Perpetual Mercy Hospital Case

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Perpetual Mercy Hospital Case Situation Analysis
The hospital industry has seen a dramatic change since the 1960s. Millions of dollars were poured into the industry causing a huge boom in independent hospitals and respectively a large boom in insurance coverage. Eventually the government had to step back in and reassess their role in health care. Here is what you need to know about the industry. Types of Health Care Programs: - HMOs are Health Maintenance Organizations that provide health care for a fixed monthly fee. - PPOs are Preferred Provider Organizations are usually offered through large employers where patients can more options and not be as restricted as an HMO. Ambulatory health care services are those that are used on an
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•Brand the company to the thousands of office workers in a 5 block radius which is increasing 7% annually do to construction and building renovation. •Allows hours of operation to expand to 7 AM to 7 PM. •Provides grounds to schedule an additional 65 employee exams per month •Provides overlap to decrease wait time during lunch time hours.

Add physician and increase hours

•Increases personnel cost by 33%. •Doubles physician expense for a total of $288,888 (with 5% increase)

In order for the Downtown Health Clinic to maintain there financial strength in the hospital market I think there are a few alternatives which will give them a clear competitive advantage. • Adding a gynecological physician is must add alternative. With 70 percent of their client base being female and one half inquiring about gynecological services their contribution margin will increase thus exceeding last years revenues. Adding a physician, while it does increase variable cost, is another option that needs to be strongly taken into consideration. It will allow the DHC to stay boost from 9 to 12 hour days, allowing the DHC to add revenues by $129,720 just by simply providing grounds for an additional 65 employer physical exams per month. In addition it will also cut down on wait times, due to having 2 physicians with

overlapping lunch time hours patients will not have to wait as long during the busiest time of operation. • Since recommendations

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