Posted: March 1st, 2023

MMHA6160 week 7 assignment Capital Project Case study part 1 and 2

Capital Project Case
Study, Part 1

This
case study considers the expected costs and benefits to a managed care
organization resulting from a decision to design a centralized nurse triage
line. This triage line would assist routine primary care patients to provide
self-care and/or seek urgent care in lieu of seeking more expensive care
after-hours in the emergency room.

Summary
Jiranna Healthcare owns and operates a
268-bed hospital in the San Jose area. The hospital is Jiranna Healthcare’s
main facility and is home to more than 80 on-site specialty and surgery
clinics, employing over 5,000 staff. In addition to the main hospital, Jiranna
Healthcare has 18 satellite clinics, containing primary care services such as
pediatrics, family medicine, and geriatric health. These facilities (hospital
plus outlying clinics) serve a total enrollee population of 97,000.
Currently, Jiranna Healthcare’s
centralized call center schedules primary care appointments and handles an
average of 1,500 to 2,000 calls daily with a staff of 20. Patients routinely
have difficulty obtaining access to urgent or acute care (primary care) in a
timely fashion. Additionally, the majority of Jiranna Healthcare’s primary care
centers are unable to meet access standards in three out of four cases. These
access issues have a secondary effect on the call center, which experiences a
much higher call rate because members have to call back multiple times to find
available appointments. The existing process leads to overutilization of
emergency departments for urgent care and primary care concerns. In addition,
patient satisfaction has steadily declined as a result of the continued lack of
appointment availability.
To address this problem, there is a proposal
to implement a centralized nurse triage line, an off-site phone center that
would be staffed by registered nurses with a multitude of specialties
(including ER nurses, critical care, surgical, and even some nurse
practitioners). These nurses are able to offer callers medical advice encompassing
the treatment of fevers, wound care, and emergent conditions such as chest
pain. The nurses are trained to triage conditions to the appropriate level of
care be that at home, at an urgent care center, or at an emergency department.
The major cost impact is the increased salary
requirement for the phone center staff, which will entail approximately 33
multi-discipline employees, based on workload and enrollment data. Additional
elements of the proposal include hiring an IT specialist to manage the triage
line’s computer system, and facility renovations. The main benefit of this
proposal is projected cost reductions in patient care as a result of moving
primary care out of the expensive emergency-room setting.

Assignment
The
Capital Project Case Study, Part 2
spreadsheet provides cash flow data (costs and benefits) for the proposal.Download and save this Excel
spreadsheet, and use the information provided to complete the following:

1. Determine
the cash inflows and outflows for each year.
2. Evaluate
the capital project by calculating the following metrics:
a. net
present value (NPV)
b. internal
rate of return (IRR)
c. modified
internal rate of return (MIRR)
d. payback
period
e.
discounted payback period
3. Indicate
whether the project is acceptable, assuming Jiranna has a corporate policy of
not accepting projects that take more than 3.5 years to pay for themselves, and
assuming an 11% cost of capital.

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