Author: Tony.
ANTONSKY HOSPITAL.
Date:
To:
From:
Subject: Proposal to purchase a high-permeability
Hemodialyzer
Purpose
The purpose of this proposal is to implore for the
authorization to conduct a feasibility study of whether the hospital should
purchase a high-permeability hemodialyzer, form a joint partnership with other
private hospitals and purchase the hemodialyzer; or to search for a cheaper
subcontractor.
Summary
Antonsky hospital is a private hospital that has built a
reputation of offering the best medical treatment by applying the current
medical strategies and using state-of-the-art equipments in a timely manner. The
hospital prides itself of having the best renal unit within its locality.
However, the total cost of the entire hemodialysis procedure is quite high
because three different subcontractors are involved. All the three
subcontractors are biopharmaceutical enterprises which own massive conventional
medical equipments. These equipments are quite expensive to purchase, and, they
require constant maintenance.
In the previous year, the hospital treated a total of
137,000 patients; of whom 93,000 were treated as outpatient cases, 38,000 were
admitted for a period of less than a month and the remaining 6000 patients had
severe chronic diseases which necessitated a hospital admission for a duration
of not less than 9 months (see Figure 1). 60% of the total number of patients
came from the locality, while, the remaining 40% came from other states as
individuals or as referrals from level six public hospitals. Using statistical
extrapolation, the hospitals expects to increase its client base to about
220,000 patients next year.
The total number of staff in the hospital is 412. This
includes 33 medical consultants, 41 surgeons, 57 general practitioners, 153
nurses and 128 support staff members. Efficiency and constancy are the very
important. The importance of constancy was exemplified in the previous year
when the biopharmaceutical enterprise that was subcontracted by the hospital to
perform hemodialysis functions, was placed under receivership, hence, it could
not perform hemodialysis, thus, forcing the hospital to subcontract the
hemodialysis therapies to a pharmaceutical industry that had an airborne
high-permeability hemodialyzer. This industry was located in the neighboring
state. This subcontractor charged very expensive rates. This problem, coupled
with the fact that the number of patients who required hemodialysis therapies
accounted for about 47% of the total client base caused the hospital to make
less profit as the cost-sharing strategy adopted by the hospital reduced the
amount of gross profit obtained.
The renal surgeons, urologists and nephrologists have
projected that the population of patients requiring hemodialysis therapies will
increase in the following year. This proposal incorporated their projections,
and it also aims to research on the feasibility of purchasing a
high-permeability hemodialyzer for the hospital or choosing a cheaper
subcontractor. Initially, the entire cost for the project would be calculated,
and also, other options of managing the problem of hemodialysis would also be
considered. Thereafter, the valuable and essential criteria for evaluating the above
options would be established.
If this proposal is reviewed and accepted, the feasibility
study will begin immediately and the findings of the study will be available in
the report. The feasibility research would be submitted in a report before
October 20th.
Introduction.
This proposal seeks for the approval of a feasibility study
to be done to establish whether the hospital needs to purchase a
high-permeability hemodialyzer or if the hospital should continue to
subcontract hemodialysis therapies to third parties. This proposal is based on
the projected increase of the number of clients who would require hemodialysis,
and the fact that the cost of subcontracting to that pharmaceutical industry is
very high, and it is reducing the profits made by the hospital.
Figure 2 below shows that the number of patients treated in
Antonsky Hospital increased last year compared to the Year 2010, and Year 2009.
This indicates that the hospital enjoys a good repute among the general populace
and among healthcare professionals. The quality of healthcare offered by the
hospital is demonstrated by the low number of re-admission of patients
suffering from acute illnesses and effective management of chronic diseases
which has reduced the number of patients who died within the hospital while
receiving treatment. This quality of healthcare requires well-trained and
diligent healthcare professionals, co-operative support staff and efficient,
well-maintained medical equipments. Unfortunately, some patients have started
to complain that the hospital is charging more money for the same hemodialysis
procedure, as they have not been informed that the previous subcontractor has
been substituted by another one. Also, some renal patients have expressed their
dissatisfaction of having to be transported by the ambulance to unfamiliar
locations where the hemodialysis procedure is done.
