Operating margins in your hospital have been consistently below national norms for the past three years....

Operating margins in your hospital have been consistently below national norms for the past three years. Discuss the factors that might have created this situation. Discuss the ways in which you might determine specific causes. Think about how this information can inform the decision-making process in your hospital in the future.

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Expert Solution

Operating margins in my hospital has been consistently below national norms for the past three years. The factors that might have created this situation are several. First of all my hospital witnessed above average increase in expenses and costs. Secondly my hospital mainly provides core hospital services like surgery and inpatient admissions and hence the rising out of pocket expenses due to high deductible health plans has hit our topline.

The specific causes can be determined using regression analysis. We can use operating costs data and compare them against various independent variables like state of the economy, number of competitors, type of health plans for target users etc. The regression analysis will help us to determine which variables affect the operating costs of my hospital significantly.

The information thus obtained will help me to apply decision making process for my hospital in the future. Using the information I will be able to target the right set of people who will be likely to use our hospital. It will enable me to streamline our strategic initiatives to bolster both our topline as well as bottomline. I will be able to introduce measures to improve my hospital’s collection rates and improve the patient volume as well. Improvement in patient volume will be driven by better focus on target segment.

jeff jeffy answered 3 weeks ago

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