Abstract
This report discusses ways the open heart surgery program complies with the hospital’s mission. It will also analyze whether or not CMH, now known as Carolinas Medical Center Northeast (CMC), has sufficient infrastructure and financial resources / leverage necessary to add the program. The competitive situation among other area hospitals that could impact the decision will be described. The change in the service area required for the cardiovascular surgery service will also be explained. Alternative strategies the Board should consider before making a final decision on the possible addition of the open heart program will be examined.
Key Words: Cardiovascular, open heart surgery, coronary care

Cannon Hospital opened its doors to Concord, NC on July 26, 1937 with forty-six beds, ten bassinets, eight doctors and two patients (Swayne, Duncan & Ginter, 2009). They have come a long way since then. According to Cimino Wilson, they are now known as CMC-North-East, and have handled 12,045 surgical procedures, employed more than 4,700 employees and admitted 22,388 patients in 2011. Since its inception, thanks to the philanthropy of Cannon A. Mills, they have been a contemporary, well-equipped facility. Their mission then and now is “absolute commitment to service and clinical excellence.”
Ways the program complies with the hospital’s mission.
It was the goal of Cannon A. Mills to provide his employees with the best possible health care (Swayne, Duncan & Ginter, 2009). At the time of this case study, patients are flown to medical centers such as Duke in order to meet their open heart surgery and coronary angioplasty needs. This causes a delay in providing the critical treatment needed by some patients. According to Swayne, Duncan & Ginter, continuity of care to cardiac patients is essential to achieve the best possible outcome. This means minimizing patient transfers as well as changes in staff attending to the patients. In keeping with their mission, it would be irresponsible to not consider a program such as this one. As the population increases, the at-risk population is also projected to increase. They must address this need before it becomes a major issue, and before any lives are lost due to a delay in critical care. This program would also fix a competitive advantage instead of having to give other medical centers such as Duke additional business.
Analysis of infrastructure and financial resources/leverage necessary to add the program.
The new program consists of one open heart surgical suite for adult surgical procedures with the ability to handle 400 procedures annually. In order to offer such a program, 25 new employees would need to be added in Year 1 including Dr. Christy. By Year 3, a total of 39 new employees would be required. Ten beds currently licensed as acute care beds that are not in use would need to be designated as coronary care beds. This program would also require three ICU beds in addition to the one additional operating suite. The total projected capital cost of this program is $3,273,180. The hospital is in a financial position that would allow them to make the necessary renovations without incurring any debt. Based on the projected revenue, costs and anticipated number of procedures each year, the projected profit and loss statement for each year is shown below. OPEN HEART PROGRAM PROJECTED REVENUE AND COSTS | | | | | | | | | | | | | | Year 1 | | Year 2 | | Year 3 | | | 53 procedures | | 106 procedures | | 211 procedures | Potential revenue (400 procedures) | | | | | | | Open heart surgical procedures ($40,957/procedure) | 2,170,721 | | 4,341,442 | | 8,641,927 | | Room and board ($826/ day w/avg length of stay=9 days) | 394,002 | | 788,004 | | 1,568,574 | | Ancillaries ($3725/ day w/avg length of stay=9 days) | 1,776,825 | | 3,553,650 | | 7,073,775 | | Total potential revenue | 4,341,548 | | 8,683,096 | | 17,284,276 | | | | | | | | Direct Costs | | | | | | | Clinical Personnel | 711,793 | | 910,878 | | 1,695,457 | | Administrative Personnel | 136,565 | | 147,490 | | 159,289 | | Support Personnel | 52,764 | | 56,985 | | 61,544 | | Personnel Taxes/Benefits | 180,224 | | 223,071 | | 383,258 | | Medical Supplies | 315,947 | | 746,439 | | 1,749,771 | | Other Supplies | 15,950 | | 68,980 | | 75,445 | | Depreciation, Equipment | 243,376 | | 243,376 | | 243,376 | | Plant Operations & Maintenance | 48,087 | | 52,415 | | 57,132 | | Other Expenses-Angioplasty | 449,965 | | 534,033 | | 615,723 | | Other Expenses | 99,543 | | 99,212 | | 99,212 | | Contracted Services | 110,000 | | 134,860 | | 298,185 | | Total Direct Costs | 2,364,214 | | 3,217,739 | | 5,438,392 | Indirect Costs | | | | | | | General and Administrative | 255,966 | | 302,376 | | 416,862 | | Other Overhead | 73,200 | | 88,630 | | 175,473 | | Depreciation, Building | 43,525 | | 43,525 | | 43,525 | | Other Property, Ownership and Use Expenses | 2,036 | | 2,402 | | 2,835 | | Consultant Services | 122,740 | | 153,399 | | 154,699 | | Rowan Community Outreach | 6,183 | | 6,739 | | 7,346 | | Total Indirect Costs | 503,650 | | 597,071 | | 800,740 | | | | | | | | Total Costs | 2,867,864 | | 3,814,810 | | 6,239,132 | | | | | | | | | Net gain/loss | 1,473,684 | | 4,868,286 | | 11,045,144 |

