Reference no: EM133563279

Case Study: You are a successful serial entrepreneur who got your start in the dotcom boom in the nineties. Right out of college (CPA - MBA combined program), you were employee number 15 in an online search engine firm, that was eventually bought out by Google. You have made three subsequent successful and profitable exits, primarily serving as the CFO in these corporations. Three years ago, after the death of your best friend from an opioid overdose, you decided to form a venture capital firm that invests in addiction treatment services.

One of your investments is Thrive Addiction Treatment Centers, Inc, a multi-location outpatient medical group that now has 8 locations in two contiguous states. Your co-founder is a well-respected national clinical expert in Addiction Medicine, and together, you have successfully launched and operated a treatment model for the past three years, that has just recently begun to turn a profit. You believe that now is the time to begin rapidly scaling to get treatment to as many people with addiction as possible. However, your co-founder worries that rapid growth will compromise quality of care.

Before scaling, your co-founder wants to purchase an electronic medical record company that specializes in addiction treatment to ensure that providers can communicate efficiently across the enterprise. You would prefer to seek financing to develop an EMR solution in-house.

Question 1: Which of these is an investment decision and which is a financing decision?
You reach a compromise by purchasing upgraded hardware and servers for all 8 locations, and by onboarding a Chief Technology Officer to prepare for the expansion, including providing an analysis of whether it is better to "buy or build" an effective electronic medical record.

Question 2: Are the hardware and servers considered real assets or financial assets?
Maximizing market value, is of course, the natural financial goal of all corporations. However, in healthcare, putting profits ahead of patients can create interesting ethical dilemmas. On the other hand, healthcare companies need to have a certain margin to continue to serve patients.

Question 3: How would you advise the C-suite leaders of Thrive Addiction Treatment Centers, Inc. to navigate the tricky waters of balancing growth with clinical quality?