Asanate Hospital Harvard Case Solution & Analysis

Introduction

The hospital has been regulating itselffor forty years and it is a not-for-profit organization. Hospital has an excellent range of doctors and specialists which give thehospital a good reputation in the city, which serves 22000 patients annually and generates 378 million inrevenue. The hospital is governedby the board of the directors. The directors handle its pricing strategies, such as for the maternity ward of the hospital and this task is given to Mr. Young who is the intern in the hospital and will be leaving in a couple of weeks.

Young has to consider in detail, the cost of the maternity ward, including maternity ward overhead cost, labors cost and employees’ salaries. Young has to consider allocation factors of cost to allocate the cost according to given task to thedistribution of the expenseof the Activity-based Costing which is a costing technique for overhead cost. As per task, Young has to choose a suitable and reasonable pricing strategy for the hospital. Mr. Young has to consider the Strength, Weakness, Opportunities and Threats to make theright decision in order to devise a proposal of pricing strategies method.

Answer of Question 1:

SWOT Analysis:

Strengths:

These are some of Asante hospitals’ strengths taken from thecase are given below:

  1. The Asanteis atop ranked hospital.
  2. Another point is that it has 100 percent of its funding from theprivate foundations which gives it a benefit to operate loan-free.
  3. Privacy is a symbol of luxury and Asante offers a vacant single room per patient for an additional fee. This justifiesAsante’s higher prices, which could be acceptable by its high quality level of care, as insurance providers often inspected and debated its long bills before mothers could be discharged.
  4. Seventy percent of Asante’s patients were covered by private health insurance, which typically reimbursed the patients upto70 percent of the cost of care received. The procedure of billing at discharge could be devastating for new parents, who were often already nervous about their new baby.

Asanate Hospital Harvard Case Solution & Analysis

Weakness:

These are some weakness which makes the hospital to struggle.

  1. Hospital doesn’t have any support from the Government unless Government spending on health care comprised less than half of total health expenditure.
  2. Asante’s not-for-profit model meant that it needed to continue independently any surplus from one department is used to offset care in another department.
  3. Management had a continuing struggle with insurance providers to obtain full payment for Asante’s superior level of care and patient comfort. Asante included every supply item on the invoice, which was one reason for Asante’s lengthy patient bills. Insurance providers naturally appreciated low cost but also preferred bundled pricing because of its simplicity

Opportunities:

There are some opportunities which have to be considered by the hospital for their wellbeing in future.

  1. Patients pay from the combination of the insurance and their pocket. Otherwise, they apply for the Asante Patient Welfare Program, which is jointly funded by the foundation’s donations and includes any hospital surpluses.
  2. The cities wealth was higher than that of any other area in the country. In particular, the city’s middle class had grown rapidly, which meant that many residents could afford levels of health care their parents had never imagined. The buying power of the city residents had increased, only 20 percent of the country had private health insurance coverage which is good for the health care industry..................

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