Place yourself in the position of Wes Douglas, administrator of Brannan Communit
ID: 332539 • Letter: P
Question
Place yourself in the position of Wes Douglas, administrator of Brannan Community Hospital. If the bank cancels the hospital's line of credit, the hospital will close. Assume you are preparing for the meeting with the bank. Write your goals for the meeting and how you will approach the bank's officers. Place yourself in the position of Scott Lambert, vice president of Park City Bank. Assume you are also preparing for the meeting. Write your goals for the meeting and the message you will deliver to the hospital's representatives. Managing Integrated Health Systems Shiver Jones & Bartlett Publishers ISBN 13: 978-128-4044-492 and Code Blue McDermott Health Sciences 5th edition Traemus Books ISBN: 978-0-9675072-5-5
Explanation / Answer
Hospital Administration:
The line of credit should be renwed at all costs to continue the hospital to run smoothly. The hospitals balance sheet will be the major drive of discussion with the bankers. The bankers will also be presented with minutes of the recently concluded board meeting wherein it has been approved that the hospital should expand its treatment facilities and also introduce new lobbies for cosmetic, dental, hair and skin treatments apart from physio and counselling counters.
Goals:-
(a) The hospital is having increasing profit margin Y-o-Y which shows that the hospital is increasing its profit in line with annual turnover.
(b) Annual turnover of the hospital is showing a positive growth rate even though several of the industry peers are have declining sales. It is because the hospital commands good market share in the wellness industry of the country however for the past few years there is a downtrend in sales due to establishment of complete health centres with state of art wellness and treatment facilities. The bankers should not cut the line of credit based on mere market rumors about consistent declining turnover of the hospital YOY.
(c) The hospital also is planning to expand its treatment base by incorporating new facilities like wellness centre, physio centre, counsellor cells, cosmetic wing, tricology and dermatology unit, advanced machineries and more comfortable treatment cabins. These expansion plans are in the basket and have to be modelled effectively and will be established with the hospital's recent expansion plans which has also been aproved by the board and the management.
(d) Ensure the financers that the hospital is functioning smoothly and their line of credit is not at stake at any cost. Also the line of credit has been backed by 80% collateral security whose value has also grown over the years since it has been mortgaged with the bank. Thus the bankers have nothing to be worried about.
(e) The hospital also plans to put up proposal for expansion of line of credit and also a new term loan for the fixed asset acquisition. Thus sharing minutes of the recently concluded board meeting will inturn ensure that their bank finance is safely being taken care off.
(f) Report of the recent incidences of nigeligence on the part of hospital staff and how it has not erroded the brand value of the organisation.
Bankers Viewpoint:
Recent reports in the media about the hospitals negligence incidences apart from the declining sales is a cause of concern for the financers.
(a) Reports on the incidences of hospital negligence issue being out in the nedia, how much market capitalisation of the hospital has been erroded because of these incidences.
(b) Statutory audit reports for the half year and provisional financial statements of the half year.
(c) Profit margin month wise and sales turnover ratio for the past 3 years.
(d) Steps the management has decided to infuse capital for the recent happenings which have eroded the brand value of the ospital.
(e) Report on media management and PR steps.