Pate Memorial Hospital Performance

Topics: Economics

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.

Hospital Essay

* Increasingly depend on inner-city residents who have a higher median age and higher incidence of Medicare coverage.

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* 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|

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Pate Memorial Hospital Performance. (2019, Dec 05). Retrieved from

Pate Memorial Hospital Performance
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