Golden Age Hospital's integrated business model for senior care in Mission Viejo

Healthcare Administration Mission Viejo Executive Summary

Over the last several years, the healthcare delivery environment has been continually evolving. This is because consumers are demanding efficient ways for receiving a variety of services. That is focused on reducing costs and enhancing quality. The result is that the entire system is continually changing to keep up with them. In the case of Golden Age Hospital (GAH), they are reaching a crossroads with rising number of seniors locally and nationally. This is in response to the rising demographic and many local facilities feeling overwhelmed. The new location can be utilized as an integrated business model that will achieve these larger objectives. In the long-term, this will make them more competitive and able to respond to changes in the way industry is operating. Those who are able to do this will see their employee turnover rates decrease and they can enhance the care that is provided. Once this happens, is when they will be more competitive and they can adjust with the different challenges they are facing. This will enable them to offer unique products, services and adjust with the changing demands of regulators. In many ways, one could argue that this is something all existing and new facilities must take into consideration in order to keep up with these transformations.

Module 1: The External Environment -- Data Gathering

Over the last several years, the healthcare delivery environment has been continually evolving. This is because consumers are demanding efficient ways for receiving a variety of services. That is focused on reducing costs and enhancing quality. To achieve these objectives a number of different models have emerged. The most notable include: for profit, nonprofits and governmental. Each one has unique characteristics that are designed to reach key benchmarks. However, they are different in the approach and philosophies they embrace. (Kovner, 2011) In the case of Golden Age Hospital (GAH), they are reaching a crossroads with rising number of seniors and the lack of services.

In the future, the world of healthcare will rapidly change from these shifts. This is because 10 thousand baby boomers are reaching the age of retirement every single day. The result is they will need more services and support. (Kovner, 2011) In 2050, senior citizens will account for 20% of the population. ("Rising Demand for Long-Term Care," 2014) For Mission Viejo, this is problematic as the community has a higher senior population in contrast with the rest of the state. However, the number of facilities are limited in scope and do not provide sufficient solutions for them. This has the potential to place increased amounts of strain on healthcare providers and professionals.

Golden Age Hospital is a new facility that will be integrated with a Community Clinic and others in the areas (i.e. Mission Hospital and Children's Hospital). The basic idea is to enhance the services provided to senior citizens and other demographics with special needs in Mission Viejo, California. Seniors will be the primary focus based on the rising numbers nationally and locally. This means that they will require specific services designed for the conditions that are most prevalent.

For instance, Nabili (2015) determined that when someone becomes older they are more susceptible to various diseases and conditions. The most notable include: hormonal, musculoskeletal, neurological, cardio vascular, respiratory, psychiatric and gastrointestinal. The result is that demand for these services will continue to rise well into the future. (Nabili, 2015) This is having profound impact on costs and the family's ability to assist their loved ones as they become older. According to the Congressional Budget Office (CBO), a seismic shift is expected with most of the population becoming older. They estimate that by the year 2050, there will be a total of 20% of the population age 65 or older. The problem is compounded with advancements in technology and medicine helping people to live longer. In the study, actuaries estimate that 66% will require some kind of assistance when they reach this age group. This is from cognitive or physical limitations. The result is that costs will continue to rise from a need for these services. ("Rising Demand for Long-Term Care," 2014)

Mission Viejo has the proper amount of governmental and community programs which are designed to address the needs of seniors. For instance, there is a Senior Citizen Activities Committee. They focus on providing advocacy and support to older adults in the community. At the same time, there is also the Norman P. Murray Community and Senior Center. They are giving them a central location for different activities to remain engaged. This helps to enhance the quality of life inside the community. ("Mission Viejo California," 2015)

However, when it comes to offering medical and long-term care, many of the existing facilities are limited. This is because there are mainly two hospitals in the area (i.e. Mission Hospital and Children's Hospital). They will provide limited services to seniors. This is from having to meet the demands of other demographics of patients they are working with. The growing trends are showing that some kind of facility must be developed to address the needs of middle class individuals and their families. The new hospital and clinic will achieve these objectives by specializing in those services they need the most. This will reduce demand on the other facilities. While at the same time; everyone can work together to reduce costs and increase their operating margins. This creates win -- win situations for all stakeholders. ("Mission Viejo California," 2015)

Mission Viejo has a higher amount of senior citizens in comparison with the rest of California. According to the U.S. Census Bureau, they account for 14.5% of the population in the city versus 11.4% statewide. These are considered to be middle class with the average salary coming in at $40,909 versus $29,507 for the rest of California. In general, more people will live in the community for more than one year (i.e. 88.1%). The below table is illustrating the various racial and gender demographics. ("Mission Viejo California," 2015)

