Mannor Memorial Hospital

We recommend that Manor Memorial Hospital (MMH) add gynecological services to their Downtown Health Clinic (DHC), with or without the addition of a new competitor in the area. This alternative is estimated to generate the highest net income, -$100,316, as opposed to the other alternatives: doing nothing, expanding hours, or both expanding hours and adding the gynecology. With the gynecological services, a predicted 2,000 additional visits per year can be expected to further enhance chances of achieving the goal of becoming a self-supporting firm three years after opening. The gynecological services should also increase the amount of referrals to the hospital due to increasing patient service by 2,000 visits. Another major benefit of adding this service is that DHC will gain a competitive advantage against current competitors who do not offer gynecological services (Exhibit 4). They will also benefit in the increase in the average contribution per visit. This will be $8.63 greater than choosing the option to change nothing. In addition to the value in obtaining a good financial standing, DHC expressed importance in their image in the community. Adding gynecology will benefit the community and contribute to their image because 60% of the people in a 5-block radius are female (Exhibit 3). In the last year, women made up majority of visits to DHC at 70%.

The market capture rate, 39.38%, currently tells us that there is good potential for growth in the area. DHC should postpone extending their hours and the added costs of doing so because there is a strong enough market with the current hours. Along with a potential increase in the population, we can assume that adding gynecology will only add to the growth DHC can expect. By holding off on increasing hours, DHC can see if the competition becomes a risk to losing patients due to competitive hours and can consider extending their hours down the road.