If the projections are accurate, the revenue would be growing at a faster pace than the expenses each year. This would leave room for error in the calculation. It would also allow the hospital to rebuild the reserves used to expand the facility. The challenge would be allocating all the resources appropriately (Swayne, Duncan & Ginter, 2009, p 151).
With regards to their infrastructure, they seem to have a strong board of directors. According to Swayne, Duncan & Ginter the governing board needs to be involved in the strategic directions of the organization. Based on these meeting minutes, they seem to be very involved. There is a board chairman in place as well to moderate discussion, especially if there are any issues of conflict. From the minutes provided, the size of the board cannot be determined. Depending on the expertise on the existing board, it could be helpful to bring on an additional member or members to add to depth to the board as they attempt to expand.
Description of the competitive situation among other area hospitals that could impact the decision
The overall service category is acute care facilities with Cardiac Care Units with open heart surgery programs. There are only sixteen known facilities in the state of North Carolina. None of the existing facilities are within the CMH service area. Of the sixteen existing facilities, only one deemed Cabarrus to be in their service area. By providing this service, patients and their families would no longer have to drive to areas such as Charlotte for ongoing care. Patients may be willing to make such a trip for a one-time appointment. This travel becomes tiresome for procedures requiring multiple doctor visits, treatments and follow-up. CMH currently serves Cabarrus and Rowan counties. In the prior year, 292 patients had to commute to facilities that were 50-60 miles away. This interrupted their continuity of care. CMH has a distinct advantage over the other facilities for this particular service area. Judging by the demographics, the need is only going to increase over time. Cabarrus County also had a higher incidence of open heart surgery than was found in the state of North Carolina as a whole. There is a definite need for this treatment.
Describe the change in the service area required for the cardiovascular surgery service.
Based on the studies done on the radiation oncology program, it was found that they could potentially service six counties including Cabarrus, Rowan, Stanly, Union, Iredell and Mecklenberg. The outermost points of these counties were within sixty miles of CMH. This gave them a broader area to provide care to. CMH would now be reaching four additional counties beyond its traditional service area.
Discuss alternative strategies the Board should consider before making a “go / no-go” decision on the possible addition of the open heart program.
As the board attempts to expand the facility’s existing scope, they should consider market development by affiliating with the direct competition. This still does not prevent the service area from having to drive further for the necessary care, but it should be considered.

References
Cimino Wilson, Karen (2012). CMC-Northeast celebrates 75 years. Retrieved from http://www2.independenttribune.com/news/2012/aug/05/cmc-northeast-celebrates-75-years-ar-2493987/
Swayne, L. E., Duncan, J., & Ginter, P. M. (2009). Strategic management of healthcare organizations (6th ed.). San Francisco: Jossey-Bass.