WK2 Summative Assessment

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University of Phoenix *

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506

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Business

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Feb 20, 2024

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1 WK2 – Summative Assessment: Financial and Ethical Impact Analyst Summary Renetta Roland University of Phoenix MHA/506 Ricci Rizzo 06/12/2023

2 Financial and Ethical Impact Analysis East Chestnut Regional Health System (ECRHS) was formed by merging two hospitals, East River Medical Center and Archway Hospital, and the acquisition of a third hospital, Northern Mountain Medical Consortium. Mergers took place within the last 10 years. MHA/506 (University of Phoenix, 2021). Mr. Brown, the CEO, along with top management, have drafted a new strategic plan, with eleven strategic goals and a growth direction. The marketing department needs to know what is effective and address the rapidly moving strategic environment. The analysis that is being conducted will contribute to that objective. Mission and Objectives The organizational vision is to satisfy the community's people by providing the best possible care in the most effective way with services needed for the community. By merging these facilities that are now ECRHS will be able to go to the next level of care with its vision to build a new start of the art facility on a 100-acre piece of land that they purchased in the community. The mission is to take the leadership that ECRHS has developed, and they will be able to make all project decisions, set goals and be able to share the task through good communication and create teams to complete all tasks in a timely manner. This is the best way to complete all goals with strategic objectives. One of the objectives is to improve healthcare services for women, by improving this area of care, more women would start going to ECRHS. Over the next 3 years, the Obstetrical delivery will be extended by 20%, and with this information, more women will that their care is important and will feel more satisfied MHA/506 (University of Phoenix, 2021)

3 Organizational Structure and Culture The organizational structure of ECRH is moving away from a centralized structure. Having all managers involved in marketing decisions for ECRH business will all have a part in decision- making. Marketing strategies will be directly impacted as the marketing department is also included in making company decisions. Current Marketing Strategies ECRH is considered a for-profit organization, the profitably and the market has been decreasing and it is mainly because of its biggest competition, BMC. By opening a new facility across the street from BMC, will have more updated technology. It will open a new cardiac rehab center and adding a new addition to oncology will be more appealing to new patients. ECRH is a for-profit organization, hospitals within the healthcare industry operate to a typical profit margin. Marketing takes on a huge role in a ‘for-profit business. Marketing must create a revenue chart showing what the business module is and its profit = revenue – expenses. The inpatient payor mix for ECRH is 55% Medicare, 15% Medicaid, and 30% commercial (University of Phoenix, 2021). The goal is to fix this deteriorated inpatient pay mix. Current Financial Strategies A profitable organization is one that generates more money than it expends. Profitable organizations are businesses that use a variety of tactics to make a profit (What Is a Profitable Organization? 2021). Hospitals use operating margins to measure and track how much they spend on expenses – everything from doctors’ salaries to medical supplies – and then compare it to their revenue – the money that they receive from patients, insurance companies, and the government for delivering patient care. Operating margins can be used to benchmark

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4 provider organizations on their financial performance (A look at hospital operating margins in the United States, 2022) . Right now, the market for ECRH is not good but with the expansion of the new facility the profit margin will increase. The shared market for the organization is 20%. Physical and technological resources have a hug impact on profitability. People have smartphones and tablets to access care through telemedicine/telehealth, which makes it easy for patients that live in rural areas. Competitive Advantages ECRH competitive advantage is the Level 1 Trauma Center with air service, it is placed number one in the county. The helicopter services are well-recognized by the community as well as first responders. BMC, the competition is a Level 2 Trauma center. Current Value Chain Analysis The key element with ECRH is a marketing tool that sells the services and the brand to the community and with this, it translates into increased market shares for the organization. Distribution of service is addressed through the ease of access to the health care system as a whole and plans for future growth. That is why the key elements are important, it supports an increase in market share, reputation, and profitability. It builds value within the market. Marketing can then rebrand the organization with new strategies like personalizing care through patient stories and connecting the mission, vision, and value statement. This will be a better trusting relationship with the patient. With better patient care, the more profit the organization. Current Target Market The current target market of ECRH is women, in this market, ECRH’s focus is on all services to women. Some of the few items of care are breast exams, ob-gyn, and women-

5 centered education that will help entice the female population to become customers. The organization is aware that 72% of women in Chestnut County and 30% of women in neighboring counties that need health services MHA/506 (University of Phoenix, 2021). The demographics shows the largest city in the county is Maple County and the groups of residents are 90.8% of Caucasian, 7.1% Hispanic, and 1.0% African American. The household income average is $39,353 annually, which means 15.4% of the residents live in poverty and the average age in the community is 48 years old ECRH MHA/506 (University of Phoenix, 2021). The current consumers’ values, attitudes and lifestyle is that they want more options and better care when needed. They want to feel that they’re important and want to be heard. External Environmental Factors  Political – Merger/Acquisition  Economic – Medicare/Medicaid patients  Sociocultural – Drug abuse/addiction  Technological – Telehealth/Telemedicine  Competitive - BMC  Legal/regulatory – Federal Trade Commission Investigation/Predatory collections Conclusion Marketing is subsequently challenged to establish an effective marketing plan that addresses the rapidly moving growth of the environment. By being on the marketing team, this analysis that I have conducted will be a contribution to the overall objective which is increasing profit for a for-profit company and ensuring customer satisfaction in the community it serves.

6 References A look at hospital operating margins in the United States . (2022, December 15). https://www.definitivehc.com What Is a Profitable Organization? (2021, December 17). https://smallbusiness.chron.com/profitable-organization-10385.html . University of Phoenix (2021). Case Study: East Chestnut Regional Health System. HÀ/506 – Ethical Marketing: The New Health Care Economics website

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WK2 Summative Assessment

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