Consulting Team

Victoria Coleman - Senior Clinical Analyst

Jesse Fenton - Senior Project Manager
Adam Mayer - Senior Financial Analyst

Scarlet Healthcare System

Womens Health Services

 Evaluate Womans Health Services Department

External
Internal
Identify Key Issues Facing the Department
Present Recommendations to Address the Departmental Issues Moving
Forward
Discuss the Impact of Recommendations
Explain a Preliminary Roadmap for Success

External Evaluation

160,000+
People Located in the County

50%

Female Population with

15% over Age 65

+9.7%
Scarlet Hospital
Market Share of
County Growth

Source: Ohio State University Case Competition, (2016)

16General Hospitals

Located in the Metropolitan Area

Hospitals Providing Specialized

Obstetric Services

Internal Growth Evaluation

4.19%

3.90%

Womans Health Department Production Growth

Production (Hours)

86,000
85,000

85,629

84,000
83,000
82,000
81,000

82,182

80,000
2013

2014

Calendar Year
Source: Ohio State University Case Competition, (2016)

Source: Ohio State University Case Competition, (2016)

Internal Financial Evaluation

Womans Health Department

Revenue
Net Revenue
Expenses
Net Operating Margin
Net Operating Margin %
Source: Ohio State University Case Competition, (2016)

$
$
$
$

2013
2014
Percent Change
11,058,956.00 $ 12,911,416.00
16.75%
4,773,216.00
$4,753,507.00
-0.41%
4,417,675.00 $ 4,656,640.00
5.41%
355,541.00 $
96,867.00
-72.76%
7.40%
2.00%
-5.40%

Internal Financial Evaluation

Labor and Delivery Service Line
Revenue
Contractual
Net Revenue
Expenses
Net Operating Margin
Source: Ohio State University Case Competition, (2016)

Source: Ohio State University Case Competition, (2016)

$
$
$
$
$

2013
6,665,487.00
3,684,026.00
2,820,311.00
2,096,835.00
723,476.00

2014
Percent Change
$ 7,737,765.00
16.09%
$ 4,378,796.00
18.86%
$ 3,196,344.00
13.33%
$ 2,188,917.00
4.39%
$ 1,007,427.00
39.25%

Key Issue #1 - Contractual Adjustments

Key Issue #1 - Contractual Adjustments

Source: Ohio State University Case Competition, (2016)

Source: Ohio State University Case Competition, (2016)

Recommendation #1 Preferred Provider Partnership (PPP)

Your Trusted Womens Healthcare Provider

Target Market for Partnership

73k+

Citizens Employed By
the Top 10 Companies
in the County

Source: Columbus 2020

Key Issue # 2 Increase In Other Expenses

Key Issue # 2 Increase In Other Expenses

4.1865

DAYS
Patient Average for 2014

Source: Ohio State University Case Competition, (2016)

4.1788

DAYS
Patient Average for 2013

*Does not include payroll expenses

Recommendation #2 Implementation of LEAN and SIX SIGMA

Financial Impact of Recommendations

Projected Financial Impact of Recommendations

Net Operating Margin (dollars)

$7,000,000.00
$6,000,000.00
$5,000,000.00
$4,000,000.00

Maternal Child Service

Line

$3,000,000.00

Labor and Delivery

Service Line

$2,000,000.00
$1,000,000.00

Woman's Health
Services Department

$-

-$1,000,000.00
-$2,000,000.00
2013

Source: Ohio State University Case Competition, (2016)

2014

2015

2016
Year

2017

2018

2019

Departmental Contribution

Scarlet Healthcare System

Womens Health Services

Scarlet Hospital
2014
0.04%

1.75%

2019

Clinical Improvement and Business Partnership Road Map

Research & Develop
Evidence Based
Standard Process of
Care

Train Clinical and Non

Clinical Staff on New
Standard Care Model

Implement Evidence
Based Standard Care
Model

Evaluate Necessary
Process Improvement

Go Live with Offered

Services

Evaluate and Adjust

Estimated Goals

Decrease Expenses
Diversify Payor Mix
Hardwire Evidence Based Clinical Practices
Stakeholder Approval
of Provider Affiliation

Negotiate Contract
Terms of
Reimbursements for
Board Approval

Scarlet Healthcare System

References
Belk, D., & Belk, P. (n.d.). True Cost of HealthCare. Retrieved March 27, 2016,
from http://truecostofhealthcare.net/hospital_financial_analysis/
Employer Costs for Employee Compensation news release text. (2016,
March10). Retrieved March 28, 2016, from
http://www.bls.gov/news.release/ecec.nr0.htm
Gallagher Integrated. (n.d.). Retrieved March 28, 2016, from
http://www.integratedhealthcarestrategies.com/HealthcareConsulting_WhatsImportant.aspx
Healthcare Consultant Salary. (n.d.). Retrieved March 28, 2016, from
http://www.payscale.com/research/US/Job=Healthcare_Consultant/Salary

