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Carson Manor

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MKE402 CASE STUDY
CASE6-3 Carson Manor

1. Identification of Problem:

-Key issues/problems

Carson Manor is a senior home that has been open for many years. There operation is to provide housing for the elderly that require the care and supervision of nurse’s. The key issue of the Carson Manor study is to reduce cost on a per-bed basis to be in-line or near the state average. Currently Carson Manor costs are approximately 14 percent higher than state averages on a per-bed basis.

-Subsidiary issues

Subsidiary issues include; finding goods and services at minimum cost that will be consistent with desired quality, delivery timing, and reliability. Carson Manor has had issues with measuring and controlling costs. Without change, nurses will not be able to provide good quality care for their patients and patients will receive unequal care. The increasing levels of care required by Carson Manor residents have a major influence on costs.

2. Situational Analysis

- Relevant Factors
* Average cost of per-bed costs within the state
* Identification of problem areas in Carson Manor that could use strategies made up by the city to help productivity (ex. contract management services)
* Review of administration, staffing, and organizational design and management systems.
* Resident care assessments (what materials are needed, what requirements/skills should the nursing staff have)
* Develop comprehensive recommendations for improved operating systems
* Develop comprehensive recommendations to lower purchasing costs
* Find consulting companies within the area with relevant experience
* Budget
* Patient classification system

-Quantitative Analysis
*Cost on product
* Cost on staffing Carson Manor
* Cost on outsourcing
* Number of staff members
* Patient population

-Qualitative Analysis
* Carson Manor quality of service
* Outsourcing service quality
* Management strategy of Carson Manor Staff
* Operational Strategy
* Management of outsourcing operations
* Patient level of care
* Relationship between firm and the sponsor (the city of Winston)
* Hired nurses and staff relationship with patients

|(Scale from 1-5) |Patient Care |Clarke-Hamilton |Standardcare |
|Methodology |2 |4 |3 |
|Anticipated Reduction & |3 |5 |4 |
|Implementation Cost | | | |
|Experience |4 |4 |5 |
|References |1 |5 |3 |
|Service Cost |5 |4 |2 |

3. Evaluation of Feasible Alternative Solutions

-Alternative 1: Patientcare

Advantages:
-Lowest bid of the proposal is $35,000.
-Analyze staff and cost.
-Fully estimated the sum of all proposed operating deficiencies.
-Provide assistance with implementation if required.
-Claim to have rich experience on management.

Disadvantages:
-The cost would be at least $700,000 if implemented.
-The method they provide is lack of details and overly simple.
-Patientcare are not professional enough; the quality of the service doesn't contend with other two operators.
-The cost is hard to manage.
- References were impractical or nonexistent

-Alternative 2: Clarke-Hamilton

Advantages:
-Benefit to cost ratio ranges from 3 to 1 all the way to 30 to 1.
-Experience in implementing two different types of work standard/ patient classification systems and MIS systems.
-Extensive experience in specific areas, mainly in hospitals.
-Pay attention to reviewing each step.
-Lower price than Standardcare.
-References accredited savings
-References were satisfied
-Are sure to include city and Carson Manor in steering committee administration; more eyes over seeing the operation

Disadvantages:
-Has a higher price than the proposal from Patientcare.
-Steering committee formed in order to oversee the operation of Clarke-Hamilton may issue the city and Home with another cost (overtime?).

-Alternative 3: Standardcare

Advantages:
-Anticipated savings are to be in the order of 8 to 10 percent of total expenses, approximately 1.1 million in the case of Carson Manor.
-Have extensive background in similar situations.
-Extensive list of 15 facilities either completed or in process.
-Manage Henford Lodge---150-bed restorative care program.
-Owns or manages 2400 nursing home bed and units in this state and Florida.

Disadvantages:
-Such a large operator of nursing homes it would be easy to overlook problems within Carson Manor; meaning that they already have a lot of there plate. They may not be able to give Carson Manor the attention they need.
- May be over qualified
- Anticipated savings are not concrete; may be misleading
- Have one reference but due to high price no others were looked into. One reference doesn't make them accredited enough
-The price they are asking for is too high for Carson Manors budget

Recommendation:

-Alternative 2, Clarke-Hamilton

-Justification or Recommendation
In this case, the most important concerns to Carson Manor are the quality of service they provide and their reliability. Clarke-Hamilton has excellent reviews of nursing care. The savings they promise are high and their services are offered at an expectable price. Along with these benefits Clarke-Hamilton has a steering committee that they plan to implement that will keep the sponsor involved. It allows the city and Carson Manor management to have an input on the new systems that will be put in place. Standardcare is a poor choice because of its large operating system of nursing home, which makes it easy for them to overlook problems within Carson Manor. Their prices also exceed what Carson Manors budget entails. Although Paitientcare had the lowest price of all 3 budget proposals their references were extremely unreliable or non-existent.
Clarke-Hamilton is the top pick in both cost and quality.

Implementation

-Plan of action -Form Steering Committee. -Oversee the implementation done by Clarke-Hamilton. -Review and revise terms of contract with Clarke-Hamilton. -Review sections. -Interviews and tour. -Identify all areas to improve. -Finalize report and present it to Steering Committee for approval.
-Consideration of cost and control issues -Increased cost from the choice of Patientcare, but decreased cost from the standardcare -Steering Committee will require more time for deliberating and working through the chain of command, which may lead to cost increased. -Gives control to the sponsor by forming Steering Committee, keeps goal on track.
-Time frame -Request report: June 9th -Pre-bid conference held in Sept. -3 proposals submitted: Nov 17th -Recommendations due in Dec 19th -Implementation and start up of Steering Committee should be done in a timely manner.
-Possible obstacles -Steering Committee doesn’t form quickly enough. -Projected sales and cost layout exceed or fall below estimate. -Time conflicts -Steering Committee may bring in too many opinions making it unorganized. -Steering Committee is inefficient.

Reference

Department of Community and Social Services
-Firm conducted operational review at Webster Regional Centre and they were satisfied with their performance. Although not totally implemented, it appeared that they would meet or surpass their estimated savings.

Webster Regional Centre Mgt.
-Talked to administrator who was satisfied with the manner in which they very professional approach with minimum of disruptions.

Regional Municipality of Gast city, Greenfield Home for the aged
-Firm performed salary review.

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