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 organizations 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.

Member Roles / Obligations:

• To attend and engage in meetings as scheduled.
• Perform necessary research covering the specific objectives and goals.

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:

Key Performance Measures in this Case Study:

Attachments:

Team-Charter-....doc

We-Care-Medic....pdf

We-Care-Medic....pdf