QUESTION
Strategic Management of Health Care Organization
HCA-561, Strategic Management & Planning in Healthcare Organizations, Spring 1, 2019
David Slowik, Facilitator
Written Case Analysis Assignments Document Format & Content
Here are the sections that are required for your written case analysis assignments. Please use these section headings within your document to make it easier for everyone to review your case analysis.
- Title Page: Identify yourself, the course #, session #, Case name, Date prepared
- Abstract: Preview your analysis document letting the reader know what they will gain from reading the remainder of your document
- Problem or Opportunity (whichever your review concludes): This defines the core focus of your analysis. A problem is something that needs to be resolved for the organization described in the case. An opportunity presents options to enter new markets, offer new or improved services, ETC.
- Analysis: This is the core analytical task required for your analysis. As such, it presents your analysis of the quantitative and qualitative elements presented in the case, and supplemented by at least one external source (usually via Internet based research on the case topic). Integrate the case and external source information with your own analysis. Our textbook does not count as one of the external sources. Please do not mainly restate or summarize the case information. Identify alternatives strategies / options that you considered in building your recommendations. Your analysis is critically important in adding value to the organization’s decision making processes.
- Assumptions: Our recommendations all deal with an unknown future environment. What assumptions are your making about the external or internal environments of the case’s organization that affect the viability of your recommendations?
- Open Issues: These are the unknowns that represent questions that you have about the future which affect your recommendations. They can sometimes be answered by recommended new research, discussions with the case organization’s staff, ETC. In other cases, the issues may not be resolved until some future event (like an upcoming Board of Directors meeting, or upcoming regulations changes are made).
- Recommendations: Use your analysis to develop the strategic path that you recommend that the case organization follow in order to solve the stated problem or realize the stated opportunity.
- References: Identify the case name, authors, ETC., as well as your supplemental sources. Use the APA Style Guide (available online from the HFU Library) to present these sources.
| Subject | Nursing | Pages | 5 | Style | APA |
|---|
Answer
The Community Blood Center of the Carolinas
Abstract
The main problem facing the Community Blood Center of the Carolinas (CBCC) is the rise in blood costs. Ten hospitals in the Charlotte area pooled resources to start the facility to address the exorbitant price of blood offered by their former Red Cross supplier. However, even though the facility has managed to slightly reduce blood costs, the current cost is still too high and needs to be further reduced. Leveraging assumptions such as the community's willingness to increase their rate of blood donations and the abilities of the benefits of economies of scale to reduce the cost of production. Considering the assumptions, CBCC's strategic focus should be on increasing its blood collection capacity to effectively achieve its core mandate of reducing blood cost for its partner hospital and community members in Charlotte.
Problem
The main problem in the case stems from the exorbitant cost of blood. The Hospitals in Charlotte-area were initially relying on the Red Cross to supply their blood needs. However, due to exorbitant prices charged by Red Cross, ten hospitals in Charlotte decided to pool resources to establish a community blood center. The blood center managed to reduce eth cost of blood for the hospitals as its unit was $50 cheaper than the price offered by the Red Cross (Swayne,2014). However, despite the reduced price of blood, the price is still too high and needs to be further reduced. Therefore, the main problem is the high prices of blood and how it can be lowered.
Analysis
The Community Blood Center of the Carolinas (CBCC) managed to reduce the cost of blood for the ten charlotte area hospitals that pooled resources to solve the rising cost of blood offered by the Red Cross. Even though the facility has reduced their blood cost and resulted in an annual $3 million in savings, the cost of blood offered to the community is still high. It, therefore, increases the cost of care offered to the patients. According to Florence et al. (2018), medical inputs' cost plays a vital role in the overall cost of care. Therefore, the cost of blood significantly increases the cost of care paid by patients. CBCC should therefore leverage the following alternatives to reduce their costs of blood, which will, in turn, reduce the cost of care received by patients
The first alternative is to expand its blood collection from the community. Increasing the collection of blood from the community will enable CBCC to benefit from economies of scale. A higher processing capacity will translate in the reduction of the overall cost of acquiring, processing, and storing blood, thus leading to a reduction in the cost of blood in the community. The second alternative is to switch the supplier of its blood deficit. Currently, CBCC subcontracts Red Cross to supply it with their excess blood. Therefore, switching suppliers will increase the CBCC's chances of getting affordable prices in the market.
Assumption
The following assumptions were made when formulating alternative solutions, the CBCC can implement to solve its cost of blood problem; first, it is assumed that Charlotte's community will respond positively to CBCC's increased demand for blood to enable it to meet its expanded capacity. Secondly, it is assumed that CBCC will receive significant discounts due to its increased production rate. The discounts will play a vital role in reducing the cost of blood. Therefore, CBCC must realize the benefits of economies of scale to achieve a reduction in the cost of blood.
Open Issue
For CBCC to increase its blood collection rate, it needs to intensity its marketing campaign in the community. Marketing needs resources and is an activity that the board decided to cancel its budget to reduce CBCC's cost of operations. Therefore, the board needs to meet and allocate a budget to facilitate CBCC's intensified marketing to attract more donors from the community to increase its blood collection.
Recommendation
CBCC's strategic focus should be to increase its blood collection. The institution was formed to benefit the community members by reducing the cost of blood, which in turn reduced the cost of care. However, CBCC has not managed to effectively deliver its mandate and, therefore, should focus on increasing the rate of blood collection in order to enjoy economies of scale, which will enable it to significantly reduce the cost of blood.
Florence, C. S., Bergen, G., Atherly, A., Burns, E., Stevens, J., & Drake, C. (2018). Medical costs of fatal and nonfatal falls in older adults. Journal of the American Geriatrics Society, 66(4), 693-698.
Swayne, L., (2014) Community Blood Center of the Carolinas: Building for a Better Community, Case Research Journal