Reference no: EM132927521
Please answer the questions at the end in paragraph form
You are the regional vice president of a midsize healthcare system in West Hadley. A wealthy philanthropist has served with you for years on the system's board. Recently, his youngest brother in Little Barrington developed kidney problems and required dialysis. However, the community, with only 40,000 residents, lacks dialysis services. This shortfall necessitated a 50-mile drive, three times a week, to the nearest dialysis center. As the travel time and four hours of treatment at the center took up three full days a week, this scarcity was a significant burden on this family.
The philanthropist wanted to improve the care and met with Little Barrington's mayor and the CEO of a hospital in your system. During the meeting, he announced that he was willing to give $8 million to establish a dialysis center in the community. The mayor was ecstatic, while the CEO was publicly appreciative but privately a bit apprehensive. After the meeting, the mayor issued a press release praising the forthcoming donation and the CEO immediately called you to discuss the matter.
The healthcare system had struggled with this issue in the past. Donors had offered to give a large financial gift for a service (an intensive care unit, pediatric wing, or other expensive item). These individuals were generally highly aligned with the health system and frequently prominent in the community. In addition, the donor was almost always highly committed to her pet cause. Frequently, however, community volumes made the service unsustainable. On top of this, the volumes at the new services would sometimes cannibalize the volumes at a larger site within the system, making the new service even less efficient systemwide. Quality of care could also be affected by the halved volumes after the loss of critical mass and support services needed round the clock and the difficulty of hiring people into specialty roles without adequate volume to keep them busy.
You discuss the situation with the CEO, recognizing the aforementioned issues and acknowledging that the $8 million that was offered was enough capital to begin the service but would not provide funds for continuing operation costs. The state currently has one dialysis center for every 76,000 residents, few being profitable. Given this, it is probable that the proposed dialysis center could run at a loss. The CEO would like direction from you.
Questions
- Who are the key stakeholders in this case? Who would be the most influential and engaged?
- If you were the VP, what type of analysis would you ask the CEO (or his/your staff) to complete prior to making a decision? What are the key decision factors?
- How could/should the mission of the health system and individual hospital be tied to your decision?
- What alternatives to a fixed dialysis center might you suggest to the philanthropist?