Exec Summaries the Medical Center

Exec Summaries

The medical center is currently operating at a significant loss, and with the largest cost element being salaries and fringe benefits and a substantial loss in existence due to bade debt, there are several options that the Nassau University Medical Center can pursue. Revenue increases could be attempted by charging more for services, which would cover the growing costs of labor and supplies needed in order to provide the basic care services that form the basic operations of the medical center. Alternatively, or more likely in an accompanying measure, the medical center could try to reduce labor costs, almost certainly be reducing staff numbers rather than substantially reducing salary and benefit packages. It is far less likely that significant enough savings could be generated by salary reductions alone, so staffing level reductions would almost certainly need to be necessary to rein in costs.

It is not clear that any measures can be taken to effectively close the budget gap the medical center is currently operating under, however. Revenue increasing measures would probably be far less effective than intended; the bad debt from patients would likely increase if prices for services were to be increased. Reduction in staffing levels would also cause operational difficulties for the medical center, and potentially leave the organization out of compliance in terms of mandated staff-to-patient ratios. If at all possible, the medical center might look at finding ways to expand services and make operations more efficient both due to process change and a greater use of economies of scale, which make per-service costs lower.

Holly Patterson Extended Care Facility

Bad debt is not a major problem for the Holly Patterson Extended Care Facility, and though operating expenses are increasing at a fairly modest rate (with the notable exception of benefits to employees, which are increasing more rapidly) they are not running rampantly out of control. Despite this, the medical facility is operating at a loss that appears to be growing more significant for reasons that organization has very little control over. Federal and state funding has been used in part to cover the operating expenses of the facility, which does not meet its full expenses through patient revenue, however these sources of government funding have dried up and can no longer be considered in the organization's operating budget. As it is unlikely that this governmental spending will resume at any point in the near future, the facility will need to find other ways to make up for its budget shortcomings through revenue increases and/or cost cutting measures.