512019 Business Process Management - Pages 576 - 578http.docx

5/1/2019 Business Process Management - Pages 576 - 578
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My case Study:
Measurement and Analysis Case Study:
Boston Children’s Hospital; Boston, Massachusetts
Warbird develops custom data measurement tool to help world-
renowned children’s hospital increase international market
share
The Opportunity
Recognized as one of the most prestigious and high quality
tertiary and quaternary care centers for children in the world,
Boston Children’s Hospital sought to increase its share of the
global market for children’s healthcare services. According to
CFO David Kirshner, although Children’s is renowned for
several areas of clinical expertise, there was growing concern
about overseas competitors. “We needed to get our arms around
how to best measure our international business information flow
and ability to process our patients in a timely and effective
manner.”
David knew that hospital decision-makers would need concise
and timely data about the strengths and weaknesses of the
international business and patient flow process within the
Children’s system in order to grow international market share.
He engaged Warbird Consulting Partners, a professional
services firm specializing in value-driven organizational
solutions, to develop a measurement and analysis tool designed
specifically for hospital executives and physician leaders.
The
Solution

David and Steve Nichol, Children’s lead director of the
measurement effort, worked with Doug Fenstermaker, Warbird
Consulting Partners’ managing director and leader of the
company’s healthcare practice. A former healthcare executive
with 18 years’ experience as a hospital CFO, Doug helped
David and Steve develop a detailed measurement device that
identified core indicators, process-oriented performance
indicators and data elements that would need to be captured.
The data would be provided in an easy-to-use dashboard
interface that both meshed with and reflected progress on
Children’s newly-developed international business strategic
plan.
The project was completed in approximately 90 days and results
were presented to the internal board that governs international
business, chaired by Alan B. Retik, M.D. During this time,
project managers also partnered with Huron Consulting Group’s
higher education practice to assist in the creation of a long-
range strategic plan for international business development at
Boston Children’s Hospital. The hospital embarked on a multi-
phase effort to implement the measurement system. Some key
performance indicators – such as those related to revenue –
were put into operation immediately while other, more complex
indicators continued to be developed and refined.
The Boston Children’s Hospital international patient data

measurement tool shows how Warbird can add value by custom-
designing a solution to meet discreet organizational needs. The
selected data indicators provide hospital executives, managers
and physician leaders important information about the
timeliness and effectiveness of information flow. The data also
provides insight into communications and processes in
managing a patient at Children’s – from the point of inquiry to
the point of returning the patient to the country of origin. By
being able to easily access critical indicator data about patient
processing, hospital leaders are able to identify points where
added efficiency will make Children’s a more attractive choice
for patients coming from overseas.
Results: Measuring turn-around time and key economic
indicators
The following is an excerpt of the table prepared for Boston
Children’s Hospital that shows the nature of the custom-
designed measurement tool and the types of indicators to be
measured. Each indictor helps hospital leaders and Children’s
international oversight board understand where the process is
effective and efficient and where it can be improved. This
indicator system was integrated with the hospital’s international
business strategy to give management and others insight into the
effectiveness of Children’s overall international business
approach, including timeliness, communications, information
flow and actual patient care delivery. The hospital populated the

table with indicators from its data systems and uses the table as
a dashboard for performance reporting to Boston Children’s
Hospital senior leaders and international board of directors
Running Head: FINANCIAL ANALYSIS1
FINANCIAL ANALYSIS2
FINANCIAL ANALYSIS
Financial Analysis
Financial analysis usually involves the use of financial data in
order to make an assessment of the company's financial
performance and it is used to make a recommendation on how to

