Background
Outline
The proposal that has been presented for consideration is regarding the up gradation of the existing pharmacy of the hospital. The main purpose of this is to ensure the appropriate supply of all the requisite medicine to the patients of the hospital.
Immense value creation will take place in respect of LHD. The reason being that a significant issue related to the public health is being addressed by the hospital (Todini et al., 2018).
The main reason for the implementation and the commencement of the proposal is that the number of patients in the last few years have increased dramatically. The present capacity of the pharmacy in respect of keeping stock of medicine and other related supplies is not adequate for meeting the demands of the increasing patient numbers (Getzen, 2016).
Background
Provide background information to this business case, in order that the reader can clearly understand the reasoning and purpose of same. It should look to include an outline of any current processes/costs, contracts, equipment and impact at the local as well as LHD level, as applicable. Include any date(s) when any contract expires, as applicable (O’Neill & Ensle, 2015).
Please ensure you demonstrate consultation having been undertaken with relevant departments, facilities, etc across the LHD and/or other external bodies as appropriate. Also, include any trial/research information and or experiences from other LHDs in this background information if it is deemed relevant to the business case.
in the recent times it is observed that the number of patients that are availing the facility of the pharmacy of the hospital has increased significantly. The present capacity of the pharmacy of the hospital doesn’t have adequate stock of the medicine to cater to the needs of all the patients effectively and efficiently. Hence it is immediately required that the capacity of the pharmacy is increased significantly (Wright et al., 2015).
The proposal has been brought forward after due consultation with the officials of the LHD and the management of the hospital. All of them have unanimously opined that it is the need of the hour to improve the present capacity of the pharmacy of the company.
The proposal that has been suggested in this case is that the capacity of the pharmacy has to be increased immediately. The reason for this is the increase in the amount of patients that the company was registering in the last few years. Hence the current capacity of the pharmacy has to be increased significantly to meet up with the growing demand (Wright, 2017).
Aims
The main purpose of rolling out the proposal of increasing the capacity of the pharmacy is to meet the ever increasing footprint of the patients in the hospital. The revenue that is being generated by the hospital by way of selling medicine will increase significantly. In addition to that the value that is added in respect of the patients of the hospital will increase significantly (Verguet et al., 2015). The reason being that the prescription provided by the doctors must be followed by the patients of the hospitals and the medicine prescribed by the doctors must be available in the hospital at all times.
Aims
Benefits
- Efficiency gains
It is well known that one of the most significant part of any hospital is the pharmacy that is operated by it. The reason being that if the medicine according to the prescription of the doctor is not available in the hospital the patient will not be able to effectively and efficiently utilise the treatment that is done by the doctors. Hence the efficiency with which the treatment of the patient is conducted by the hospital or the efficiency with which the services are being provided to the patients will improve significantly (Goodchild et al., 2016).
- Potential savings/increased costs
The hospital will have to incur increased amount of capital expenditure for the purpose of extension of the capacity of the pharmacy. In addition to that the hospital will have to incur expenditure in respect of the acquisition of the latest medicine that are available in the market and are also being prescribed by the doctors of the hospital (Greer, 2015). The hospital will also have to increase the expenditure in respect of the hiring of new pharmacist and assistant for helping him.
- Term of proposal
The proposal will take a time of around 3-4 months for getting completed. The reason being that after the construction work related to the extension of the capacity is completed, other amenities like the supply of electricity, water and waste disposal will also be installed and commenced (Lewis et al., 2016).
Rebates/revenue potential
After the completion of the proposed extension of the capacity of the pharmacy of the hospital the revenue of the hospital will increase significantly. The reason for this is that with the increase in the capacity of the pharmacy the availability of the latest medicine will also increase significantly. This will result in increase in the sale of the medicine by the hospital and will increase the revenue that is generated by it in this respect.
- What are the expected benefits of this proposal?
