Simulation Review Paper on Elijah Heart Center

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Simulation Review Paper
Talitha Taft
May 16, 2011
Todd Brown

Simulation Review Paper
Elijah Heart Center (EHC), is a healthcare organization focused on cardiac health. The facility is equipped to handle the full spectrum of cardiovascular services for physicians and patients. The hospital also provides outpatient services for less invasive procedures and clinical care. Although the organization’s patient volume is stable and increasing in volume rapidly, there is a deficit in regards to profitability. As the senior financial consultant, I will present plans for short term and long term goals if needed. I will also recommend specific measures to modernize the hospital and provide specific plans for hospital expansion. Financial Portfolio

Elijah Heart Center has managed to stay in operation due to excellent patient services. In the process of great patient care, poor financial decisions have been made in the past that now hinder the profitable spectrum of the organization. Research data revealed that issues that have affected this organization’s financial budget. The data revealed that (EHC) gave large discounts to manage care companies. The nursing staff was affected because higher wages were paid to outside agencies who supplied contract nurses. Of course when dealing with government health funded insurance carriers such as Medicare, the reimbursement levels are well below budget standards. Insurance rates are not current and based on past medical costs which stunts the financial growth of the hospital. Liabilities have increased and ½ of the liabilities are related to accounts payable. The hospital equipment will need replacement soon due to extensive usage. Another issue is the constant placement of unused equipment in patient’s rooms. This causes conflict because if the equipment is placed in the patient’s room, it is considered is supposed to be charged to the patient. Phase 1 Capital Shortage

Bridging a working capital shortage is one of the strategies that can help increase the hospital’s revenue if a true concrete plan can be formulated. Once all data was received, suggestion from the Executive Board was taken into consideration before any final decision was to be made. The main focus to be considered while bringing forth a strategic plan, is to understand the healthcare business as a whole. According to Baker and Baker (2009), The health care industry is a service industry. It may have inventories of medical supplies and drugs, but those inventories are necessary to service delivery, not manufacturing functions. With this information in mind, two specific cost cutting options were chosen geared toward staffing and patient care. The first option addressed was to decrease the staff hired from outside sources. Nursing and other employees who were hired via contracts worked for higher rates of pay. This rate is normally double the amount of the staff employee. Depending on the specific position and pay grade, large quantities of contract workers drains the current financial budget and reserves. The goal being strived for is the ability to take money being paid out to contract workers, and use it to hire staff at a reasonable rage of hire. This leads into the second option that was chosen. Changing the skill mix is a great strategy to help retain employees, add to their skills to make them more of an asset, and increase the employee morale. It is known that without contract staff to supplement nursing the strain of patient care would increase. That is why it is necessary to utilize the staff already in house that known the routine to be open to learning more skills. The asset to this strategy is that the nurses who are hired for full time status will enter an organization that promotes advanced clinical learning. The projected outcome of this plan is a net savings of at least 90% the first year, and an increase of financial savings by the second net year. Loan Options

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