Assessing Organizational Viability

Homework Answsers / Business & Finance / Management

Scenario

You are the CFO of a rural hospital. During a recent review of the organization’s financial status, the hospital was deemed “at risk” for closure. Several factors contribute to the at-risk designation, including the state’s decision to opt-out of the Medicaid expansion program, the aging population which requires more expensive care, and the changes in reimbursement from Medicare. These challenges have resulted in rural facility closures across the country. As part of the strategic management team, you are charged with reviewing various facility units and making recommendations that may avoid closure. You determine that based on the profitability reports, the OB/GYN unit of the facility is underperforming in several key financial areas.

Instructions – remember you are researching for a rural hospital that has opted out of Medicaid expansion in the states (SOME EXAMPLES BELOW)

In a written proposal to the hospital CEO, Administrator, and CMO, discuss the following:

· Identify potential challenges related to the OB/GYN unit’s performance.

· Explain the specific problems affecting THIS OB/GYN UNIT

· Examples might include:

· Low patient volume

· High cost of services

· Staffing shortages

· Declining reimbursement

· Describe why these issue hurt this specific units financial performance

· Explain potential trends in the community impacting health consumer utilization patterns.

· Describe what is happening in the local community that may affect how people use OB/GYN services.

· Examples:

· Aging population

· Fewer childbirths

· More patients without insurance

· Transportation barriers

· Explain how these trends affect this (specific) unit’s revenue and demand.

· Explain the potential benefits of reorganization within the unit and how reorganization could improve its financial status.

· Describe why reorganizing the OB/GYN department might help the hospital financially.

· You can discuss things such as:

· Reducing costs

· Combining services

· Expanding or modifying service lines

· Improving efficiency

· Explain how these changes could improve financial performance for this (specific) facility.

· Recommend a course of action and the implications that those actions will have for patients, providers, and investors (i.e., how might closure affect the community or how might new service offerings, such as midwife services, improve profitability).

· Options may include:

· Keeping the unit with changes

· Adding new services (like midwives or telehealth)

· Downsizing

· Closing the unit

· Explain how your recommendation would impact:

· Patients (access to care, travel distance, quality of service)

· Providers(workload, staffing need)

· Investors/Hospital leadership (financial stability, community reputation)

Examples of Specific Hospital Closures relatedto OB/GYN services

· https://www.nbcnews.com/news/us-news/rural-hospital-closed-its-obstetrics-unit-hitting-most-vulnerable-hardest-n1284254

· https://www.georgiahealthnews.com/2020/03/rural-hospitals-crisis-top/