make an improvement. It is observed that financial analysis
usually carries out their work in excel sheet in order to make an
analyze historical data and make possible projections on how
the company is going to perform in future (Hales, 2006). In this
part of the paper, we are going to make an analysis of major
forms of financial analysis, have a look at the way they are used
in an organization and the possible similarity and differences
which might exist.
There are several Financial Analysis techniques which include;
1. Vertical
2. Horizontal
3. Leverage
4. Growth
5. Profitability
In this paper, we are going to have a look at Vertical and
Horizontal Financial Analysis
Vertical Financial Analysis
This is a form of financial analysis which involves having a
look at the various components of the income statement and
dividing them by revenues in order to express them as
percentages. In order to make this exercise more effective, there
is need to benchmark against them with other companies in the
same industry in order to determine how well a given company
is performing (Vance, 2002). It is also termed as common sized
income statement as it allows an analyst to compare companies

of different sizes by evaluating their margins instead of their
dollars.
Horizontal Financial Analysis
Horizontal Financial analysis simply involves taking several
years of financial data and making a comparison with each other
in order to determine the possible growth rate.
Horizontal Analysis. This form of analysis is essential for
analysis as they use it to determine whether a given company is
either growing or declining and the identification of key
important trends.
When building this form of financial models, there is a need to
typically have at least three years of historical financial
information and have at least five years of forecasted
information. This in return provides 8 years of data which
he/she can use in order to make a performance of meaningful
trend analysis which is also used in benchmarking against other
companies within the same industry (Vance, 2002,).

Comparison between Vertical and Horizontal Financial Analysis
Horizontal vs
Vertical Analysis
Horizontal Analysis usually involves analysis of financial
statements for a given company over several years in order to
come up with a decision.
The vertical analysis involves a comparison of one item with
another in order to come up with a decision
Main Purpose
Its main purpose is to compare line items in order to calculate
the change that has occurred over a given period
The main purpose of vertical analysis is to compare a change of
an item in terms of percentages
Usefulness
It plays a pivotal role when it comes to comparing the company
results from the previous years
The horizontal analysis becomes more useful when comparing
company results with previous financial years.
Vertical analysis is useful when it comes to comparing the
results of a company with other companies in the same industry.
.

Similarities
One of the similarities between the two is that they are all used
with the aim of gauging a firm's performance against other
companies in the same industry. The second use for these two
financial analysis tools is that they are used by the top
management of an organization in order to formulate key
decisions (Hales, 2006).
With Boston Massachusetts Children’s Hospital the Liquidity
ratio would be great in helping to determine if the hospital is
staying on track and able to meet the obligations of its patients.
The hospital needs to have a clear vision of its financial
standing in order to operate successfully.
Liquidity Ratio
Current Assets for the last two years:
2012 1.9%
2011 2.4%
Financial Statement 2

Summary of Financial Statements
Boston Children’s Hospital; Boston, Massachusetts Financial
Statements
The Financial standing of Boston Massachusetts has not really
been consistent. Over the last two years in many parts of our
finances we have dropped in some areas and increased
consistently in others.

Current Assets for the last two years:
2012 1.9%
2011 2.4%
Current liabilities for the last two years:
2011 1$36,455
2012 $89,088
There was decrease in our liabilities we are working diligently
to continuously reduce this number.
Trends
Net cash flow from operating expenses was the lowest in 2011.
We have regained an increase in 2012 but with new studies and
programs being implemented this was projected. As our hospital
continues to grow and patient retention increases the numbers
for operating will soon begin to decrease.
Financial Management in our hospital it very important and
does come with risks. The trend with our cash used by
investments was in the negative for a while and that has begun
to become a bit steadier.

The negative amount shown for cash used by financing
activities reflects what we have paid out in dividends to our
shareholders, repurchase of common stock, and retirements.
201220112010
Financial Position
Although over the last two years both our assets and liabilities
have decreased. Boston Massachusetts Children’s Hospital in
still in a stable financial position to take care of the needs our
patients and stakeholders. With effective leadership and new
programs there will be sustainable ground for the growth of the
business in the future

