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Service Line Development Coursework

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Updated: Oct 7th, 2019

Executive Summary

The main purpose of a service line is to coordinate the patient’s activities when assessing personal health care. Service line is designed to ensure that the patient gains maximum benefits while the health facility gains sufficient business benefits. Therefore, service line is viewed as a structure in an organizational system that focuses on the output of a health care program.

Service line development serves various functions in an organization since it interconnects various departments and disciplines to come up with a means of improving health care. Moreover, service line incorporates the various disciplines in order to ensure health care continuity.

Health care facilities implement service line in order to create a balance among the various functions in the facility while ensuring that the market elements are taken into consideration.

In this light of events, a person charged with the task of implementing service line must take into account the core functions of the health care facility, the amount of resources available, and the key market factors that affect health care industry. Considering all these factors ensures that the health care facility provides the best possible care to their patients while being within budgetary constraints.

This paper examines the viability of developing a service line in Trinity health care facility. The focus will be on developing the cancer center that requires careful consideration before incorporating it into the hospital’s system.

Introduction

Researchers have carried out various researches to determine the overall demand for cancer centers in the global scene. In the current situation in the world, the number of cancer patients is constantly increasing. This increase has been attributed to the lifestyle that most people live.

For instance, the use of gadgets in homes such as mobile phones that emit radiation may be one of the causatives of cancer. With the increase in number of cancer patients, there is also increase in demand for quality health care for the patients.

In 2005, the American Society of Clinical Oncology conducted a research to forecast the requirements of oncologists in the future (AAMC, 2007). According to the report presented by AAMC to the American Society of Clinical Oncology, the number demand for oncologists was going to increase due to the increase in number of cancer survivors (AAMC, 2007).

In the early 1970s, the number of cancer survivors in the United States alone was approximately 3 million (AAMC, 2007). However, this figure has drastically changed and the number of survivors is currently up to 10 million (AAMC, 2007).

The increase in number of cancer survivors is due to the improvement of services offered by cancer centers in the health care industry. With the increase in number of survivors, there is also an increase in demand for new cancer centers to carter for the surviving patients.

A report released in 2011, projected the number of cancer cases in the United States was approximately 1, 596, 670 (ACS, 2011). Moreover, the projection provided did not include cancer patients with non-invasive cancer. This number was quite high and the available cancer centers could not carter for all the patients (ACS, 2011).

Due to this fact, the report approximated that the number of patients who would die from cancer would be 571, 950. In 2012, the projected figure for cancer cases in the United States will be approximately 1,638,910 (ACS, 2012). In this light of events, incorporation of a cancer center will ensure that the hospital is able to cater for some of the cancer patients, earn income, and avoid some unnecessary deaths.

The demand for cancer centers increases yearly (ACS, 2012). However, the patients only demand centers that are well equipped to enhance their survival. Therefore, for a new cancer center to meet the demand it must ensure that enough facilities are available to provide the patients with the required services while maintaining the low costs that enhance affordability.

Therefore, incorporation of a cancer center into the hospital’s operations will require management to take into account a number of factors such as financial position, the core values of the hospital, and availability of labor to run the cancer center. These factors act to complement the demand element in service development.

International Analysis

Watson in his survey discovered various key factors that play important roles in the global medical trends (2011). According to the report compiled by Watson, 95% of world’s countries had a medical trend that exceeded the rate of inflation (2011). This meant that the general expenditure on the medical services was increasing at a faster rate than the rate of inflation of the country.

The increase in medical costs in the year 2009 was approximately 10.2% (Watson, 2011). However, the general inflation during the same year was approximately 6.9%. This trend was common in the Middle East, Africa, and Latin America.

Businesses, and companies, find it difficult to create a comprehensive medical scheme for their employees due to the fact that the medical costs are increasing at almost twice the rate of inflation. Most employers find it difficult to afford paying medical insurance for their employees.

Another key finding in Watson’s report was the emerging markets in developing nations. The medical costs in these markets slowed down between 2006 and 2009. These markets are experiencing cheaper medical rates than their counterparts in developed markets are.

Medical users in developed markets are paying higher medical prices than they did five years ago (Watson, 2011). Most medical users are expecting higher medical prices in the forthcoming years (Beecham, 2010). Analysts’ project that the average increase ate of medical costs is likely to increase to 12.7 % by the end of 2012. In the developing countries, the medical costs will be higher than that of developed economies by 2.5%.

From Watson’s research, the medical users in North America and Latin America predicted the highest increase in medical costs (2011). European respondents on the other hand, predicted the increase of medical costs to lesser than that experienced in the other countries in the world.

The global trends in treating cancer have gradually changed due to the advances in science. Technology can be used to cure or eliminate some cancerous cell before they actually spread to other parts of the body. Therefore, patients have changed the manner they use in assessing treatment all over the world.

Most patients are opting for the expensive technologies that can assist in preventing the spread of cancer. Moreover, the concept of costs is of little concern to some people where technology and science guarantees full remission of the disease.

With the concept of technological trends and cost trends, CEO’s can develop a sound service line for medical or health care center. In our case, developing the cancer medical care center will require incorporating the concept of global medical trends into the implementation process.

This is because the costs of assessing medical care is expected to increase and the CEO has the responsibility of ensuring that, the services offered by their cancer center are either cheaper or at par with the market prices. By regulating the costs, the medical center can attract patients and keep their expenditure at manageable levels.

