Welcome to the Williams, Jones and Langston Consulting team. WJL Consulting has been in the healthcare consulting business for nearly 25 years! Our experience helps us understand our clients and work with them to determine the best ways to help them grow their businesses.
For your first project, you’ll assist us on the Woodland Ridge Hospital project – we are helping them determine which of four possible investments would be most beneficial for the hospital’s growth. I’ve worked on similar hospital projects, so I have some good ideas about how to approach this one.
Client Profile
Let me start by giving you some background on our client. Woodland Ridge Hospital is dedicated to providing their patients with the best possible health care. Using state-of-the-art technology they offer superior care across a broad range of services.
The facility has:
- 300 beds
- 10 Operating Rooms
- Trauma Level 3 Emergency Department
They offer specialty services in:
- Cardiology
- Orthopedics
- Oncology
- Women’s Health
Their CEO will tell you that they work hard to make every interaction with have with a patient a good one. They make compassion and dignity the hallmarks of their patient care.
Client Goals
As a for-profit entity, Woodland Ridge is naturally concerned with the business of running a hospital. Like any for-profit organization, they have a board of directors, which oversees operations and helps establish financial and strategic goals for the hospital. Their number one goal is to be profitable. They have to make a profit in order to stay in business.
They are also very interested in providing the best possible care to patients in the area. They work hard to stay abreast of the needs of people in the area and want to offer services that will best support patients.
Finally, they are also concerned with how they are perceived in the community. Woodland Ridge does have competitors in the area. There is a non-profit hospital, Colorado Community Hospital, about 6 miles away. Since Woodland Ridge and CCH offer fairly comparable services, Woodland Ridge would really like to do something to set themselves apart. When a person in the Mitchell, CO area needs medical treatment we want Woodland Ridge Hospital to be the first place they think of.
The Project
Woodland Ridge has about 20 million dollars to make a capital investment. They are considering four possible investments – purchasing a Cyberknife, remodeling their existing facility, building a dialysis center or building an Alzheimer’s Special Care Unit -- and want us to help them decide which option to pursue. I’ve attached proposals the hospital prepared describing each of the possible investments. They will help you understand each option.
Your Job
As a Junior Consultant, your job is to carefully analyze each of the four options and determine which of the four proposals is the best choice for the hospital. Once you have made a decision you’ll prepare both a written report and a presentation for the CEO to help him understand your reasoning.
Project Process
This project involves two major steps. First is a meeting with the stakeholders and a review of the non-financial implications of each proposal. An organization like Woodland Ridge usually has a variety of goals. You’ll need to listen carefully to what the stakeholders say and determine what tradeoffs they are willing to make when deciding on a proposal.
Once you are familiar with their viewpoints and priorities you’ll then conduct a detailed financial analysis. You’ll look at potential revenues from each project, expenses and costs, and use these figures to determine net income. You’ll also look at the net present value of revenue made during each year of each project. You’ll have an opportunity to analyze the risk involved in each project and look at the breakeven points, both yearly and for the duration of the project.
Ultimately, you’ll review all the financial analyses you have conducted and based on the stakeholder priorities you determined, will choose one project to recommend. You’ll prepare a 10 minute presentation for the CEO detailing your choice and how your analysis supports your decision.
A Little Help
I recently ran across the following article online, How to Decide Whether to Buy New Medical Equipment. It does a good job describing the process you will use in your analysis. You may want to take a few minutes to review it, so you have a sense of what you will be asked to do on this project.
Your First Step
We will be attending the project kick-off meeting shortly. At the kick-off meeting we sit down with the client and discuss the project. We’ll meet with several leaders from Woodland Ridge Hospital, including the CEO.
I have attached the four proposals that Woodland Ridge is considering. Before that meeting, I’d like you to work with a group of colleagues getting up to speed on each of the proposals. Here’s what I’d like you to do:
- Start by carefully reviewing each proposal and taking notes on any questions you have.
- After your review, I’d like you to brainstorm a list of questions you would like answered during the kick-off meeting. As you brainstorm, keep two things in mind:
- First, always keep the ultimate goal of this project in mind. Ultimately, we must choose and recommend one proposal to the CEO. Think about what information you will need in order to analyze and choose a proposal.
- Second what kind of information could the leaders of Woodland Ridge hospital give you that would help you with the various analyses?
I’ll check in with you before the kick-off meeting. Thanks!
Abby
Abigail Vincent
Sr. Consultant
WJL Consulting
