Case Study Team Charter
Case Study Name: We Care Medical Center: Allocating Costs
Team Presentation Goals:
Determine best allocation to receive the greatest benefit from a financial and customer standpoint.
Review of financial statements to ensure align with existing practices, financial goals, and organization’s mission statement.
Benefits gained outweigh the associated risks fully detailed and explained to eliminate concerns brought by the community and Board of Directors.
Transparency to the community which the facility supports.
Membership:
Research: All members will equally participate with researching material for the case study.
Presentation: Tammy Alsman has been selected to facilitate the presentation in Week 5 to the class with input from team members.
Subject Matter Expert (s): Connie, Renee, and Lisa will also participate and present as experts in the case study selected.
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Member Roles / Obligations: To attend and engage in meetings as scheduled. Perform necessary research covering the specific objectives and goals.
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Core Issues in Case Study:
Not-for-profit: transparency to community.
New orthopedic location due to routine care unit expanding absorbing now 50,000 sq feet into the existing orth unit.
Building new space to accommodate existing census while planning for future expansion in new complex design: for which there is no guarantee.
Not-for-profit organization: 0% eco development loan: $187,000 payments over 20 years: staying on target with build, generating revenue to support additional monthly payments during construction, while continuing current business plan.
Maintaining existing bonus structure with CFO cost allocation concerns for new build.
Objectives:
Describe the allocation process between the routine care and orthopedic care departments to determine net income post build and move.
Which allocation method is most appropriate to maintain sufficient net income to maintain direct and indirect expenses including current bonus payouts and future growth-related expenses (additional staffing and training for example).
Present research to Board for approval with sufficient evidence to support expansion.
Strategic Implications:
Lack understanding of allocation methods to determine most appropriate to realize most gain.
Understanding the up-front costs associated with build and move is an investment back into the business which in turn will build more profit over time.
Loss of revenue due to reduced orthopedic space.
Lack of marketing of new growth and treatment opportunities.
Lack of community and/or Board support.
Scope:
Key Interfaces:
Finance – Revenue versus Square Footage Methods: which is better financial choice.
Risk Management – managing risks to realize additional revenue generated.
HR – Managing staff, training for future growth.
Operations – CFO current cost allocation algorithms, indirect and direct expense monitoring.
Deliverables and Milestones:
Key Activities:
Benefits Gained by Solving the Problem:
Financial:
Process / Operations
Other – Non-financial or intangible:
Critical Success Factors in this Case Study:
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Key Performance Measures in this Case Study:
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