Kolata, G. (2015, September 07). What Are a Hospitals Costs? Utah System Is
Trying to Learn. Retrieved March 28, 2016, from
http://www.nytimes.com/2015/09/08/health/what-are-a-hospitals-costs-utah-system-is-trying-tolearn.html?_r=0

References
Lucas, V. (2011). Future Trends in Womens and Childrens Health Business Development White
Paper. Womens Health Management Consultants. Page 7.
Pojasek, R. (2003). Lean, Six Sigma, and the Systems Approach: Management
Initiatives for Process Improvement. Retrieved March 28, 2016, from
http://isites.harvard.edu/fs/docs/icb.topic747719.files/Supplemental ReadingFolder/LeanSix
Sigma.pdf

Strategy. (n.d.). Retrieved March 28, 2016, from

http://www.huronconsultinggroup.com/Expertise/Healthcare/Strategy
Ohio State University Case Competition. (2016). Case: Scarlet Hospital System. Ohio State University
Masters In Health Administration Department. Columbus, OH. Pages 1-11.

Jesse Fenton Senior Project Manager

Adam Mayer Senior Financial Analyst
Victoria Colemen Senior Clinical Analyst

Appendix: Clinical Improvement Gantt Chart

Appendix: Preferred Provider Partnership
Appendix: Payor Mix
Appendix: Internal Growth
Appendix: Patient Days
Appendix: Maternal Child Service Line
Appendix: Labor & Delivery Service Line
Appendix: Financial Impact on Maternal Service Line
Appendix: Departmental Contribution to Scarlet Hospital

Thank you.
2016 Precision Consulting Group. All rights reserved. Precision Consulting Group is not a registered trademark in the U.S. and/or any other countries. The information herein this document is for
informational purposes only and represents a fictional case competition presented by The Ohio State University. Because the contents of this presentation is for educational purposes only and do not
represent actual changing market conditions, it should not be interpreted to be a commitment on the part of Precision Consulting Group, and or Jesse Fenton, Adam Mayer and Victoria Coleman, cannot
guarantee the accuracy of any information provided in this presentation.

Appendix

Appendix: Payor Mix

Source: Ohio State University Case Competition, (2016)

Appendix: Internal Growth

Source: Ohio State University Case Competition, (2016)

Appendix: Patient Days

Source: Ohio State University Case Competition, (2016)

Appendix: Maternal Child Service Line

[1] Predicted using departmental average percent increase from 2013 to 2014
[2] Predicted using department average of 2.00% of Total Revenue from 2013-2014
[3] Predicted assuming department can reach 60% of Total Revenue in 5 years. Starting at 68% in 2015 and decreasing by 2% annually. Source: http://truecostofhealthcare.net/hospital_financial_analysis/
[4] Predicted using service line average percent increase from 2013 to 2014
[5] Predicted using national healthcare average of 28% of salary Source: http://www.bls.gov/news.release/ecec.nr0.htm
[6] Predicted using national average of 2.9% increase/year starting in year 2 (2016). Source: http://www.nytimes.com/2015/09/08/health/what-are-a-hospitals-costs-utah-system-is-trying-to-learn.html?_r=0
[7] Assuming hospital allocations stay consistent at 25% of departmental expenses
Note: Highlighted sections are line items that are effected with stated recommendations

Appendix: Labor and Delivery Service Line

[1] Predicted using departmental average percent increase from 2013 to 2014
[2] Predicted using department average of 2.00% of Total Revenue from 2013-2014
[3] Predicted assuming department can reach 50% of Total Revenue in 5 years. Starting at 58% in 2015 and decreasing by 2% annually. Source: http://truecostofhealthcare.net/hospital_financial_analysis/
[4] Predicted using service line average percent increase from 2013 to 2014
[5] Predicted using national healthcare average of 28% of salary Source: http://www.bls.gov/news.release/ecec.nr0.htm
[6] Predicted using national average of 2.9% increase/year starting in year 2 (2016). Source: http://www.nytimes.com/2015/09/08/health/what-are-a-hospitals-costs-utah-system-is-trying-to-learn.html?_r=0
[7] Assuming hospital allocations stay consistent at 25% of departmental expenses
Note: Highlighted sections are line items that are effected with stated recommendations

Appendix: Womens Health Service Lines

[1] Assuming hospital allocated expenses stay at 25% of departmental expenses

[2] Assuming hospital allocated expenses stay at 25% of departmental expenses
Note: Above projections include assumptions made from each service line within the Woman's Health Department

Appendix: Financial Impact on Maternal Child Service Line

Source: Ohio State University Case Competition, (2016)

Appendix: Departmental Contribution to Scarlet Hospital

[1] Predicted assuming Hospital follows similar yearly growth in Hospital Net Revenue (9.06%) as seen from 2013 to 2014
Source: Ohio State University Case Competition, (2016)