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NURS FPX 6008 Assessment 2 Attempt 2 Developing a Business Case EZ

Developing a Business Case

NURS FPX 6008 Assessment 2 Attempt 2 Developing a Business Case EZ

The report provides an assessment of cost to benefits for the healthcare project started recently by Prime Medical Center, United States. The organization established and initiated a project SmartHealth to improve the demand and supply of healthcare services to ensure quality treatments for patients. In this report, the study represents a proposal for evaluation of costs and benefits acquired and incurred by the healthcare organization to provide benefits to the community. It will help to move the organization in a strategic direction. The economic activity was researched and implemented in the previous report as SMARTHEALTH near the vicinity of Prime Medical Center to help the employees get healthcare services near them related to different cuts, abrasions, abdominal pains, and minor burn issues. The immediate medical attention will be available to the community as a result of this imitative without appointment. This is why the cost-benefit analysis of SMARTHEALTH will significantly important to improve the performance of emergency department. 

Potential Opportunities and Risk Associated with the Initiative

The costs of infrastructure and development are estimated to be low. The cost benefit analysis CBA will contain the comparison of the initiative and its benefits and costs associated in monetary terms (Gilbert, 2019). Large capital development projects mostly use CBA technique in healthcare organizations. There are thousands of workers from various companies and around 3000 locals. The target population is almost 30,000 workers. The project’s cost is estimated to be around $400,000 mentioned in the previous report; these expenses are likely to cover costs such as building the PMC new rooms, counter, buying tools, equipment, and furniture, etc. There will not be a significant land cost because the Center will be built and maintained within PMC’s premises. The financial arrangement will be done through applying a bank loan for almost $200,000. This will enhance the revenues with almost 400 new patients ‘visiting per week that will pay an average $200 consultation fee. This will allow amazing revenue benefits for the five years. Moreover, the opportunity is there to collaborate well with other providers in the area to avoid working in isolation. The professionals should ensure that they must obtain the maximum value by using and obtaining funding without discounting the opportunity cost. The meaningful small data can help the organization in the early phases to make the best and wisest decisions. The use of digital healthcare tools and AI Artificial Intelligence can help to improve the patient’s satisfaction. Creating balanced teams including human factor inputs will also help the hospital to communicate goals in an effective manner to gain sustainable competitive advantage. The presence of only one more medical Centre within a few kilometers ensures that the company will have a wider money and financial advantage in terms of serving and attracting several new and old customers. However, one big risk is the hospital-acquired phenomena if the cleanliness is ignored in the organization. Hacked medical devices can also create data-related and financial losses if network security mechanisms are not put in place. 

NURS FPX 6008 Assessment 2 Attempt 2 Developing a Business Case EZ

Since healthcare costs are rising these days, the present financial situation of employees and patients today reveals high medical costs. Leaders are called to make new changes and implement models to help curb healthcare costs. This is the reason this workplace health program can help employees adopt better lifestyles. Mounting evidence suggests that workplace-based initiatives of healthcare facilities expansion can take an integrated approach to reduce health harms and threats. Moreover, the ever-increasing healthcare insurance premiums and hospital services need to be constrained (Lee, 2020). This initiative helps to dig deeper into the key mechanisms in healthcare spending and will reduce administrative expenses. Moreover, in the absence of good medical clinics and hospitals in the area, the overuse and needless care accounts for many deaths of workers and contribute to millions regarding healthcare expenses. This huge problem of employees’ heath with respiratory problems and injuries can reduce with PMC initiative. Moreover, the identification stage is intended to produce a detail of associated costs and advantages. The potential for earning higher incomes has driven faster development of rules and policies for economic evaluation of healthcare initiatives. The challenge is to effectively know that opportunity cost of the service interventions. However, such an economic initiative related to high-risk patients and intensive care units may become more economically burdensome for the PMC. While discussing the financial risk assessment, there are some risks associated with hospital’s procurement activities. The financial ratios were calculated which show no risks associated with corporate performance of the newly formed organization. The company can fulfill the current obligations through its liquid assets. Moreover, the risk analysis shows that the competitor’s retail health clinic was also situated around 7 kilometers in the supermarket. That helped customers to buy groceries and take care of their medical needs. However, SMARTHEALTH provides larger number of treatments and scan facilities to provide excellent and timely care. However, this type of rushed and speedy healthcare endeavors can often be prone to more risks and misdiagnosis. 