Moreover, the CEO should consider incorporating the latest technology into the cancer center. Technology and science provide patients with guarantees of good treatment. Most cancer patients are attracted by the quality of the service and not the costs. Therefore, incorporating newer method will enhance the demand of the center.

Discussion on Different Programs

There are various ongoing programs in the fight to eliminate cancer. One of the most research programs in the field of cancer research is the Radiation Research Program.

This program is used in establishing the priorities and evaluating the effectiveness of radiation in cancer patients (NCI, 2004). Moreover, oncologists and other medical practitioners use this program to allocate the resources among the different cancer patients (NCI, 2004).

The Radiation Research Program team presents their findings to the National Cancer Institute in matters that deal with radiation research. The program designed by the Radiation Research Program team has several functions that may assist a new and upcoming cancer center.

Among the functions of Radiation Research Program is providing expertise knowledge on matters related to radiation treatment, and other forms of energy used in treating cancerous cells. In addition to this, the Radiation Research Program team assists the individual radiotherapy researchers in establishing the scope of their research.

By doing this, the Radiation Research Program team ensures that the future direction of radiation treatment is in the right track. Radiation Research Program team also develops unique models that practitioners may use to help the underserved cancer patients in the world. This program ensures that the individual cancer centers can access the clinical trial results.

Apart from the Radiation Research Program, other research programs also exist and are practiced by different cancer centers. The outreach program is one of the most common programs that cancer centers use to reach patients who cannot access the medical centers.

Moreover, the outreach program is used to educate the public on different aspects of cancer (American College of Surgeons, 2009). From an economist’s point of view, medical centers can use outreach programs as a means of publicizing the different services offered by the center. In addition to this, the outreach programs act as a means of ensuring that patients get information at the correct time.

Trinity medical center should incorporate the use of these programs in their cancer center. Incorporating the use of Radiation Research Program will ensure that the center reaps maximum benefits from the program. Benefits such as advances in use of radiation to treat patients come in handy to any cancer center.

Moreover, the Radiation Research Program will provide guidance to the research department in Trinity’s cancer research team. An outreach program will ensure that the cancer center is able to educate the surrounding community. By incorporating the outreach program in service development, Trinity cancer center will ensure that they have advertised their services while providing useful services to the community.

Financial Analysis

From the Trinity’s projection, it is possible to do an analysis on the financial viability of the project using financial ratios to begin with the analysis on company initially aims to invest a capital of 8 million to ensure that the cancer center runs properly (Penman, 2001).

For the company to consider the cancer center projects as economically viable they must be able to recover the capital costs.

To test the ability to recover the capital the approximate number of patients expected per annum must be known. Trinity plans to charge an oncology discharge fee of $70,000. The gross charges per radiation treatment are $450 and the gross charges per Chemo treatment are $ 600. The collection is expected to be 35% and the ratio of cost to charges is 30%. Therefore, the costs incurred in ay oncology discharge will be $21000.

The remaining $49 000 will be considered as revenue. Therefore, using the projected number of discharges the total revenue will amount to 18,718,000. The revenue from radiation oncology will be equal to 1,228,500 and the revenue from chemo treatment will be 1,260,000.

However, the collections made by the trinity medical facility are 35% of the total revenue. This amounts to 7,422,275. Therefore, company will make over $18, 718, 000 in five years.

This shows that the company is doing a viable business. However, their amount of collection will be lower than the capital invested. To determine further financial viability of the project financial ratios such as return on capital invested need to be calculated. However, to calculate more ratios, a complete financial statement for various years is required (Souvik, 2006).

Target market

Cancer centers provide care to a variety of cancer patients. Among the most affected are the people aged between the ages of 65 and older. Cancer is more common in these patients than in the younger generation. Therefore, the major target market for the cancer center will be the older generation. However, the target market is not limited in to the older generation.

Cancer is affecting even the young generation in the current world. In this light of events, cancer centers should also target the younger generation affected by the disease. In general, a cancer center should focus on all the cancer patients. In addition to this, the cancer center should target the whole community to educate them.

References

AAMC (2007). Forecasting the Supply of and Demand for Oncologists. American Society of Clinical Oncology, 10 (7), 9-130.

American Cancer Society ‘ACS’(2011). Cancer Facts and Figures. American Cancer Society Inc, 12 (2), 3-60.

American Cancer Society ‘ACS’ (2012). Cancer Facts and Figures. American Cancer Society Inc, 12(2), 3-68.

American College of Surgeons (2009). . Web.

Beecham, H. (2010). Trends in International Healthcare. Web.

Lappin, A. M. (2010). Women’s Health: Strategies for Superior Service Line Performance. HealthLeaders Media, 20 (12), 5-48.

National Cancer Institute ‘NCI’ (2004). . Web.

Penman, S. (2001). Financial Statement Analysis and Security Valuation. New York: McGraw-Hill/Irwin.

Souvik, D. (2006). Case Studies on Market Entry Strategies. Nagarjuna Hills, Punjagutta: ICFAI Books.

Watson, T. (2011). Global Medical Trends. Global Medical Trends Survey Report, 7 (2), 1-9.

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IvyPanda. 2019. "Service Line Development." October 7, 2019. https://ivypanda.com/essays/service-line-development/.

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