Question

We have been given a generous grant by an anonymous donor. The terms of the grant stipulate that the money can be spent to forward the “spirit” of the York College Medical Center’s mission, especially if it benefits the staff and community as a whole. No other specific instructions were given, meaning that as a community, we can use the money as we please. The Board of Directors have decide on two options that employees must vote on: Option 1: The money can be distributed such that EVERY employee gets ALL of the following: A guaranteed $5,000 raise every year for 3 years, for a total of $15,000, A minimum of 4 weeks paid vacation for all employees Up to 2 free meals per day in our fabulous cafeteria (it’s a good cafeteria) Option 2: All the money goes into a trust that will be used to treat patients for FREE. This includes all surgeries, visits, therapy etc. (Just like St. Jude’s Children’s Hospital). The only catch is, the patients must reside in Queens, NY, unless they are an employee, in which case residency is not an issue. (ALL employees and their dependents will get free system wide care as well) Which option will you vote for and why? You must justify your reasons. Do this in a minimum of 5 paragraphs.

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Answer 1

Why should be anything given for free? If you are providing service, then a fair amount should be charged for that service. That is the main reason I would not like to go for the Option 2. Now, there is a catch here. The catch is that free service is also received by the employees and the family members of the employees.

Due to this catch now, option 1 and option 2 can be compared on monetary benefits. Option 1 provides defined benefit while Option 2 is contingency claim. Option 2 pays only if you are admitted and require a treatment. What if you do not require a treatment at all? In that case, does your family require treatment?

So, we need to consider the probability of using the hospital service by you and your family. The benefit you get from Option 2 will also depend on number of family members, their age, their health. If you have family members with age above 60 then probability of using hospital service goes up. Say, you are single and healthy and young, then the probability is pretty less that you get to use hospital service frequently.

Due to the reason stated above utility of Option 2 will be different depending upon different factors. Size of family, age of the family members, health of the family members. So, this will provide different level of benefit to different employees.

In contrast, Option 1 is clear, consistent. Option 1 clearly mentions the benefits one employee gets out. Due to all these reasons I think Option 1 is much better alternative than Option 2.