Table 1 (Impact Values)

EventSeverity 
Delay or Lag Significantly low 
High costs Low risk
Public loss Medium risk 
Financial distress and bankruptcy Medium to high 

Ethical and Culturally Sensitive Solutions That Address the Risks Associated with an Initiative

Some non-insured patient and some elderly people who dislike insurance due to cultural and religious reasons, the volume of unpaid medical bills increase over time and this can also raise the costs of the new organization. The issue can significantly increase the hospital re-admission and can also make the PMC Center bankrupt in a few years. In the US, the expansion and widespread implementation of insurance coverage for elderly adults is controlled by the Affordable Care Act of 2010(Mihalopoulos et al., 2020). Using the ERM Risk Management approach, the leaders can monitor and control and analyze risks. Risks can also be evaluated by looking at financial statements and the prediction of the bankruptcy or organizational performance (Resio et al., 2018). The following table shows that risks associated with the initiative. 

This means that the organization should develop administrative cavities to accurately predict the risks and turn them into favorable opportunities. The hospital can remain ahead of the game if it deploys and plans culturally sensitive and ethical solutions to address the risks associated to ensure the future economic security of the organization (Peer at al., 2011). Cost can be high according to Table 1 and the chances of hospital’s services terminated are also high. Through culturally competent and ethical healthcare policies, there is a need in increasingly diverse organizations to reduce racial and ethnic disparities (Mihalopoulos et al., 2020). This means that all the patients must be given equitable access to all the resources and nurses should also increase their cultural competence to improve current initiatives. The promise of cultural competence is that it helps to improve the cultural education or professionals to reduce lower satisfaction and equip all employees with strong English skills. Reducing linguistic barriers and understanding customs, beliefs, and values of professionals of various racial and ethnic backgrounds and social groups can reduce the likelihood of conflicts, as a result, reducing turnover costs. 

Based on the risks provided in the earlier section of the report, the ethical solutions include the ethical practice of telling the patient families and friends and coworkers to avoid too many hospital visits whenever possible. Ensuring hand and equipment hygiene will allow nurses to avoid this issue; skin and oral care will also reduce this risk. Fortunately, the issue of hacked medical equipment can also be avoided using some protection techniques such as tamper-resistant fasteners and potting compounds to disallow the physical access to the devices. 

NURS FPX 6008 Assessment 2 Attempt 2 Developing a Business Case EZ

Recommending self-care and follow-up visits to physicians can help pateints to extend beyond congruent attitudes and behaviors and enable them to work positively in a cross-cultural situation. Therefore, using culturally-competent techniques can reduce ethnic disparities and linguistic barriers through education and training can change the costs of next five years. Moreover, ethical behavioral changes can lead to appropriate services give to minority groups’ employees to achieve better health status. The quality healthcare outcomes will increase revenues, economic benefits, and mutual respect (Lee, 2020). 

Economic Costs and Benefits of a Proposed Initiative over a Five-Year Period

We performed a cost benefits analysis of the new healthcare initiative by taking into perspective the 5-years horizon of the new organization. The primary goal was to find the net financial advantage and cost over five years, whereas, the secondary benefit is to determine whether the total benefits outweigh the total costs in the excel sheet (Jennings, 2011). The implementation of the new healthcare initiative in the PMC shows that there has been a significant positive financial return on the investment made lately by the healthcare organization. 

The excel data shows that the total costs of the new healthcare initiative for the current year as well as for the next five years is expected to be a total of $              515,559.33. Moreover, on the estimated average of 400 new patients paying $200 per week, the total benefits or revenues earned by the organization would amount to $21,939,684.51. These costs also included changes in infrastructure and software purchases and periodic training costs of professionals. The analysis shows that the benefits expand hugely compared to costs. Therefore, the total benefit overweighs costs by the amount of $         21,424,125.18. This means that over the five years period, a significant benefit over these investments will be obtained. This evaluation criterion has also been advocated by researchers like Gilbert (2019) for lowering the costs of PMC and to support the financial and economic aspects of the initiatives. The study states that the purposeful intention of decision-makers for reducing costs of the healthcare system will help to make better connections between stakeholders and will solve complex language and economic issues. 

Moreover, the salaries costs of nurses and managers also show that the starting salaries of nurses were $28.11 an hour or around $5000 per month. Moreover, the salaries of hospital managers and leading individuals are around $49563 per year. The construction and setting up of the new hospital would cost around $400,000. The hospital would also buy some new furniture like tables, chairs, and cupboards and other furniture items. The revenues are broken down in the following way: (Medicaid 12.8 and Medicare 21.8%+Care earning 66.5%). This includes in-patient revenue with the number of beds occupied. This also includes the patient registration and verification; any claim submissions and reimbursements.  