Racial and Gender Demographics for Mission Viejo, California

Segment

Mission Viejo

California

White

79.8%

57.6%

Black

1.3%

6.2%

Native American

.04%

1.0%

Pacific Islander

9.1%

13.0%

Latino

17.0%

37.6%

Mixed

4.6%

4.9%

Male

48.8%

49.7%

Female

51.2%

50.3%

These figures are showing how the largest segments of the population include: whites, Pacific Islanders, Latinos, mixed races and blacks. This makes the community very mixed and traditional up to a certain point. ("Mission Viejo California," 2015)

Clearly, Mission Viejo needs more support for senior citizens. This is because they are from middle class demographics and will face higher costs for healthcare / support. The current facilities are unable to meet these needs and will continue to face considerable challenges in the future. To address these issues, it is imperative to have a new hospital and clinic that specializes in this kind of care. They can help to reduce demand, improve quality and decrease costs. Over the long-term, this will result in healthier patients, a higher standard of living and a better quality of life. In many ways, one could argue that this is the type of services senior citizens will need to avoid many of the challenges impacting the 65 and above age group.

Module 2: Market Research and Segmentation

A major challenge impacting all healthcare organizations is understanding the marketplace now and in the future. This is problematic, as they do not have an economically viable business model for addressing the needs of the area they serve. Over the course of time, this can lead to an increase in costs with the facility continuing to lose money. When this happens, it will eat away at their ability to respond to the needs of patients. This is when there is a realistic possibility of the hospital closing. To address these challenges, a new approach must be taken that identifies the target market and if it will grow to in the future.

In the case of GAH and the community clinic, the facility will meet the needs of senior citizens age 50 and up throughout Southern California. They are focused on providing solutions for the changes they will experience during this time of their lives. The most notable include: cardiologists, gastrointestinal specialists, psychiatrists, physical therapists and varying degrees of skilled nurses. In general, most people will prefer a community clinic for checkups and small procedures. However, in more serious situations they will require the assistance of the specialist. As a result, they want a medical center hospital combined with a community clinic. The two will work together to provide a more comprehensive solution for seniors. This is when the facility will increase in prominence by maintaining state of the art solutions and controlling costs.

One of the reasons why the area around Mission Viejo is so popular is because the mild climate and close proximity to major urban centers. For senior citizens, this is an ideal environment to live healthy lifestyle choices and have all of the amenities they want. The result is that more people are counting to move into Mission Viejo and number of other areas. The most notable include: Aliso Viejo, Ladera Ranch, Laguna Hills, Laguna Niguel, Laguna Woods, Lake Forest, Mission Viejo, Rancho Santa Margarita and San Juan Capistrano.

The target market will be those individuals who are age 50 and older. These people are more in need of healthcare services and cannot have all their demands met by the status quo. Instead, a new facility must be created which is taking these factors into consideration. For example, the county encompassing Mission Viejo (i.e. Alliso Viejo) and the county next door (i.e. Orange) have a senior population demographic averaging 6.49%. The below table is illustrating these amounts and their overall average for each county respectively.

People Age 50 and over who Live in Alliso Viejo and Orange Counties

Age Group

Alliso Viejo

Orange

50 -- 54

7%

7%

55 -- 59

5%

6%

60 -- 64

3%

5%

65 -- 69

2%

4%

70 -- 74

1%

3%

75 -- 79

1%

2%

80 -- 84

1%

2%

84 and Over

1%

2%

Mean

2.62%

3.87%

In this case, 6.49% of the population from both counties is over the age of 50. These numbers can be used in conjunction with the figures from Mission Viejo to show how there is higher population demographic. As a result, the target market is the communities of Mission Viejo, Aliso Viejo, Ladera Ranch, Laguna Hills, Laguna Niguel, Laguna Woods, Lake Forest, Mission Viejo, Rancho Santa Margarita and San Juan Capistrano. ("Community Profile," 2014)

There are a number of special needs for senior citizens. The most notable include: hormonal, musculoskeletal, neurological, cardio vascular, respiratory, psychiatric, gastrointestinal, long-term care and hospice services. These patients require services that are customized for them. This means that they will want a certain amount that adjusts with their changing needs, health and lifestyle. There are number of specialized physicians cliental will require such as: cardiologists, gastrointestinal specialists, psychiatrists, physical therapists, general practitioners and varying degrees of skilled nurses. These areas are important, as they will address the different needs of seniors at varying stages of their lives. For example, someone who just retired many not require skilled services in comparison with a patient that is 95 years old. This model will focus on adjusting to their changing needs. Once this happens, is the point they will be more effective in providing support, research and treatment options. In many ways, one could argue that this model has not been tried, with most facilities integrating all of their programs together.

For the most part, seniors will prefer a community clinic for checkups and small procedures. However, in more serious situations they will require the assistance of the specialist. As a result, they want a medical center hospital combined with a community clinic. The two will work together to provide more comprehensive solutions for seniors. ("Community Profile," 2014)

Case 2 -- Survey Table

Item #

A

B

Results - To be filled by the Instructor

Survey item: Specialized care for seniors at GAH and its community clinic.