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Factor |
Benefits |
|
Patients |
The highest amount of benefit will accrue in respect of the patients of the hospital. The reason for that being that previously the patients of the company were not able to get the due medicine on time. Because of that timely and effective treatment was not delivered to them. With the increase capacity of the pharmacy and the increased availability of the latest and the prescribed medicine the patients will be able to garner all round benefit from the hospital. |
|
Facility |
With the increase in the capacity of the pharmacy the portfolio of the facilities that are being provided by the hospital in respect of the patients will improve significantly. This will result in the overall development of the facility of the hospital. |
|
Clinicians |
The clinicians of the hospital will be able to better manage the inventor held by them. The increased space would enable them to rearrange the medicines in the most appropriate manner. The knowledge base of the clinicians will also improve. The reason being that with the advent of the new medicines in the inventory of the pharmacy the clinician must be better equipped with knowledge to deal with the same. They must be aware about the usage of those drugs along with the place they are kept and the condition in which they are should be kept or stored in (Millward, 2017). |
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Other |
One of the other benefits other than the above mentioned ones in respect fo the company will be that the reputation of the company will improves significantly because of the increased availability of medicine. This will ensure that the hospital is able to register increased customer footprint. |
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Risk Issue |
Severity code as per MoH Risk |
Impact |
Mitigation Plan |
Notes |
|
Financial risk |
The risk is high in respect of the financial needs. The reason being that the capital expenditure that is incurred by the company will increase the burden of repayment of the amount collected as loan from outside by the hospital. |
This will increase the fixed cost of the hospital. The reason being that the company will have to incur fixed costs such as rent and interest payment. |
The hospital must ensure that it collects or manages the large portion of the capital requirement by itself. The reason being that it will reduce the financial risk of the entity. |
The lesser the financial obligation, the better will be for the hospital. |
|
Delegation levels |
The risk is low. The reason being that the decision related to the acquisition will be done after the consultation between the pharmacist and the doctors of the hospital. |
The concise decision taken by the pharmacist and the doctors will enable the best way of procurement of the medicine. |
The communication must be effective and efficient. |
The better quality of communication between the doctors and the pharmacist will result in efficient stock maintenance by the pharmacy. |
|
Procurement |
The risk is high as he suppliers have to be properly analysed alongwith the stock |
Medicine is very sensitive itme and hence in case of any default on the part of the hospital can lead to an adverse effect on its reputation. |
The company must ensure the authenticity of the medicine acquired and supplier properly |
The quality of the medicine provided is very important. |
|
Patients |
Risk is very low |
The patients will be benefitted |
Hospital must ensure the delivery of the right kind and quality of medicine. |
Satisfaction of he patients is the most important objective of the hospital. |
|
Insurances |
The hospital will have to insure the new pharmacy |
The insurance is important especially in event of an accident. |
Cheaper and the better insurance package must be adopted |
Proper insurance will reduce the loss of the hospital in case of an accident. |
For the purpose of implementation of the same some sequential steps will have to be undertaken. The first step will be to recognise the cost that is involved. The second step will be to recognise the suppliers who will be able to provide the right kind of medicine, the third step will be to establish a committee that will look after the successful implementation and commencement of the proposal (Choonara et al., 2017). The team will be comprised of doctors and the pharmacist charged with the responsibility of the new pharmacy.
Some of the additional requirements for the proposal are as follows:
- Staff at the pharmacy
- Lead pharmacist
- Counter medicine
- Drugs by prescription.
- Electricity charges and
- Water supply.
- Training and support
Does this proposal require any training or support to be untaken by staff? Indicate who will provide any such training and support and who will be the recipients.
The proposal will require training and support to be given to the existing and the new pharmacists who will be acquired for the extended pharmacy. The reason being that the range of the medicine that is being provided by the hospital will increase significantly. Due to this the knowledge of the staff needs to be upgrade. The training will be provided by the doctors of the hospital and the recipients will be the pharmacist and the attendant (Frenk, 2016).
- FTE requirements and costs
Benefits
Very few full time employees will be needed. The full tiem employee will mainly be constituted by the pharmacist of the hospital.
A committee will be formed comprising of doctors and pharmacist that will take care of the costs that are being undertaken in respect of the functioning of the pharmacy. The reports and the supporting documents will be maintained by the pharmacist and the same will be reviewed by the committee every month.
The financial considerations for this proposal will be required in detail
- Total net cost of this proposal shown as total net cost = total cost minus any revenue
the total cost that is to be incurred for this proposal is equal to $1305075.
- List the Cost Centre(s)
The cost centre that is going to be used for this proposal is the pharmacy that is being operate by the hospital.
- Source of funding
The sources of the finance of the proposal will include banks, financial institutions and the money that is received from various charitable trusts and donations from people and entities across the country.
- Resource requirements (Set up)
The set up costs of the new pharmacy will include the costs related to the construction of the pharmacy and the cost of hiring and employing additional staffs for operating it. Other costs will include the installation of the connection of electricity, water supply and waste disposal (Kaiser et al., 2016).
- Recurrent costs
There are recurrent costs that are going to be incurred by the hospital. These costs are to be incurred in respect of the implementation and commencement of the extension of the pharmacy includes electricity supply, water supply and the salary that is paid to the pharmacist of the pharmacy of the hospital.
