The Case For Open Heart Surgery At Cabarrus Memorial Hospital (Case Study Sample)

Case Study
Name
Institution
Case Study
Question 1: The proposed program complies with Cabarrus Memorial Hospital’s (CMH) mission because it was established by Mr., Cannon with an aim of providing the best health care. The lack of an open surgery program at the hospital violates the mission. Without the open surgery program, patients have to be transferred to other facilities causing delay in treatment that results in anxiety and hassle for the patients and their families. In this way, having the open surgery program ensures that quality care is provided to the patients in a timely manner and in a conducive environment. Further, the proposed program complies with the mission of the hospital as an educational facility where continued education and research into medical care and treatment is enhanced.
Question 2: CMH has the necessary infrastructure because it is a modern well-equipped hospital with a 457 bed capacity. Already the hospital has existing cardiology services that include emergency room that is well-equipped for treatment of cardiac emergencies, cardiac catheterization, a coronary care unit with eight beds, and also cardiac rehabilitation services. This existing infrastructure will serve as the foundation of the proposed open surgery program. Additionally, if they add the program, they would have the available services of Dr. Ralph (Chris) Christy who is completing a heart surgery residency. CMH also has financial resources for such a program because they are not in debt, and they have adequate reserve funds to finance this program without having to borrow any money.
Question 3: There is competition among the area hospitals in Charlotte. Despite the fact that none of the existing heart surgery programs are in the service area of CMH, they still pose a threat because they could easily form alliances with smaller competing hospitals in CMH’s service area and thwart the success of CMH. For example, the major Charlotte hospitals providing heart surgeries such as Mercy Hospital, Presbyterian Hospital, and Carolinas Medical Center could offer onsite cardiology support and referrals or offer mobile intensive care transport to bring patients from these smaller hospitals bypassing CMH. These Charlotte hospitals would offer completion as opposed to cooperation since they could also try to block CMH from getting a Certificate of Need (CON).
Question 4: The hospital’s proximity to Charlotte is an advantage because it can profit from the growth that has spawned in the region. Currently, Charlotte major hospitals offering open heart surgery are Mercy Hospital, Presbyterian Hospital, and Carolinas Medical Center. The success of these hospitals could help consumers to view CMH as a hospital that will also offer quality services because of its proximity to Charlotte. Further, CMH could easily reach out to any of these successful Charlotte hospitals and gain more expertise, professional advice, or acquire new personnel to run its new program. Further, CMH’s affiliation to Duke University Medical Center is also an advantage because it offers an opportunity to continue medical education. Duke will offer CMH a good opportunity to provide nationally recognized expert consultation into the heart surgery program.
Question 5: The number of cases for the cardio-vascular program are projected in Exhibit 19/14 of the case on a yearly basis and the estimated costs.
Costs
Year 1 direct costs: $2,364,214
Year 1 indirect costs: $503,650
Total cost for year 1: $2,867,864
Revenue
The average stay for patients is 9 days at an estimated cost of $7,434
The ancillary charges are estimated for the average stay at $33,525
Revenue per case is therefore, $40,059
In this way, the break-even for year I at CMH is estimated to be $2,867,864 divided by $40,959, which comes to 70 cases per year. In this case, the estimated point of balance for the number of cardio-vascular program is 70 cases.
Question 6: The service area for CMH should be changed to include other areas as the source of patients who would require cardiovascular surgery service. The study showed that the major source of patients for their radiation oncology and cardiac catheterization procedures is Concord and Kannapolis. This shows that the main service area is Cabarrus and Rowan counties. In order to succeed with the program, the service area should change to include other counties such as Mecklenburg, Union, and Iredell which are neighboring Cabarrus. The connectivity (infrastructure) from Cabarrus to these counties should be enhanced to allow consumers to access CHM. For example, CMH should come up with a strategy of how to get referrals from these counties to build a wider service area to enhance the effectiveness of the heart surgery program.
Question 7: To carry out this program, CMH would be required to use a large amount of money to create and renovate the existing space to accommodate the new services. Approximately 5,811 square feet of the hospital space would need to be renovated. Further, the hospital would need to hire approximately 23 additional employees within a year and they would grow to around 39 in three years. More money would be required for additional ten acute care beds, which requires substantial amount of money to setup. More money would be required to create three intensive care (ICU) beds and a new open heart operating suite. This means to begin the program, a lot of money would have to be spent as per healthcare regulations and standards.
Question 8: The advantage of states requiring certificates (CON) of need to permit hospitals to add facilities and equipment is to promote healthcare cost containment. Basically, when hospitals have excess capacity due to overbuilding, it leads to fluctuation of healthcare costs. Price inflation occurs when the hospital is unable to fill its capacity such as beds and has to charge high costs to mitigate the costs of the beds that are not used. Another advantage is that CON prevents unnecessary duplication of healthcare facilities, as well as services. This occurs when a hospital randomly decides to add more facilities or equipment that may later be unnecessary or of less value than initially projected. The CON is also a way of guiding on the best way t...