INTRODUCTION
Organizations periodically seek to establish a new line of business or improve performance of an existing one. You should understand the marketplace as well as the internal environment, and how both may impact the ultimate success of the organization’s service line. Using the “Service Line Development Case Study,” you will assess the viability of developing one of the following new service lines: Orthopedic center Cardiovascular center Cancer centerYou will assume the role of a CEO in a healthcare facility. The CEO is tasked with developing a new service line. You will present the findings to the board of directors for buy-in and approval.REQUIREMENTSYour submission must be your original work. No more than a combined total of 30% of the submission and no more than a 10% match to any one individual source can be directly quoted or closely paraphrased from sources, even if cited correctly. The originality report that is provided when you submit your task can be used as a guide.You must use the rubric to direct the creation of your submission because it provides detailed criteria that will be used to evaluate your work. Each requirement below may be evaluated by more than one rubric aspect. The rubric aspect titles may contain hyperlinks to relevant portions of the course.A. Determine the feasibility of one of the proposed service lines in the attached “Service Line Development Case Study” by doing the following:1. Evaluate the demand for the new service line in the market area defined in the case study.2. Analyze how current international healthcare trends could be incorporated into the development of the new service line.3. Discuss the existing programs and service lines in the healthcare organization that could serve as complementary components of the new service line.4. Analyze the financial and operating data to determine the financial feasibility of instituting the new service line.5. Discuss how to target and market to physicians to secure referral services.B. Create a multimedia presentation (e.g., PowerPoint, Keynote) in which you recommend the next steps to develop and implement the selected service line.C. Acknowledge sources, using in-text citations and references, for content that is quoted, paraphrased, or summarized.D. Demonstrate professional communication in the content and presentation of your submission. Mike Corrigan, CFO
Morgan Reece, CEO
Five-Year Financial Estimates Presentations
Morgan—
Following are estimates of the financial information you requested in order to complete your board presentations on
development of cancer, orthopedic, and cardiology programs. Obviously, no one has a crystal ball, but I think these are reasonable
given what we believe will happen with reimbursement trends, improved operating efficiency, increased volume, payer mix, etc.
Cancer—Five-Year Projection
1) gross charges per oncology discharge—$70,000
2) gross charges per radiation oncology treatment—$450
3) gross charges per chemo treatment—$600
4) collections—35%
5) ratio of cost to charges—30%
Orthopedics— Five-Year Projection
1) gross charges per orthopedic surgical case—$25,000
2) gross charges per physical therapy treatment—$275
3) collections—35%
4) ratio of cost to charges—31%
Mike
Cardiology— Five-Year Projection
1) gross charges per diagnostic cath—$30,000
2) gross charges per peripheral vascular procedure—$25,000
3) collections—35%
4) ratio of cost to charges—30%
Total Hospital— Five-Year Projection
1) gross charges per hospital discharge—$80,000
2) overall collections—35%
3) overall ratio of cost to charges—30%
Dr. David Joint, MD
Morgan Reece, CEO
Branch Orthopedic Office
Morgan—
My group will open its branch office near the hospital in approximately three months. Five of our surgeons are applying for privileges
at Trinity and would like to use the facility for some of their patients. I assume that you will be working with the board to get the go
ahead for development of orthopedics as an area of focus for the hospital. The community really needs more capacity, and I think we
could develop a truly exceptional program. Look forward to hearing more about this at the next board meeting.
David
Fred Brian, MD
Morgan Reece, CEO
Branch Orthopedic Office
Morgan—
Just wanted you and the hospital team to know that our group has secured office space to open a branch orthopedic practice near
adjacent to the Trinity campus. We anticipate having everything ready to go in 4-6 months. Six of our physicians have begun the
process of getting hospital privileges, so it won’t be long until we will want to admit patients to your facility. I would encourage you
to gain approval from the board to move forward with development of a true orthopedic program. Much opportunity exists for us to
work together to provide some additional services for patients that are currently not available. For example, I hope to work with your
director of patient care to develop pre- and post-procedural care maps for total joint patients. Let me know if I can be of assistance
as you work through issues with the start-up of a new service.
Fred
Malcolm Stile, MD
Morgan Reece, CEO
Cath Lab/Peripheral Vascular Service
Morgan—
Wanted to confirm that my practice group is looking forward to working with you to develop a cardiovascular program at Trinity. As
you know, the community is in real need of additional capacity to diagnose and treat cardiovascular illness. All six members of my
group are planning to do work at the hospital once necessary resources are in place. With availability of a state-of-the-art cath lab,
many patients could be diagnosed and treated at Trinity who now have to go to other hospitals in the community—particularly those
with peripheral vascular disease. Most of these patients do not require cardiac surgical back-up making Trinity an ideal choice for
such a program. I also think that we have an opportunity to develop outstanding screening and educational outreach programs
targeting segments of the population at high risk for cardiovascular disease. Also think it might be worth pursuing a link with
Academic Medical Center for cardiac services. Some of their clinical trials might be appropriate for patients at Trinity. Look forward
to working with you and the hospital staff.
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