Pate Memorial Hospital Case

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.

Pate Memorial Hospital Case Analysis

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.

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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: “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.