NURS FPX 6008 Assessment 2 Attempt 2 Developing a Business Case EZ

The risks and opportunities involved were observed in the cost benefit analysis. In the five-year plan, the estimated capital cost includes minor construction costs and the cost of purchasing furniture. In the current year, it has been $400,000. The utilities such as electricity, gas, and the Wife cost are also included in addition to other operating costs. The observations are based on the national average recruitment incentives, as the salaries of full-tie employed physicians are estimated to be 800,000 for the first year. However, each employee gets an annual increment that also raises their salaries and the overall salaries expense of the organization each year. Each year, new staff is hired and their salaries also raise the overall expense. The analysis shows that the present value of the total costs over the 5-year period is estimated at $ $515,559.33. Moreover, the benefits part is based on the increase in the revenues due to rising customers each year. Almost 400 patients per week are entertained by the healthcare system per week. Therefore, $250,000 is the estimated value of the increase in company’s revenue for the first year and so on as given in the appendix. Therefore, the analysis of the overall positive net benefit shows that the new healthcare initiative is economically viable and fruitful and will earn more revenues in the successive years. In addition, some knowledge gaps exist such as marketing and non-financial costs and a positive patient experience that is not discussed in the analysis.

Ethical and Culturally Equitable Ways of Keeping Costs under Control

Since the healthcare system is in a dire need of change and improvement, the transformation can only happen through applying and following ethically and culturally equitable strategies to keep costs under control. The language interpretation can be a stepping stone and a starting strategy which can include gap analysis of cultural issues like race, language, and ethnicity and using tools to embed language interpretations. This also involves providing compliance-related and regulatory trainings and hire subject matter experts to improve health equity (Betancourt, 2014). This can cut costs of the organization by 50% or more and can save the organization millions per year. Improving language access through “Martti” system can remarkably improve relationships of nurses with patients and can provide robust language access to reach to more deaf and weak-in-English people. Investing in technological solutions can help to improve health equity through ethical transformation and cultural competence. 

References

Betancourt, J. R., Corbett, J., &Boundary, M. R. (2014). Addressing disparities and achieving equity: cultural competence, ethics, and health-care transformation. Chest145(1), 143-148.

Gilbert, G. L., &Ker ridge, I. (2019). The politics and ethics of hospital infection prevention and control: a qualitative case study of senior clinicians’ perceptions of professional and cultural factors that influence doctors’ attitudes and practices in a large Australian hospital. BMC health services research19(1), 1-10.

Jennings, B., & Morrissey, M. B. (2011). Health care costs in end-of-life and palliative care: the quest for ethical reform. Journal of Social Work in End-of-Life & Palliative Care7(4), 300-317.

Lee, D. (2020). Impact of organizational culture and capabilities on employee commitment to ethical behavior in the healthcare sector. Service Business14(1), 47-72.

Mihalopoulos, C., Le, L. K. D., Chatterton, M. L., Buchholz, J., Holt-Lusted, J., Lim, M. H., & Engel, L. (2020). The economic costs of loneliness: a review of cost-of-illness and economic evaluation studies. Social Psychiatry and Psychiatric Epidemiology55(7), 823-836.

Piper, L. E. (2011). The ethical leadership challenge: Creating a culture of patient-and family-centered care in the hospital setting. The Health Care Manager30(2), 125-132.

NURS FPX 6008 Assessment 2 Attempt 2 Developing a Business Case EZ

Resio, B. J., Chiu, A. S., Hoag, J. R., Brown, L. B., White, M., Omar, A., … & Boffa, D. J. (2018). Motivators, barriers, and facilitators to traveling to the safest hospitals in the United States for complex cancer surgery. JAMA network open1(7), e184595-e184595.

Appendix

CostsCurrent Year (CY)CY +1CY +2CY +3CY +4CY +5Total Costs
        
 Construction and furniture 400,000 
 Salaries Expense  800,000810,000  810,000825,000 900,000 101,000  
 Utilities cost  40,00041,000 42,000 43,000 42,000 44,000  
 Other operating costs 210,000  240,000250,000  266,000290,000 310,000  
        
        
        
Total Costs (Future Value)$     400,000.00 $        20,000.00 $        25,000.00 $     20,000.00 $       30,000.00 $      28,000.00  
Total Costs (Present Value)$     400,000.00 $        19,607.84 $        24,029.22 $     18,846.45 $       27,715.36 $      25,360.46 $              515,559.33 
blank row       
BenefitsCurrent Year (CY)CY +1CY +2CY +3CY +4CY +5Total Benefits
        
 Revenue Increase$250,000$   3,840,000.00 $3,840,000.00 $ 3,940,000.00$ 4,840,000.00  
   (Medicaid and Medicare 34.6%+Care earning 66.5%)      
        
        
        
        
        
Total Benefits (Future Value)$ 3,840,000.00$   3,840,000.00 $   3,840,000.00 $3,840,000.00 $ 3,840,000.00$ 3,840,000.00  
Total Benefits (Present Value)$ 3,840,000.00$   3,764,705.88 $   3,690,888.12 $3,618,517.76 $ 3,547,566.44$ 3,478,006.31 $         21,939,684.51 
blank row       
Present Value Discount Rate2%      
PV Denominator1.001.021.041.061.081.10 

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