References
johnsonandjohnson. (2012). Retrieved from
Johnsonandjohnson.gcs-web.com:
https://johnsonandjohnson.gcs-web.com/static-files/d541da43-
2712-4041-b67e-fa8231a4cf39
www.study.com. (n.d.). Retrieved from www.Study.com:
https://study.com/academy/lesson/financial-management-in-
healthcare-organizations-roles-functions.html
Net Cash Flow From Operating activities

2012Net earningsAdjustments to reconcile net earnings to cash
flows from operating activities:Depreciation and amortization
of property and intangiblesStock based
compensationNoncontrolling interestAsset write-downs and
impairmentsDeferred tax provisionAccounts receivable
allowancesChanges in assets and liabilities, net of effects from
acquisitions:Increase in accounts receivableIncrease in
inventoriesIncrease in accounts payable and accrued
liabilitiesIncrease in other current and non-current
assets(Decrease)/increase in other current and non-current
liabilitiesNet cash flows from operating
activities1051436666623392131-3992-9-12768-2172-
2555153962011Net earningsAdjustments to reconcile net
earnings to cash flows from operating activities:Depreciation
and amortization of property and intangiblesStock based
activities967231586210160-83632-915-715493-

17854413142982010Net earningsAdjustments to reconcile net
earnings to cash flows from operating activities:Depreciation
and amortization of property and intangiblesStock based
activities1333429396140035612-207-19620-5748716385Net
earningsAdjustments to reconcile net earnings to cash flows
from operating activities:Depreciation and amortization of
property and intangiblesStock based
liabilitiesNet cash flows from operating activities

Net Cash used by investments
1#REF!1#REF!1#REF!
Net cash used by financing activities $(83.00) - - $2,720.00
$1,246.00 $1,226.00 $(804.00) $(16.00) $(32.00) $45.00
$4,470.00 $18.00 $(6,175.00) $(11,200.00) $(6,565.00)
$3,268.00 $9,729.00 $7,874.00 $(12,919.00) $(2,525.00)
$(2,797.00) $(6,614.00) $(6,156.00) $(5,804.00)-20562-4452-
4980
Running Head: Capital Decisions1
FINANCIAL MANAGEMENT IN HEALTH CARE4

Capital Decisions
Discusses why is it more difficult for healthcare companies to
get expansion financing in the today's economic climate and
financial issues with expansions.
Health care companies are consistently facing financial
difficulties in the current economy. The main reason as to why
the healthcare companies are facing difficulties in access
finance is because of the large number of uninsured individuals
who have been seeking the services. The rate of reimbursement
from both the Medicare and the medical has also contributed as
the it’s very low. Thus, a financial burden which is very
significant has been put on the hospitals (Finkler, Ward, &
Calabrese, 2018).
The number of underpayments for the two has also increased
making the companies to have cost shifts thus increasing the
cost of the services as well as the supplies. Shortage of staffs is
also a contributing factor to these challenges. This has
increased the level of debt owed by these companies making it

difficult to refinance the loan that is already existing or even
acquire more capital as they can never access credit. More to
these the company has started filling bankruptcy and some have
gone to the level of closing (Baker, Baker, & Dworkin, 2017)
Describes why healthcare companies need to look beyond their
banks to secure financing.
Health companies should look secure financing from various
sources as the bank’s loans may not be always available. The
poor credit rating the health companies are facing as they are
having difficulties in paying their loans may not guarantee them
a bank loan. Other source of financing such as crowd sourcing,
leveraging among other may be cheap, easily available and the
procedure of acquiring the financing could be simple unlike the
bank loans.
Explains the importance of making a good case for expanding
healthcare providers' methods of calculating break-even
analysis.
Making a good case for analysis the breakeven will be vital as it
will help in determining the if what the health companies are
charging for every services or product offered is enough to cater
for all the cost inquired to produce the product or make the
services available. This will also help in analyzing the amount
of sales required to reach the break even. The most important is
that the healthcare companies can assess what their true
operating cost is as well as their prices. In addition to thee the