Though the hospital aims to increase its client base by obtaining
new clients and strengthening their base of repeat clients, the hospital should
also aim to incorporate the patients’ concern in their service delivery modules.
Currently, 41% of the hospital’s operating profit is obtained from its renal
department. The renal department is made up of four units, the nephrology unit,
the renal oncology unit, urology unit and the renal histopathology unit. All
these units utilize hemodialysis in their daily operation (Wallerstein, 2011).
Hence, when the previous subcontractor was placed under receivership and the
hemodialyzer was shut off, all the units were severely incapacitated to the
point that almost all medical personnel operating in these units refused to
come to work, as they could not explain to their patients that there would be
no hemodialysis for a few weeks. This caused the hospital to fall into
disrepute among certain segments of its client base. Everybody agrees that such
an occurrence should never be repeated in this hospital.
The high-permeability hemodialyzer is more effective than a
conventional hemodialyzer because they use high pressure ultra-filtration
through highly-permeable cellophane membranes that allows unstable protein molecules
and drug metabolites to filter out of the blood, hence removing these compounds
from the body (Ingram, 2011). Also, the high-permeability hemodialyzer has
cellophane membranes that possess both positive and negative charges on
different segments, and these charges are imparted on contacting protein
molecules that have lost their charges, hence, reactivating these protein
molecules. This property is not available in a conventional hemodialyzer
(Brutton, 2011).
Currently, the hospital has a cash overflow due to
increased volume of business. Recently, the national government waived the 78%
sales tax on all imported high-permeability hemodialyzers, thus causing the
purchasing price of these hemodialyzers to drop from $331,000 to $ 270,000. The
hospital can use the current existing cash overflow to purchase a single
high-permeability hemodialyzer. This saves the hospital the recurrent expenses
of paying subcontractors annually. In the long-term, purchasing a
high-permeability hemodialyzer is cheaper than the recurrent expenses of
subcontracting the hemodialysis therapies. Consequently, this would increase
the profit made by the hospital.
Proposed tasks.
If this proposal is authorized, the following tasks will be
performed to establish the most practical solution to the current problem of
high-outsourcing cost of subcontracting the hemodialysis therapies to the
pharmaceutical industry. These tasks are explained below.
1.
Evaluation
of the current status of the existing problem, including the magnitude of the
problem, by quantification of the current overhead costs and the long-term
effects of the current outsourcing.
The risk of patients
acquiring nosocomial infections from the airborne high-permeability
hemodialyzer would be assessed. This is due to the fact that this hemodialyzer
is also subcontracted by other private hospitals; hence the hemodialyzer is
used by a myriad of patients who also have discrete co-infections and
super-infections which may be spread by the hemodialyzer machine (Ingram, 2011).
Data collection from hemodialyzer manuals will be done. This data will be used
to assess the safety profile, ease of use and the level (and/or cost) of
maintenance required in the current hemodialyzer and the proposed hemodialyzer
(Sinclair, 2011). Also, this data will be used to compare the long-term costs
of purchasing a hemodialyzer and subcontracting hemodialysis procedures to a
company that offers hemodialysis therapies.
2. Determination of viable options that could
solve the existing problem.
This proposal does not confine its
approach to the problem from the perspective of purchasing a high-permeability
hemodialyzer. It also analyzes the practicability of other options such as a
joint purchase, utilization and ownership of the hemodialyzer by a group of
private hospitals of which the Antonsky Hospital will be one of the
stakeholders. Another option is to search for subcontractors who offer
hemodialysis services at a cheaper cost. A completed comparative study of the
different types of hemodialyzers has been done. Also, an extensive search for
trustworthy and efficient subcontractors has been completed. The provisional budget
for purchasing the high-permeability hemodialyzer is about $ 370,000 (pending
authorization) including installation, and, acquisition of the license to
operate the hemodialyzer, and other necessary documentations, from the county
government (Trevors, 2011). If the hemodialyzer is purchased by a group of
hospital, the provisional cost would be $150,000 (also, pending authorization).
