SWOT Analysis of CMC Presentation

SWOT Analysis of CMC Presentation

HSM 331 Norfolk State University SWOT Analysis of CMC Presentation

Excerpt of Case Study:  Coastal Medical Center

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See (Harrison, 2016, pp 1-28)

Introduction

Coastal Medical Center (CMC) is a licensed, 450-bed regional referral hospital providing a full range of services.  The primary service area is a coastal city and three counties, with a total population greater than 995,000, located in the Sunbelt.  This tricounty area has had one of the fastest population growth rates in the country for the past five years.  According to the local health planning council, the tricounty population is projected to increase by 15 percent from 2015 to 2020.  Appendix A, at the end of the case study (in the textbook), provides detailed population statistics for the city and tricounty area.

The population growth rate for households (families) has been 1 to 2 percentage points higher than the overall population growth.  The growth rate of the population under age 44 shows a young and growing community.  Per capita (i.e., per person) income in the tricounty area is high and increasing.  As the population of the tricounty area increases, the need for healthcare services is anticipated to increase.  The area’s economy is largely supported by manufacturing, with service companies and agriculture accounting for another 35 percent.  Unemployment is typically 6 percent.  The overall poverty rate is 12.4 percent.  A recent study revealed that 40,000 city residents are below 125 percent of the established federal poverty level.

Healthcare Costs

            Healthcare costs in the region are high in comparison to healthcare costs in most other areas in the state.  In response to what they feel are excessively high healthcare costs, county businesses recently formed a business coalition, hired a full-time executive, and publicly stated their intent to achieve reduction in healthcare costs.  The local press has expressed its concern about the high cost of healthcare in the local community and consistently bashes the area’s hospitals and physicians.  The coalition refused to allow the three major medical centers in the area to join, despite the fact that each is a major employer.

Highlights of Coastal Medical Center

As a referral center, CMC offers almost every level of care, including a number of tertiary care services, with the exception of neonatology and severe burn-unit services. Many of its patients require high-intensity services.  For this reason, its costs are the second highest in the entire state.  The average length of stay of a patient at CMC is 9.2 days, compared to a statewide average of 6.4 days at hospitals of similar size and services.  This difference is probably attributable to the intensity of services CMC offers.  CMC’s expenses per patient day are also the highest in the state, with the exception of two large university-affiliated teaching medical centers.  Its FTEs per adjusted occupied bed (7.5), paid hours per adjusted patient day (35.2), and paid hours per patient discharge (238.5) all greatly exceed those of competitors and the norms of comparable facilities.  CMC is currently authorized for 2,240 positions but actually employs 2,259 FTEs.  Salary expenses per adjusted discharge and adjusted patient day are $2,760 and $491, respectively.

A recent one-year market share analysis for the broader-eight-county region revealed the data presented in Exhibit Case.1.  CMC has market advantage in substance abuse, psychiatrics, and obstetrics.  JMC has market advantage in adult medical and surgical care.  At a recent administrative meeting, the following CMC utilization figures for the year were reviewed:

  • Admissions are down 14 percent.
  • Medicaid admissions are up 11 percent.
  • Ambulatory care visits are down 10 percent.
  • Surgical admissions are down 6.7 percent.

Exhibit Case.1, One-Year Market Share Analysis

FacilityDischargesPercentage of Total
CMC7,81918
JMC8,98921
LMC6,82016
All others19,54645
Total43,174100

A recent auditor’s report included the following notes:

  • A significant adjustment was required at year-end to correctly reflect contractual allowance expense (i.e., the amount of money spent in hiring outside contractors).  The data used at the beginning of the year to estimate contractual allowance expense were grossly inaccurate.
  • Insurers were not billed for services by certain hospital-based employed specialists ($7 million for the past year) as a result of neglect on the part of the hospital billing staff.
  • A total of $1.7 million in Medicaid reimbursement was not authorized.  No follow-ups were done and no claims were resubmitted.

Appendix H. Coastal Medical Center:  Inpatient Data

Trend Report

Inpatient Utilization Statistics                        2015                2014                2013                2012

Case-mix index                                               1.666               1.692               1.713               1.729

Medical MS-DRGs                                         66.26%            65.57%            65.00%           65.38%

Surgical MS-DRGs                                         33.74%            34.43%            35.00%           34.62%

Routine discharges to home                            5,729               5,343               5,110               5,092

Discharges to other acute care hospitals              85                    94                     94                   81

Discharges to skilled nursing facilities           1,360               1,346               1,238               1,305

Deaths                                                                404                  289                  330                  314

Other discharges                                             2,120               2,171               1,962               1,661

Total discharges                                              9,698               9,243               8,734               8,453

Psychiatric discharges (DPU, included in total)    493                  508                  451                  443

Rehabilitation discharges (DPU, included in total)     139                  171                  141                  166

Medicare Advantage (HMO) discharges          942                1,872               2,308               2,518

    (not included in total)

2015 Statistics by Medical Services

                                    Number                   Average                                                                                                  CMI-

                                                Medicare                 Length of                 Average                  Average        Medicare            Avg

                                                Inpatients                 Stay                         Charges (5)             Cost (5)         CMI                   Cost (5)

Cardiology                  1,513               3.6                   23,498               6,550         1.030         6,362

Cardiovascular Surg   1,123               3.9                   86,224             21,103         2.909         7,255

Gynecology                      38               2.1                   36,756               8,613         1.084         7,944

Medicine                     1,691               5.3                   33,073             10,221         1.283         7,967

Neurology                      502               4.3                   27,248               8,378         1,200         6,982

Neurosurgery                   42               9.5                  111,058            30,272         3.492         8,669

Obstetrics                         12               5.2                   20,415               9,146           .687       13,324

Oncology                      101                5.5                   39,450             11,021         1.638       6, 729

Orthopedic Surgery       795                3.8                   61,015             17,228         2.369       7,271

Orthopedics                145                 4.1                   23,034               7,127         1.060       6,725

Psychiatry                     459               10.5                  30,824             14,766           .924       15,989

Pulmonology                 796                4.9                   32,695               9,258         1.419         6,522

Surgery                          513                8.8                  100,849            27,114         3.858         7,027

Surgery for malignancy        37                6.9                   89,678             22,285         2.138       10,425

Urology                         420                4.5                   27,637               8,802         1.199         6,742

Vascular surgery           265                3.7                   52,825             13,205         1.886         7,002

______________________________________________________________________________

TOTAL                       8,453               4.98                 45,557             12,827         1.729         7,421

Also, the CMC hired a new Chief Executive Officer (CEO).  The new CEO did an exhaustive analysis of CMC and his findings are highlighted in the textbook (Harrison, 2016, p. 13-16).  Among other things, the CEO found no formal strategic planning process in place at either the CMC or the Coastal Healthcare Inc. levels.

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