Critical Thinking Case Study

Running head: CRITICAL THINKING CASE STUDY

Critical Thinking Case Study

University of Phoenix Online

Critical Thinking and Computer Logic CSS 330

May 28, 2006

Executive Summary

Faith Community Hospital is currently at risk of legal action for not complying with state and federal healthcare provider mandates. At the same time the hospital is also suffering financial problems that will severely impact operational capability if left unchecked. The following issues are at the forefront of the problems:

1. Staff personnel are providing and not providing services based upon their religious beliefs.

2. Doctors are interpreting the Hippocratic oath as they see fit.

3. Insurance premiums and associated costs have increased from $217 to $240 per patient per day.

4. The hospital has seen a 7% decrease in patient population

The following proposed solutions would greatly reduce our exposure to liability and increase our revenue:

1. Mandatory semi-annual legal and ethical training for all staff members.

2. Revision of all documentation related to patient rights and waivers by the legal department.

3. Streamline our insurance reimbursement system.

4. Increased advertising budget.

The following report details each one of these problems and others and takes a more in-depth look at the possible solutions to each one of the critical issues.

Critical Thinking Case Study

Faith Community Hospital’s mission statement is as follows: “With the foundation and commitment of our spiritual heritage and values, our mission is to promote the heath and well-being of the people in the communities we serve through a comprehensive continuum of services provided in collaboration with the partners who share the same vision and values.” The problem is that Faith Community Hospital staff members are not living by this mission statement. The hospital is currently facing many serious problems and unless immediate action is taken it is almost certain that the hospital will come under legal attack for several reasons and suffer severe financial hardships.

Although Faith Community Hospital is a not-for-profit organization, the fact remains that we run a business that has substantial costs associated with it including payroll, insurance premiums, hospital maintenance, and utilities. We have seen a 7% decrease in patient population. At the same time roughly 28% of our costs are fixed costs. Fixed costs are those costs that do not fluctuate based on the current patient count. If the hospital maintains its current number of patients at 7,863 patients and 39,866 patient days, the hospital will have to reduce fixed costs by 15% just to break even. One year ago the hospital’s costs were $217.00 per patient per day. The latest figures from the accounting department show that figure has increased to $240.00. The bottom line is that either the hospital has to reduce costs or increase patient count to remain profitable. Attempting to cut 15% of our fixed costs could seriously impact our ability to provide quality healthcare for our patients. The negative publicity in the media and within the community could have a “snowball” effect and end up hurting us even more in the long run.

The first step in attempting to resolve the financial issues should be to review all current fixed costs and determine whether or not there are any potential cost saving measures that can be implemented. This includes measures such as reducing waste, streamlining operations, and other simple cost cutting techniques. All contracts with vendors, suppliers, and service providers must be analyzed and revised if possible or eliminated in the case of redundancy. Faith Community media relations department will initiate research on the most effective marketing campaign techniques that will generate revenue for the hospital. Although marketing is not cheap, with an effective targeted marketing campaign, it is possible that the hospital could see a sharp increase in patient population. The next step will be to analyze how the hospital handles insurance claims and determine whether or not a more effective, streamline process can be developed and implemented. The hospital needs to dedicate