Business PlanBy : Paula Grundy

HIP AND KNEE: TRANSITIONAL HOME

Project Overview • According to the American Academy of Orthopedic Surgeons between 200,000 and 300,000 hip and knee replacements are performed in the United States each year.• In response to this data and future trends Hip and Knee program created at St. John Hospital.• The end state vision of the Hip and Knee Program was to provide a seamless customer centered continuum of care ending with patients retuning home.

Barriers• In 2012 there were 500 replacements; several of these patients participated in the program but the patients could not have complete follow-up because they had been discharged to a nursing home or rehabilitation facility.• Due to length of stay and current technology of surgical procedures that decrease healing time patients discharge early.• Data suggest patients were not satisfied with this result but had no other choice.• Patients did not like the idea of going into nursing home because of the environment.

Resolution: Transitional HomeResolution was to create a facility that would focus on continued care of the hip and knee patient with a goal of providing services that promote independence in a safe and pleasing environment.

• Details:• The transitional home will consist of 6 rooms that will be designated specifically for surgical patients• Located in Wayne County serving Northern Wayne County and Southern Macomb County.• Transitional Home will provide rehabilitation, monitoring of labs, and consultation of home management• Price will be all inclusive

Transitional HouseResidents and families will choose the Transitional House because of:• The expertise and experience of the owners• The highest quality of care provided in specialized area• The services are included in a set fee• The comfortable, safe home-like environment• Location, which allows easy visitation with treatment services.

Market Capture Strategies• Transitional House intends to recruit clients through professional contacts at St. John Hospital and Medical Center. Patients will be identified by the assessment process and will be chosen based on their benefit from the home services. Other referral sources will include healthcare staff, case management, social workers and physician relationships formed over the years in the medical field. We will also identity local and community sources through advertisement i.e. Carelink, churches, papers as well as city wide, internet and phone directory.

Competition• The competitors that have been identified are local area nursing homes,

extended care facilities (ECF) and rehabilitation organizations. The statistics gathered from these health systems support them being prime competitors. Unfortunately, when it comes to the marketing strategies most of our promotions are done in the same locations and are similar in comparison.

• There are nursing facilities in the area. These facilities unlike a transitional home have a nursing home feel and do not offer the comforts of home. While they offer comparable services they do so for exuberant fees. The names of the other facilities include:

 Shore Pointe Nursing Center26100 E. JeffersonSt. Clair Shores, 48081

Georgian East Nursing Center21401 Mack AvenueGrosse Pte Woods, 48238 St. Mary’s Nursing Home22601 E. 9 Mile RoadSt. Clair Shores, 48080

Financial AnalysisHouse Acquisition 

$30,000

Mortgage Per Month x3 Months @ 2000/Month 

$6,000

Expense for House Remodel 

$7,000

Ramp Construction for Entrance 

$5,000

Cleaning and Maintenance Supplies 

$2,000

Items for Home 

$30,000

Legal Insurance 

$2,000

House Insurance X3/Month 

$600.00

Stock Food / Supplies 

$3,000

PCT Certifications Through Red Cross 

$1,500

Fees and Licensing 

$600.00

Manager Salary x3 Months at 2000/Month 

$6,000

Employee (PCT) Salary x3 Months at 3600/Month 

10,800

Advising/PR 

$3,000

Open House Expense 

$2,000

Vehicle Lease x3 Month @ 400/Month 

$2,700

TOTAL START-UP COST 

$112,200

   

Start- up CostsSemi-private room: $2,500.00/Month or $100.00/dayPrivate Room: $3,000.00/MonthVolume (x8): $20,000/Month

Risk Assessment: SWOT ANAYLIS• Strengths• Manager on Orthopedic unit will drive business to transitional home• Perceived high quality of surgical services• Volume projected to increase during next several years• System affiliations within SJHMC• Addition on Orthopedic surgeons 2013-2015• Dedicated staff at transitional home• Home environment offered instead of nursing home environment

• Weaknesses• No insurance coverage; private pay• Competition of nursing homes in existing areas• Finding housing that will fit needs of patients  

SWOT ANALYSIS CONTINUED• Opportunities• Potential large increase in market share with patient referrals• Opening of new Hip and Knee Spa that is projected to increase

market competition• Increase patient satisfaction with Hip and Knee patients because of

transitional care after discharge• Increase in surgeon satisfaction due to collaboration of care • Threats• Increase in Acuity for Hip and Knee patients• Patients may need additional services in inpatient rehabilitation• Beaumont Orthopedic Program• Physicians not obtaining preferred operation room schedules• SJHMC program not meeting patient or physician satisfaction

objectives

Benefits of Transitional House• The development of a strategic plan for the surgery service line for the orthopedic hip and knee program is critical for success and necessary if the organization is to capture the competitive market. In the fiscal year 2010 only 491 hip and knee replacements (DRG 470) were completed at St. John Hospital Medical Center and in 2011 there were only 500 replacements since that time we have only increased an estimated 100 surgeries in two years. SJHMC needs to be more effective by applying strategies identified to improve customer and physician satisfaction and the transitional house will give our organization a competitive advantage.