Question

Friendly Assisted Living Facility-1 Friendly Medical Center, an urban, nonprofit, 450-bed rehabilitation hospital, began to see a significant decline in admissions. Friendly Medical Center's mission focuses on inpatient and outpatient rehabilitation of the severely injured and catastrophically ill. While the patient census varied from month to month, it appeared to the Friendly Medical Center Board of Trustees that the inpatient popu- lation was slowly but steadily declining. The hospital's market researchers reported that fewer people were being severely injured due to the popularity of seat belts and bicycle/motorcycle helmets. In order to get a handle on the future of the organization, the Board, and the CEO, Fred Splient M.D. called for a major strategic planning effort to take place. In January 20X6, Friendly Medical Center held a plan- ning retreat to identify future opportunities. The outcome of the retreat was that the Medical Center needed to focus its efforts around two major strategic initiatives. The first, a short-run initiative, was to be more cost-effective in the delivery of inpatient care. The second, a long-run strategy, was to develop new programs and services that would capi talize on the existing, highly competent rehabilitation therapy staff and Friendly Medical Center excellent repu- tation in the region. At the time of the retreat, Fred Splient's parents were living with him and his family. Fred was an active member of the sandwich generation." His parents were aging and developing many problems common to the geriatric popu. lace. Their increased medical needs were beginning to wear on Fred and his family. It crossed Fred's mind that life might be more pleasant if the hospital Board approved an expansion of the Medical Center's campus to include an assisted living facility In March 20X6, Fred had his Business Development team prepare a rough estimate of the potential return on the investment of an assisted living facility. He asked the team to identify different options for facility construction and the associated costs. The team also did a complete competitive analysis and examined the options for services to be offered based on Friendly Medical Center's potential population base and catchment area. The Business Development team visited several facilities across the country. The team also interviewed companies that could oversee the design, building, and operation of the facility for Friendly Medical Center. The development team pro- duced a preliminary business plan based on the recom- mended structure for the facility, estimated capital expenditure needs, estimated income from operation of the facility, as well as projected revenues to other Medical Center programs resulting from the facility's population. The plan was presented at the May 20X6 meeting of the Board of Trustees. Fred Splient and his team intro- duced the Board to the concept of opening an assisted liv- ing facility on Friendly Medical Center's campus. The facility would be set up as a for-profit subsidiary of the Medical Center so that it could generate a profit and not be subjected to the strict guidelines of the hospital's accrediting agencies. As a subsidiary organization, how ever, the Board would still have control. The chosen facility design was a freestanding apartment-like facility with a sheltered connection to the Hospital for access to the kitchen and hospital services. The facility would have 100 units with 15 to 30 of the units classified as "heavy-assisted" and built to code to house the physically and medically disabled. The rest of the units would be "light-assisted," larger apartments. The population would be approximately 110 to 150 residents, with most being single occupants rather than couples.

Answer 1

1. Cost of the project is estimated between $8500000 and $11000000 for the facility construction including cost of land, furnishings, and a sheltered construction to the hospital. The time estimated for the project is after the November 20X6 elections to July 20X7 which comes around seven months.The scope of the project is to plan,build and open a free standing apartment style assisted living facility of 100 units at the friendly medical center to facilitate the business growth which can be completes within the budget of $8500000 to $11000000 and can be opened by July 20X7.

2. The expected benefits of the project are the business growth of friendly medical center with immediate increase in the number of referrals to the outpatient therapy programs.It also focuses on strengthening its focus on reimbursable preventive and wellness programs for the healthier aged population.Another benefit expected is to increase the census in the hospital inpatient units. The net income from the project is estimated to be between $9000 and $12000 per unit per year.The net cash flow for the entire project is estimated to be around $1500000 per year.

3. The retreat was planned when the hospital was facing a decline in the admissions to find out future opportunities to major strategic initiatives evolved as the outcome of the retreat one is a short run initiative to be more cost effective in the delivery of inpatient care and the second one is a long run strategy to develop programs and services that would get benefits from the existing highly competent rehabilitation therapy staff and friendly medical center excellent reputation in the region.The first one does not seem to be a good one since being cost effective may affect the quality of the services and may lead to more decline in admissions.The second one is a better initiative and the same was used to develop the plan of an assisted living facility for the aged people on the basis of CEO own experience on his ageing parents and the projects may lead to increase in profit and business growth.Yes i would call it a productive retreat because the retreat opened up a plan for starting assisted living facility connceted to the hospital targetting the aged people,which is expected to give more benefits to friendly medical center.A plan utilising the hospital resource and reputation is an excellence choice.

4. The project selection procedure included repairing a rough estimate of the potential return on the investment of an assisted living facility.The team was asked to prepare different options for facility constructions and the associated costs.The team also done a competitive analysis and examined the options of the services to be offered based on the hospital population base and catchment area.They visited several facilities across the country and interviewed different comapnies thatcould oversee the design,building and operation of the facilty.The development team developed plan based on the structure,expenditure,income and revenue to other programs from the facility.

Analyzing on the return on investment and preparing a rough estimate is a commom procedures for project selection.But sending the business development team to different parts of the country and interview companies to managethe project is a very good decision made by the company that is not so common.Usually companies invite applications instead of visiting different firms.The method adopted would help to choose from different companies whom they trust to hand over the work.The competitive analysis and selecting from the variety of options on the service to be provided based on the organizationscapabilities is also a wise decision that will reduce the chances of loss.