Moreover, during the process of purchasing the hemodialyzer (if approved), the
needs of the hospital, its integration into the daily operations of the
hospitals and the needs of the medical personnel in the renal department will
be considered.
3. Identification of the valuable and
essential criteria against which the potential solutions will be assessed.
The opinion of experts in the field of
renal pathologies, nephrology, renal oncology and urology would be sought
after. These opinions will be obtained
by perusing through the most recent medical journals and biotechnology reviews.
Also, an interview with Professor Karl Bernstein, a specialist in the field of
hemodialysis, will be conducted. Also, a questionnaire will be created and
distributed among the medical personnel in the renal department. This
questionnaire will be used to obtain their view on the current problem and its
possible solutions.
4. Research available hemodialyzer options.
This research will be conducted through an
extensive comparative analysis of the available state-of-the-art hemodialyzers.
This analysis will utilize all the relevant information available in both the
print and electronic media. The advantages and disadvantages of each type of
hemodialyzer will be carefully evaluated. Also, the cost-benefit ratio of each
type of hemodialyzer will be considered. Also, the level of integrability of
each type of hemodialyzer into the daily operations of the hospital will be
appraised.
5. Evaluation of each option based on the authorized
criteria.
The point system will be used
to score each and every option based on each criterion. For instance, one of
the criteria is cost, and therefore each option will be evaluated and scored
based on its relative cost. In this process, the option with the lowest cost
will be awarded the highest score. This procedure will be repeated for each and
every criterion. Also, the score will be weighted based on its relevancy and
practicability. Therefore, all the options will be scored using each criterion.
Consequently, the total weighted scores for each option will be compared,
analyzed and graded.
6. Prepare the business report.
If this proposal is authorized, the
proposed research will be conducted and a report will be crafted. The report
will describe each option evaluated, each and every criterion that has been
taken into account, and the results obtained. The report will recommend that
Antonsky Hospital must choose either one of the following three options:
purchases a high-permeability hemodialyzer, form a partnership with other
private hospitals and then jointly purchase the high-permeability hemodialyzer,
or, the hospital chooses a cheaper subcontractor. Also, the rationale for the
recommendation will be stated.
Schedule.
The table below shows the sequence of
tasks for this project.
TASK
|
STIPULATED
DATES
|
Task
I: Evaluation of the status of the problem.
|
May
5
|
Task
II: Determination of options.
|
June
6
|
Task
III: Identification of criteria.
|
July
7
|
Task
IV: Research on options.
|
August
8
|
Task
V: Evaluation of options.
|
September
9
|
Task
VI: Prepare report.
|
October
10-20
|
Experience.
This project brings together the combined
experience accumulated over several decades by the following specialists:
1.
Professor Karl Bernstein. He has 30 years
experience as a renal physiologist and is a globally recognized expert on
hemodialysis.
2.
Professor James Zubiwicz. He has 23 years
experience as a renal oncologist.
3.
Professor Steven Zubiwicz. He has 20 years
experience as a urologist.
These specialists will provide
the much needed guidance and advice during the implementation phase of the
project.
Budget.
The provisional total cost of
purchasing and installing the high-permeability hemodialyzer is about $370,000.
If the high-permeability hemodialyzer is purchased jointly with other private
hospitals, then the total provisional cost will be about $150,000.
References.
Brutton, H. (2011). The
high-permeability Hemodialyzer. Journal
of Renal Pathology, 45(7), p 113-67.
Ingram, K. (2011). What is a Hemodialyzer.
Renal Review, 34(9), p 239-47.
Trevors, M. (2011). Cost of purchasing and
installing Hemodialyzers. Hemodialyzer
Review, 23(7), p87-123.
Sinclair, L. (2011). Overview of a
Conventional Hemodialyzer. Review of
Hemodialysis, 54(6), p578-89.
Wallerstein, P (2011). Applications of a
Hemodialyzer, Journal of the Artificial
Kidney, 56(5), p688-732.
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