ansante case study.pptx

ansante case study.pptx

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  Case Study On Asante Teaching Hospital PresentedBy: Aniket Mandavkar (2207004) Armaan Gupta (2207007) Dhananjay Patwari (2207011) Malyaj Kaushal (2207017) Nilesh Nikhade (2207019) Puneet goyal (2207023)
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  Courtney Young was undergoingan internship at Asante Teaching Hospital She had to organize the cost data she had gathered from staff interviews into clear recommendations for the CEO CEO, a professional CA with specialization in Cost Control, recruited in 2013 from a For- Profit Hospital Introduction
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  Served community for 40 years Officialvisiting facility for visiting President & Prime Minister Top ranked hospital in region for surgery, trauma, neonatal care & teaching 274 Beds 1652 Staff Served over 22,000 patient each year Annual Budget of over R378 Million Johannesburg 4.4 Million Including Metropolitan Area 7.8 Million Including Outer Suburbs & Townships 10.3 Million Salient Features Asante Teaching Hospital Information about Asante Teaching Hospital Population Demographics Growth in the middle class had been strong in the decade City & Townships were economically varied with average GDP of R249,900 The city’s middle class had grown rapidly 100% funding from private foundation A not-for-profit body with charitable mission As no government support, patient paid bills through a combination of insurance coverage & out-of-pocket payments. If patients were unable to afford services, they could apply for coverage under Asante’s Patient Welfare Program
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  Insurance Coverage
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  ASANTE 1. Non-Profit 2.Needed to survive independently 3. Any surplus from one department was used to offset care in another department 4. Asante was the only hospital that offered single rooms to patients for an additional fee 5. Privacy was a core driver of perceived luxury 6. Asante’s higher prices could be justified by its premium level of care 7. Insurance providers often scrutinized and debated its long bills before mothers could be discharged COMPETITOR 1. For-profit 2. Raise capital from investors to expand 3. Earn profits from operations to pay dividends 4. All competitors except St. Luke’s: Operating efficiently, with four patients per room 5. Less appealing (except St. Luke's) to the growing demand for privacy among maternity ward patients. 6. Cheaper services with fewer variations in price. Lower quality of care and fewer perks in terms of comfort, such as enhanced privacy for mothers 7. All but Johannesburg Hospital offered bundled pricing for labour with no complications
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  Existing Billing System •Prices at Asante ranged from R13,912 to R19,917 for a natural birth • Much of the cost was covered by insurance • Expectant parents at Asante had no certainty regarding the cost of a birth • Costs were broken down in final discharge > overwhelming for patients • Wait for hours at discharge for insurance clearance • Overwhelming billing procedure at discharge for new parents • Significant financial strain on patients • While Asante’s higher prices could be justified by its premium level of care • insurance providers often scrutinized and debated its long bills before mothers could be discharged. Cost Patient’s Concerns Insurance Company
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  1. Asante- besthospital in S. Africa •2. Loan-free Operations •3. Single room service •4. Experienced team 1. Negligible support from the Government •2. Difficulty in raising funds •3. Difficulties & Problems in Billing Process •1. Simplify the pricing model & to be more competitive to other hospitals •2. Tapping the high potential Johannesburg middle class people •3. Growing Demands •1. Competitors are cheaper & fewer variations •2. Other players can raise higher funds to expand due to profit-making the organization •3. Better parts of the city have better hospitals with advanced & latest equipment SWOT STRENGTH WEAKNESS THREATS OPPORTUNITY
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  Pricing Strategy Recommendations • Single bundled pricefor all natural birth deliveries • Three bundled prices • The status quo Steps • Identify the cost drivers • Determination of total Overhead Cost • Applying Cost Drivers to the total cost • Length of Stay • Registration time
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  CALCULATIONS
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  Price Comparison 13912 16915 19917 13249 15188 24300 14246 1424614246 0 5000 10000 15000 20000 25000 30000 Level 1 Level 2 Level 3 Status Quo Three Bundled Single bundled
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   Competition Most ofthe competitors were offering bundled prices for the maternity ward.  Customer Concerns related to the billing process The stress and disappointment that their birth cost more than expected was often upsetting to parents, even when much of the cost was covered by insurance. Costs were broken down in dizzying detail upon final discharge and this meticulous compilation led to patients waiting during delivery.  Insurance Providers Insurance providers scrutinized its long bills and took longer time for it. Insurance providers naturally appreciated low costs but also preferred bundled pricing because of its simplicity. Challenges in Asante Hospital
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  Comparative Study S.No. ChallengesStatus Quo Triple-bundle Single-Bundle 1 Competition 1.2 Bundled Prices Not Offering Offering Offering 2 Customer Concerns related to billing process 2.1 Bill amount clarity in advance Not very Clear Clear Clear 2.2 Customers Waiting Time High Low Low 2.3 Bill Complexity High Low Low 3 Insurance Providers 3.1 Bill Scrutiny time High Low Low 3.2 Insurance Payment clearing time High Low Low
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  Patients & RevenueSegregation 83% 6% 11% Revenue Contribution Level 1 Level 2 Level 3 87% 5% 8% Patients Segregation Level 1 Level 2 Level 3
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  Price Recommendations for Level1 S. N. Challenges Triple-bundle Single-Bundle 1 Price Difference w.r.t. Status Quo -5% +2% 2 Price hike justification Not Applicable Not Available 3 Customer Preference Comfortable to pay quoted price Apprehensive to pay higher price 4 Price Low High 5 Price Difference w.r.t. Competitor (St. Luke’s) 5.58% to 0.55% 5.58% to 8.11%
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  Price Recommendations forLevel 2 Note: Patient base is only 5% Price Drop Status Quo to Triple Bundle 10% Status Quo to Single Bundle 16%
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  Price Recommendations forLevel 3 1.Number of such cases is only 8% of total admissions 1.Involves most complications (Such as Fetal Distress etc.) 1.Can’t be predicted prior to admission to the hospital. 1.Such urgent scenarios require more resources and fast action. 1.Priority during such scenarios is safe childbirth, irrespective of expenditure.
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  Triple bundle modelis proposed. Triple bundle price will simplify and fasten the billing & checkout process Triple bundle price option allows patients to get an upfront idea on expected cost Ease of insurance claim scrutiny and faster settlement of insurance claims Bundle pricing will ultimately boost customer satisfaction.
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  Thank You...