Case Study You are the CFO of Livermore Hospital. It is a 250 bed, for-profit hospital, renowned for its cardiology unit. The hospital has 300 employees, including 125 physicians with staff privileges. Livermore Hospital is located in a thriving community that represents its primary service region. There are many high-tech companies and industries in the area that attract families and retirees from around the United States. The area has a mild climate and offers an excellent educational environment that includes multiple community colleges and universities. There are approximately 750,000 residents in the surrounding city, and its population is growing about 4% per year. Approximately 46% of the population is under 18 years of age, 42% is between the ages of 18 and 64 years, 12% is over 65 years of age; 49% of the residents are female and 51% are male. Livermore has one competitor, United Hospital, which is located 40 miles away. United is a 350 bed not-for-profit hospital with an excellent reputation. It has strong orthopedic and cardiac services and also offers oncology services, which are poorly organized and not accredited. United Hospital’s financial performance is stable, and its market share is growing. United has no formal orthopedic or cardiology departments, though several popular orthopedic surgeons and cardiologists maintain privileges there. The community’s premier orthopedic group practices are located near United Hospital, making it inconvenient for surgeons to use Livermore Hospital for surgery except in rare cases, however, a few orthopedic practices are planning to open branch offices near the Livermore facility. Cardiologists on United’s staff restrict their activity to performing consultants for Livermore physicians whose patients have been admitted to the facility. Although Livermore Hospital has had moderate success in the expanding community, its leaders would like to ensure adequate preparation for the future, especially in the environment of health reform. Your assignment is to assess key areas in Livermore’s operations from a financial perspective and report your results to the following questions: What areas of Livermore’s operations will be critical to review? How will Livermore’s financial data be used in the strategic planning and decision-making process? How will healthcare reform impact Livermore and its strategic planning? How do the community and United Hospital impact Livermore’s strategic planning?
