Odyssey Health Care Harvard Case Solution & Analysis

In the year 1995, Dick Burnham and David Gasmire formed the company named Odyssey HealthCare.The company is operating in the hospice sector. This industry differs slightly from the traditional healthcare providing companies. The main source of income forthe company is throughproviding healthcare and counseling services to the individuals who are suffering from terminal illness and have alife expectancy of not more than six months.
In the recent years, the hospice industry has grown rapidly.In order to make the patients happy and comfortable, the families of the patients hired the hospice companies to motivate and encourage the patients. In addition to these trends, the government of US and congress is also in favor of this industry and have provided various benefits to these companies. Despite the favorable operating conditions, there are many strict health and safety laws and regulations imposed on the hospice companies.Adherence to these laws and regulations is very critical for the success of the companies.
Since the incorporation of the company,it relies heavily on both organic and inorganic strategies of growth. The company has acquired many smaller healthcare institutions along with the strategies of organic growth such as expansion to other parts of the US. On the other hand, the management of the company and its founders have great experience and expertise in managing the operations of hospice companies. Burnham has great experience in this industry as he was connected with one of the biggest healthcare companies in the US named BaxterTravenol Laboratories.
After the incorporation of the Odyssey, the management has conducted various financing rounds in order to maintain the efficiency of the operations.Finance is the backbone of almost all the companies, same is the case for Odyssey.In order to expand the operations and maintain the quality of service, it was very important for the company to invest appropriate level of funds in its operations.
Substantial investments were made from the various venture capital firms.The investors have also seen great future prospects of the company which force them to invest in Odyssey. The main investors of the Odyssey include Three Arch, Weiss Peck & Greer, Oak Investment Partners, Highland Capital Partners and Lexington.
Despite the favorable growth prospects, there are many challenges and difficulties which all the companies in the industry are facing. The main challenges can be regarded as the frequent intervention of government in the operations, frequent changes in the laws and regulations and increasing competition. The ability to attract volunteers is also presenting significant challenge for many companies.
In order to further increase the revenues and expand the operations, the senior management of the company is considering various alternatives in which initial public offering is of major importance. Burnham is critically evaluating the pros and cons of the IPO of Odyssey.
Problem Statement:
The various strict laws and regulations represent the major problem for the Odyssey. It is highly likely that the change in government or governmental policies will result in significant alterations in the operating and compensating policies which could affect the level of returns of Odyssey..............................

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