Compare the relative costs of lawn care at each of three locations; the hospital itself, the outpatient center, and the hospital-affiliated nursing home down the block.
HSA 525 EXERCISE14-4
CAssignment Exercise 14-4: The Discovery The Chief FinancialOfficer at Sample Hospital has just discovered that the hospital’sChief of the Medical Staff’s son Jason, a student at the localcommunity college, is paid $100 per week year round for groundsmaintenance at the hospital’s Outpatient Center. The CFO, no fan ofthe Chief of Medical Staff, now wants you to prepare a report that compares the relative costs of lawn care at each of three locations; the hospital itself, the outpatient center, and the hospital-affiliated nursing home down the block. Required Reviewthe available information for grounds maintenance at the threefacilities. Decide how to convert this information into comparable data. Then prepare a report, based on your assumptions, thatpresents comparable costs of grounds care. Also provide your as-sessment of what the best future course of action should be.Relevant Information So far you have assembled the followinginformation. Now you need to decide how it can be converted intocomparable data. Introduction to the Three Facilities SampleHospital is an older 100-bed hospital. The new Outpatient Center,built last year, is across the street and the Golden Age NursingFacility is down one block, on the corner. All three facilities arepart of the Metropolis Health System. (Appendix 25-A contains somefi- nancial details about Sample Hospital.) The hospital is locatedin the midwestern sunbelt; there is occasional frost in the winterbut no snow. Grounds Maintenance Tasks That Should Be Performed atAll Three Sites • Mowing and edging • Walk sweeping • Raking leaves• Blowing off parking lot • Flower bed maintenance (wherenecessary) • Hedge trimming and minor tree pruning (major treetrimming is performed by a contractor on an as-needed basis andthus should be disregarded) Figure Ex-1 provides a map that illustrates the layout of the grounds for each facility and theirproximity to each other. _11__ t-, 11_1 LJ – Washington StreetChapter 14 387 Parking -; iil ’” ‘” ISample HospitalI II I Jefferson Street Jackson Street Outpatient IParking II II Figure Ex-l Sample Hospital Map Grounds MaintenanceArrangements for the Three Facilities The current groundsmaintenance arrangements vary among the three facilities asfollows: 1. Sample Hospital uses its Maintenance departmentemployees for grounds care. The hospital pays these employees $15per hour plus 15% employee benefits; it is estimated they spend1,000 hours per year on grounds maintenance work. Another estimated120 hours per year are spent on maintaining the lawn careequipment. The employees use a riding lawn mower, edger, andblower, all owned by the hospital. The hospital just bought a newmower for $2,995 less a ten percent discount. It is expected thatthe mower should last for five years. 2. The hospital’s Chief ofthe Medical Staffs sonJason, a student at the local communitycollege, is paid $100 per week year round for grounds maintenanceat the hospital’s Out- patient Center. A friend sometimes helps,but when that happens Jason pays him out of his weekly $100. Ittakes about one-and-a-half hours to mow, edge, and blow.Jason useshis dad’s riding mower and blower, but Jason recently bought hisown edger. Jason also buys fertilizer for the grass twice a year.3. The Nursing Facility contracts with a landscape service on aseasonally adjusted sliding scale. The landscape service is paid$600 per month from April to October (mowing season); $400 permonth for February, March, and November; and $200 per month forNovember, 
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