Assessing Organizational Viability

Sample Solution

Proposal to the Hospital CEO, Administrator, and CMO

Subject: OB/GYN Unit Performance and Recommendations

Date: October 12, 2023

From: [Your Name], CFO

Introduction

As part of the strategic management team, I have been tasked with reviewing various facility units and making recommendations to avoid closure. Based on my review, I have determined that the OB/GYN unit is underperforming in several key financial areas.

Full Answer Section

Potential Challenges

There are a number of potential challenges contributing to the OB/GYN unit's underperformance, including:

• State's decision to opt-out of Medicaid expansion: This decision has left many low-income women without access to affordable healthcare, which can lead to decreased utilization of OB/GYN services.
• Aging population: An aging population requires more expensive care, which can put a strain on the financial resources of a rural hospital.
• Changes in reimbursement from Medicare: Medicare reimbursement rates for OB/GYN services have been declining in recent years, which can make it difficult for rural hospitals to remain profitable.
• Competition from other healthcare providers: Rural hospitals are facing increasing competition from other healthcare providers, such as urban hospitals and ambulatory surgery centers.

Potential Trends

There are a number of potential trends in the community that could impact health consumer utilization patterns, including:

• Increasing access to telehealth: Telehealth is becoming increasingly popular, and it could provide an alternative for women who live in rural areas and have difficulty accessing OB/GYN services in person.
• Rising healthcare costs: The rising cost of healthcare could lead to some women delaying or even foregoing OB/GYN services.
• Changing demographics: The demographics of the community are changing, and this could impact the demand for OB/GYN services. For example, if the community is becoming younger, there may be a decrease in the demand for OB/GYN services.

Potential Benefits of Reorganization

A reorganization of the OB/GYN unit could have a number of potential benefits, including:

• Improved efficiency: A reorganization could help to improve the efficiency of the unit by streamlining processes and reducing duplication of effort.
• Reduced costs: A reorganization could help to reduce the costs of the unit by consolidating resources and eliminating unnecessary expenses.
• Improved patient care: A reorganization could help to improve patient care by ensuring that patients have access to the right services at the right time.
• Increased revenue: A reorganization could help to increase the revenue of the unit by expanding service offerings and attracting new patients.

Course of Action

I recommend the following course of action to improve the financial performance of the OB/GYN unit:

• Reorganize the unit to improve efficiency and reduce costs. This could involve consolidating resources, eliminating unnecessary expenses, and streamlining processes.
• Expand service offerings to attract new patients and increase revenue. This could involve offering new services, such as midwife services, or expanding existing services, such as prenatal care and postpartum care.
• Partner with other healthcare providers to reduce costs and improve access to care. For example, the hospital could partner with a local women's health clinic to provide OB/GYN services to women who are uninsured or underinsured.

Implications

The recommended course of action could have a number of implications for patients, providers, and investors:

• Patients: Patients could benefit from improved access to care and a more efficient and cost-effective delivery of care.
• Providers: Providers could benefit from a more supportive work environment and access to the resources they need to provide quality care.
• Investors: Investors could benefit from a more profitable OB/GYN unit and a more sustainable rural hospital.

Conclusion

I believe that the recommended course of action is the best way to improve the financial performance of the OB/GYN unit and secure the long-term viability of the hospital. I urge you to adopt these recommendations.

Additional Considerations

In addition to the recommendations outlined above, there are a number of other things that the hospital could do to improve the financial performance of the OB/GYN unit, such as:

• Market the unit to potential patients. The hospital could market the unit to potential patients by highlighting its strengths, such as its experienced providers and its commitment to quality care.
• Offer financial assistance to patients who need it. The hospital could offer financial assistance to patients who need it to help them afford OB/GYN services.
• Advocate for policies that support rural healthcare. The hospital could advocate for policies that support rural healthcare, such as Medicaid expansion and fair Medicare reimbursement rates.