On a scale of 1-10, where:

10= very much needed, and

1 = not needed

1

Is a special GAH medical center needed? Yes. This is because most facilities are focused on delivering solutions to a large segment of the population. For seniors, this means that they are left out.

2

Is a special community clinic needed in addition to the GAH? The community clinic will serve the everyday needs of patients. They will focus on preventive medicines, screening, health checkup, dietary needs, continuing mental health services and wellness programs. These areas will keep costs down and encourage everyone to maintain healthy lifestyle choices. In the event they become worse, the patient will go to GAH to received specialized services for them.

3

Yes. There are no mental health care, checkups, dietary, continuing mental health services and wellness programs.

4

There is a need for specialized programs to treat conditions impacting seniors.

Add at least 10 more items

Ten additional items include: hormonal, musculoskeletal, neurological, cardio vascular, respiratory, psychiatric, gastrointestinal, long-term care, physical therapy and hospice services.

("Community Profile," 2014)

Clearly, GAH is focused on reaching out to a specific segment of seniors (i.e. age 50 and up). Inside the Mission Viejo, they account for 14.5% of the city. However, within Alliso Viejo and Orange counties, these figures are averaging 6.49%. This will have an impact on GAH, as senior citizens throughout the area will use the facility to address a host of health related issues. This will give them the kind of solutions that are taking into account their needs, lifestyle choices and condition. At the same time, it is focused on decreasing costs and providing more support through the community clinic. In the future, this will help the medical center and the clinic to become two of the largest senior care facilities in Southern California.

Shared Facilities and Services

There will be a number of different services offered by GAH and the Community Clinic. The most notable include: geriatric, long-term care, hospice, outpatient services, nutrition, mental health and rehabilitation. These different areas will address the needs of older cliental.

Physician services will be integrated together through the facility contracting and hiring them. This means that doctors will work closely with organization as an independent contractor. Under the arrangement, the organization will cover the costs of their practice (such as malpractice insurance). In exchange, they agree to work with the facility and see the patients who are visiting it. This will result in having specialized services available, increasing compensation and decreasing costs. (Cuellara, 2006)

Ethics will help to guide the individual and prevent them from engaging in actions for the benefits of themselves or a specific group. Instead, it is concentrating on supporting the greater good within society. This is taking place by engaging in actions that will achieve these overall objectives. The problem is that various segments will have different views about what is considered to be moral. Those who are ethical will embrace a number of concepts to follow the larger standards of morality. This is used as foundation for helping the person to understand and react to the world around them in a way that is empowering other people and society.

However, during this process, everyone must have a sense of openness and understanding. This means that they cannot assume they are moral and will always follow these guidelines. Instead, the individual has to realize that they will make mistakes with their thinking and assumptions. To address these issues, each person needs acknowledge their own weaknesses and account for them.

Like what was stated previously, GAH is a new facility that will be loosely integrated with a Community Clinic and others in the areas (i.e. Mission Hospital and Children's Hospital). The basic idea is to enhance the services provided to senior citizens and other demographics with special needs in Mission Viejo, California. Seniors will be the primary focus based on the rising number both nationally and locally. This means that they will require specific services designed for the conditions that are most prevalent. The most notable include: hormonal, musculoskeletal, neurological, cardio vascular, respiratory, psychiatric and gastrointestinal. This will help to make the facility more responsive to the needs of seniors and the services they require.

The facility will utilize the market power approach. This is when a series of alliances will be formed with other facilities, physicians and other providers. Under this model, there is a focus on having some kind of clearly defined contractual arrangement where everyone will work together to improve quality and reduce costs. The more flexibility they are provided under this framework will allow them to think creatively. In many ways, this is something that is missing with those healthcare organizations which are vertically or horizontally integrating to reduce costs. According to Cuellara (2006), the market power model is more effective because of the flexibility it provides. This means that more customizable services are available to keep up with demand. Over the course time, this helps to maintain a lower cost structure. GAH is following this approach to improve the amount of services, quality and choices available to seniors. The result is that the facility will become a location where everyone can visit to receive the finest support and treatment available. (Cuellara, 2006)

Clearly, the best approach is for GAH is to utilize a loosely integrated model. That follows the basic concepts from the power model. This is when alliances are forged to reduce costs and improve quality. For seniors, this is something that is lagging at other facilities as they often have limited services. GAH will be able to deliver the best solutions at the lowest costs. As a result, they are utilizing these concepts to create a new way forward in modern medicine. This means that seniors can choose from a variety of customizable solutions for in and outpatients. The most notable include: geriatric, long-term care, hospice, outpatient services, nutrition, mental health and rehabilitation. These different areas will address the needs of older cliental.