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Set-up: You are the executive team for a 350-bed hospital in a mid-size city (250,000 residents) in the United States. Problem: Your hospital has experienced an 8% drop in outpatient surgeries over the past 2 years. This is potentialy related to moro patients having these types of procedures performed in an outpatient ambulatory surgical center (ASC) as oppased to a outpatient hospital setting. There are two ambulatory surgical centers that have opened in your community within the last 5 years. As an executive team you are worried about this trend and need to decide what to do. Background Information: Outpatient surgery is a particularly profitable service line, accounting for nearly 35% of your total net income alone. Volumes have historically been strong, and your hospital performs roughly 10,000 outpatient surgeries a year. Commerical cases are particularly profitable, running a 48% profit margin compared to 21% Medicare & 8% Medicaid/Self-Payl. You have seen that over the past 2 years, your commercial outpatient surgeries in particular have decreased, with volumes down 15%. This is now directly impacting the bottom line of the hospital. Your hospital does not employ any physicians, but rather contracts with physicians ta da procedures in your facility. You have noticed that several of these contracted physicians have done significantly fewer cases in the hospital, a trend which is particularly evident among surgeons that have an ownership interest in one of the new surgery centers. In addition, patients have begun to ask to have procedures done in an ASC setting, as the cost of procedures is much cheaper than it would be in the hospital. Resource Levels Financial Resources: Patient Salisfaction: Employee/Physician Engagement Clinical Quality / Safety out of 5 out of 5 out of 5 out of 5 Choices: Your hospital can chaose to Al Continue to operate as you have in the past, and assume that the trend lowards ASC uflicalion is temporary Bl Confront the surgeons that decreased the number of procedures done in the hospital and ask that they bring more procedures back to the hospital. Cl Lower the amount that your hospital charges for outpatient surgeries to become competitive with ASC rates, in the hopes that this wil cause patients to request to have surgeries done in the hospital instead of the ASC Dj Buld your own Ambulatory Surgical Center with your hospital as the sole owner to directly compete with the other ASCs in town. El Buid an Ambulatory Surgical Center as a joint venture with several surgeons in the community to directly compete with the other ASCs in town. Fl Other Strategy Justification: Please justify your choice above - what were your reasons for choosing and what do you anticipate will happen as a result of your choice
