Note that you will need to do some calculations as instructed. The response should be in a question-answer format (not a memo or essay). This is not APA format and no references are required. You will want to include some tables to support your answers, particularly the last question.
1. What is the economic rationale for the merger of Brigham and Women’s Hospital (BWH) and Faulkner Hospital (FH)?
2. What are the non-financial challenges facing Brigham and Women’s/Faulkner (BW/F) in migrating services from BWH to FH?
3. What would be the financial impact of migrating the services listed in case Exhibit 6 from BWH to FH? Try to quantify the impact on BWH, FH, and the combined entity. (The data in Exhibit 6 is illustrative. It may not be representative of all services performed at BWH and FH. Start by identifying the direct costs, and the indirect costs.)
4. From a purely financial perspective, would it make sense to migrate orthopedic surgeries from BWH to FH? If so, under what conditions? Think beyond orthopedics as you consider this question.
5. In particular, does it make financial sense to migrate hip fracture services to FH from BWH? What additional data would you need to make this analysis?
6. Assume that direct and indirect costs are directly proportional to the average length of stay. Use data in the last two paragraphs of the case for the following questions:
• What would the new margin per case at FH be if it successfully cut the expected length of stay by 2 days?
• Given the additional costs of staffing the hip fracture service at FH, how many cases will FH have to handle before it breaks even?


 

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