manager will get an insight on their price accuracy and weigh if
the goals set on the sales are realistic (Finkler, Ward, &
Calabrese, 2018)
Discuss non-financial factors do the authors believe need to be
included in break-even analysis?
The author believes that during the analysis it is important to
consider the volume of sales, the depreciation of the tools and
equipment’s being used, the technology, goals setting, the
operating environment which includes the political, economic,
cultural religion and the sociological factors. The analysis must
also consider the changes that may occur in the course of the
operation (Baker, Baker, & Dworkin, 2017).
Explain how current issues, such as the Affordable Care Act,
affect break-even analysis.
The Affordable care Act, which is legislation, has made
significant efforts in reforming the systems of the healthcare as
well as in controlling the spending of the healthcare in the US.
This Act has decreased all fixed costs of various companies
which has directly reduced the production units for the break-
even as the fixed cost reduces. The margin of involvement has
remained constant.
Summarizes the authors' viewpoints and apply the concepts to
your case. Also include a summary of your viewpoint in
comparison to the authors'. Be sure to specifically address the
methods that influence capital investments and decision-

making; and explore methods of analyzing capital investments
(Payback, Net Present Value, and Internal Rate of Return). This
report will serve as your Capital Management section of your
project.
The author concludes that every decision that is made in the
health care department has some implications that are ethical.
This implication either affects the patients, the leaders or the
service providers. While investing capital, it is important for
companies to ensure that the capital invested should give the
best return which are possible. The management should ensure
that there is maximization of the wealth of the shareholder as
well as increased profit not forgetting the quality of services.
The decision is mostly influencing by the management outlook,
the growth opportunities being created the changes in
technology, the strategies used by the competitors, the cash
flows in the budget, the market predictions, the fiscal incentives
as well as other factors which are non-economic. The capital
investment can be analyzed using the payback period which
explain the amount of time that the company will take in order
to recover its initial investment from the profit and the savings,
the net present value method which puts into consideration of
value of money over time, and the internal rate of return which
gives an estimate of the profitability of an investment. These
methods will help in knowing how profitable certain
investments will be (Finkler, Ward, & Calabrese, 2018,).

In conclusion, it is also important to put into consideration all
the stakeholders and how they are affected by a certain project
before investing in it.
Analyze the key points of the Enron Scandal and specifically
address how professionalism and ethics influence decision-
making. How do unethical standards impact an organization's
performance and capital investments? Reference the concepts of
embezzlement and losses. Explain how you maintain ethical
standards in relation to Code of Ethics.
The key points incudes having a balance of the quality of care
provided as well as the productivity which means that the
companies should analyses if their focus in providing the
healthcare id guided by the right principles. The other key point
is on how access to health care should be improved. It is ethical
for the healthcare to ensure that all individuals can access the
medical care which is basic. In addition to this it is ethical for
the system to encourage growth of the workforce in the health
care by supporting them for future service providing. This
involves having the right team whom the company offers
regular training a way of preparing them for future service
provision (Nowicki, 2018).
References
Baker, Baker, R. W., & Dworkin, N. R. (2017). Health Care
Finance. Jones & Bartlett Learning.

Finkler, Ward, D. M., & Calabrese, T. (2018). Accounting
Fundamentals for Health Care Management. Burlington, MA:
Jones & Bartlett Learning.
Five Top Ethical Issues in Healthcare. (n.d.). Retrieved from
https://www.amnhealthcare.com/latest-healthcare-news/five-
top-ethical-issues-healthcare/
Nowicki, M. (2018). Introduction to the Financial Management
of Healthcare Organizations.
5/1/2019 Sample Content Topic
https://purdueglobal.brightspace.com/d2l/le/content/82728/view
Content/7037454/View 1/1
Unit 10 Assignment: BPM and Global Competitiveness
In this Assignment, you will analyze Case 1 from the chapter
and respond to questions related to the role of BPM in global
competitiveness.
Please go to Course Documents to review the details and

Rubric for this Assignment.
Assignment Details

512019 Business Process Management - Pages 576 - 578http.docx

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