Capital City Visiting Nurses Association (VNA) and Hospice has requested that Jasper Gardens enter into a contractual relationship to provide inpatient hospice services to Jasper residents. The organization is able to do this under existing Medicare regulations involving its skilled nursing facility (SNF). Capital City VNA and Hospice would provide all staffing and direct patient services in this new unit located at Jasper Gardens. Jasper Gardens would provide a dedicated wing, area, or building with private rooms for the patients, meals, general nursing supervision, and general services (housekeeping, etc.). They would pay Jasper Gardens a price per patient day to be negotiated. Jasper Gardens estimates that its direct costs would be approximately $75 per day for the services they have requested. Its pharmacy service would provide needed drugs and other durable medical equipment at cost that would be directly reimbursed to the pharmacy by Capital City VNA and Hospice. The initial estimate is that Jasper Gardens could add a new dedicated wing of four to eight private rooms at approximately $180,000 per private room (minimum four).

1. Should Jasper Gardens agree to enter into this contractual relationship?
2. How large a unit should they offer?
3. What price per day should they negotiate with Capital City VNA and Hospice?
4. What is the general estimate of the positive and negative impacts of this unit on the nursing home?