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Healthcare Paper Number 4

In:

Submitted By jbilovecoffee
Words 3234
Pages 13
PPA-782
2011
Park Place Nursing Home
An Exercise in Organizational Change
Julie Bower
Health Services management

1. What operational opportunities can you identify? * Park Place has already obtained benchmarking information therefore it is easy to identify some of the areas that they already need to work on. However, there are so many issues to tackle that they will not be able to tackle them all at once. The leadership/organizational issues opportunities are identified in question 2. * The first thing Park Place must do is collect on their accounts receivable because their cash situation is dire. They have $2,590,609 waiting to be collected and they average around 47 days in accounts receivable, which is unacceptable for any business. Once they have collected a large portion of their accounts receivable they need to look into settling some of their current liabilities. They average 90 days in accounts payable, which means it takes them twice as long to pay their bills compared to their peers. The inability to pay their bills leads me to believe that their credit score and ability to borrow from banks if needed is poor. They are probably paying a mark up on some of their services because they are unable to pay vendors on time. This is the start to cleaning up their financial situation. It is important that they do this because their long term debt to total assets ratio is .75 compared to the benchmark of .51. This is a poor indicator of performance that anyone can observe, including lenders. Since Park Place is strapped for cash, if an emergency were to arise they would probably not be able to secure a loan or would have to pay an extremely high interest rate which would continue to hurt them financially. Park Place could also look to leverage some of their PPE since they seem to have a great deal of it to help pay off some of their debts

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