I. Introduction

Columbia Memorial Hospital is a 300-bed acute care hospital that employs 160 staff physicians. Columbia is one of 75 hospitals owned and operated by Health Services of America, a for-profit, publicly owned company. In addition to inpatient and outpatient services, Columbia operates an emergency department within the hospital and a stand-alone walk-in (urgent care) clinic two miles from the hospital and near a major shopping mall. Due to its superior facilities, outstanding staff and reputation for quality, individualized patient care, Columbia has remained highly profitable despite the presence of two other acute care hospitals serving the same population. 1,200 of the 8,000 walk-in clinics in the United States are affiliated with hospitals. These clinics enable patients to be examined and treated by urgent care physicians on evenings, weekends and without an appointment. Additionally, patient costs, which average between $60.00 and $200.00 per visit, and copayments associated with walk-in clinics are considerably less than costs associated with emergency room visits. Ten years ago, there were five walk-in clinics throughout the city. Now, only three clinics remain and none appear to generate significant profit. While the Columbia clinic has the capacity to see up to 85 patients per day, an average of only 45 patients are actually seen each day.

II. Statement of the Relevant Issue

Columbia’s Chief Executive Officer (CEO) Mike Reynolds has concerns regarding the financial soundness of the walk-in clinic and questions whether the clinic should remain open or cease operations.

III. Strategies/Alternative Strategies

CEO Reynolds informed Columbia’s Chief Financial Officer (CFO) Brent Williams of three potential scenarios regarding the walk-in clinic: 1) the clinic could be closed;

2) the clinic could