- Identify revenue potential
Are there any opportunities for revenue from this proposal? Has the option for revenue been discussed with NBMLHD Strategic Revenue?
The possibility of revenue generation is immense as the availability of the medicine will increase with the hospital. This will result in increased sale of the same and result in higher revenue generation on the part of the company (Dalton & Holland, 2017).
- Cost reduction
In the current case the hospital will be able to reduce the cost that is incurred by it in respect of stock out cost. This means that the loss that is beared by it due to non-availability of the requisite stock in the pharmacy of the hospital (Dalton & Holland, 2017).
- What are the proposed costs over the life of this proposal?
Insert a spreadsheet (labelled as attachment two) listing all the full life cycle costs of this proposal including any disposal implications.
There are several costs that are going to be incurred by the entity including depreciation, electricity and the salary of the staff etc.
- Offset costs and other factors
Compared the current process and costs with the new proposed process and costs in the table below – as applicable
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Current process |
|||||
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Existing process step 1 |
Action step 2 |
Action step 3 |
Action step 4 |
Action step 5 |
Action step 6 |
|
The patient visits the doctor |
Prescription regarding normal medicine is prescribed |
The same is submitted to pharmacy |
The pharmacist checks for availability |
If available the same is provided to the patient |
The record of the same is inserted in the system. |
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New process |
|||||
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New Process step 1 |
Action Step 2 |
Action Step 3 |
Action Step 4 |
Other steps |
Other steps |
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Specialised prescription is made for monthly patients. |
The record is maintained regarding the patients monthly quota of medicine. |
On a given date the medicine is packed and kept ready for collection by the customer |
An intimidation is sent to the patient and the same is delivered to him on affirmation. |
What are the options for this proposal? List the implications if status quo was continued followed by the most preferred option first, followed by subsequent and less favoured options. Eg best method to achieve a value for money outcome
|
Options |
List implications |
List net cost position |
Comments |
|
Keep operating the existing pharmacy |
This will increase the rush of the customer |
Regular cost will reduce but will incur huge stock out cost |
Not good for the future viability of the hospital. |
|
Operate two new counters for emergency patient and patient who require monthly quota of medicine. |
This will reduce the rush of the customer as the medicine that is supplied by the pharmacy will be segregated into specialized departments. |
The cost incurred in respect of the stock out cost will reduce significantly but cost of operation will increase. |
Most significant option. |
|
Open counter for the emergency patient only |
This will reduce the rush to some extent. |
The cost of operation will increase slightly. |
Good for the optimization of operation of the pharmacy of the hospital. |
|
Open another same type of existing pharmacy |
This will not be able to reduce the rush appropriately. |
Cost of operation will remain unaffected |
Immaterial. |
|
Any other options |
No intellectual property is being acquired under this proposal.
The hospital must ensure that proper tender is made applicable for the purpose of selection of the supplier of the medicine to the hospital.
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Option No. |
Benefit |
Risk |
Comments |
|
1 Construct a new pharmacy from the scratch. |
This will be as per the requirement of the hospital |
The time and money required will be very high. |
Suitable as per the current demand |
|
2 Buy a new area for the pharmacy |
Time of construction will be saved |
Proper location may not be found near to the hospital. |
Not very suitable. |
What are the steps that need to be undertaken to achieve the rollout of this business case? It needs to include the full life cycle of the process/procurement implementation being proposed. It should also consider whether a policy or procedure needs to be written or updated? Undertake a tender process as applicable. Contract management plan needs to be developed as applicable
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ACTION |
PROPOSED DATE |
PROPOSED OUTCOME OR COMMENT |
FOLLOW-UP |
RESPONSIBILITY |
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First action required |
Date |
Name of responsible officer(s) |
||
|
The ascertainment of the costs required |
1-01-2018 |
The various items that are going to contribute to costs are identified |
Efforts made to reduce the same |
Cost manager |
|
The identification of supplier |
3-01-18 |
The supplier is identified with the proof of his authenticity |
The order is placed |
Pharmacist |
|
Construction begins |
6-01-18 |
The construction will get completed in 4 moths time. |
The funds required for it is managed |
Committee that has been set up. |
Attached is my supporting documentation in relation to this business case. These can include links to any directives, research, policies, survey/questionnaire and/or financial documents.
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Project owner: (insert name) |
Signature: |
Date: |
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Insert line manager: (insert name) |
Signature: |
Date: |
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General Manager /Director: (insert name) |
Signature: |
Date: |
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Director Finance Business Information: (insert name) |
Signature: |
Date: |
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Chief Executive Officer NBMLHD: (insert name) |
Signature: |
Date: |
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