PERPETUAL

MERCY HOSPITALPresented by Group R

PROBLEM

In April of 2000, Sherri Worth, assistant

administrator at the Downtown Health

Clinic (DHC), which is run and

overseen by Perpetual Mercy Hospital

(PHC), found out some troubling news

and was very concerned about it.

Perpetual Mercy Hospital found out

about the possibility of establishing a

similar clinic five blocks north of their

facility. The main problem is that the

new clinic may take away DHC’s

current patients and put a damper on

DHC’s profitability and financial

HOSPITAL INDUSTRY AND AMBULATORY

HEALTH CARE SERVICES

Till 1960s

• Hospitals were largely charitable institutions & were

proud of their not-for-profit orientation

• Hospitals functioned primarily as workshops for

physicians and were guided by civic-minded boards

of trustees.

1960s

• Federal legislation introduced which created boom for

hospital industry.

• Hill-Burton Act provided billions of dollars for hospital

construction.

• Additional funds were poured into expansion and

construction of medical schools.

• Medicare and Medicaid subsidized health care for the

indigent, disabled, and elderly.

• Federal intervention changed the concept of health care

services from privilege to entitlement.

1980s• Skyrocketing health care costs had forced the federal

government to

reassess its role in health care.

• Stringent controls were placed on hospital construction &

expansion , & utilization

Late 1980s & Early 1990s• Hospitals were hard hit by the changes

• On one hand the federal government sought to reduce health

care costs through cutbacks in subsidy programs

• On the other hand , innovations in health care delivery

severely reduced the number of patients serviced by

hospitals.

INNOVATIONS

1) PREVENTIVE HEALTH CARE PROGRAMSa) Health Maintenance Organizations : An HMO encourages

preventive health care by providing medical services & enter

into contractual relationships with designated physicians &

hospitals & have been successful in reducing hospital days &

health care expenditures.

b) Preferred Provider Organizations : PPOs establish contractual

arrangements between health care providers & large

employer groups. PPOs generally offer incentives for using

preferred providers rather restricting individuals to specific

hospitals or physicians .

2) AMBULATORY HEALTH CARE SERVICES &

FACILITIES

• Minor emergency centres , known by acronyms

such as FEC (Free-Standing Emergency Clinic)

& MEC (Medical Emergency Clinic)

• Clinics that focus on primary or episodic care

FACTORS FOR THE GROWTH OF AMBULATORY

HEALTH CARE SERVICES

• Advances in medical technology , miniaturization , and

portable medical equipment have made more diagnostic

& surgical procedures possible.

• Customers often choose the hospital at which they wish

to be treated

• The mystique of medical & health care has been altered

with the growth of paramedical professionals &

standardized treatment practices.

PERPETUAL MERCY HOSPITAL

• 600 bed independent not-for-profit hospital

• One of the six general hospitals in city & twenty in the

country

• Financially stronger than most of the metropolitan-based

hospitals in United States

• Debt free & highest occupancy rate

DOWNTOWN HEALTH CLINIC (DHC)PMH realized that they were strongly dependent on inner-city

residents who higher incidence of Medicare coverage. PMH found

itself in need of privately insured, short stay patients in order to

stay in good financial standing. Therefore they planned to open

the Downtown Health Clinic (DHC), a n ambulatory facility in the

downtown area close to ten blocks from PMH. Here are a few key

points about the DHC :

• Opened May 1st of 1999

• Open 260 a year Monday through Friday

• Hours of operation are 8 AM to 5 PM

• Specialize in six services includes preventive health care ;

minor emergency care ; referral for acute & chronic health

care problems ; specialized employer services ; primary health

care services ; basic X-ray laboratory tests .

ALTERNATIVES

• Thirty of the patients suggested expanded service

hours between 7Am – 7PM

• One half of the female patients requested that

gynaecological services be added

• There were concerns about waiting time i.e.

between 11 AM to 2 PM as 70% of patients visits

occurred during this time & one half of the visits

were for personal illness.

• If possible a second physician

EVALUATIVE CRITERIA

What’s being considered in deciding on one of the

alternatives

1. Profitability

2. Customer Satisfaction

3. Attracting new customers

4. Cost Benefit

THANK YOU