taken to increase sales and decrease expenses. _ Marketing Plan The obvious solution is to increase the orders per month from 1,000 to 1,400. However, because of factors such as competition, this may be difficult to do in a short period of time. I suggest increasing the average order price to $8 by slightly raising prices, and offering customers discounts for purchasing more food with a lower variable cost (i.e nachos, fries, or anything that doesn't cost much to make). A pricing constraint to consider would be the price that customers are willing to pay for your food may not be extremely high depending on the quality of the restaurant. Then, it would be advantageous to decrease the variable costs to $2.50 by purchasing certain food items in bulk if possible. Next, it......

Words: 318 - Pages: 2

Breakeven Analysis Casestudy

...3/26/09 Case 4 Better Care Clinic (Breakeven Analysis) Fairbanks Memorial Hospital, an acute care hospital with 300 beds and 160 staff physicians, is one of 75 hospitals owned and operated by Health Services of America, a for-profit, publicly owned company. Although there are two other acute care hospitals serving the same general population, Fairbanks historically has been highly profitable because of its well-appointed facilities, fine medical staff, and reputation for quality care. In addition to inpatient services, Fairbanks operates an emergency room within the hospital complex and a stand-alone walk-in clinic, the Better Care Clinic, located about two miles from the hospital. Todd Greene, Fairbanks’s chief executive officer (CEO), is concerned about Better Care Clinic’s financial performance. About ten years ago, all three area hospitals jumped onto the walk-in-clinic bandwagon, and within a short time, there were five such clinics scattered around the city. Now, only three are left, and none of them appears to be a big money maker. Todd wonders whether Fairbanks should continue to operate its clinic or close it down. The clinic is currently handling a patient load of 45 visits per day, but it has the physical capacity to handle more visits—up to 60 per day. Todd has asked Jane Adams, Fairbanks’s chief financial officer, to look into the whole matter of the walk-in clinic. In their meeting, Todd stated that he visualizes two potential outcomes...

Words: 1084 - Pages: 5