You Decide Week 6

Business Problem
Name
Institution Affiliation
Abstract
In the scenario, the CFO is encountered with a problem that requires an appropriate decision that will help the thriving of the hospital. The dilemmatic decision-making is accompanied with some consequences that may result in the losses to the firm. The dilemma is as a result of the signing of the contract proposal made by the MegaPlan Insurance Company, and this will result in losses due to the huge discount offered to the company. And also, on the contrary, the loosing of the patients and nurses due to the failure to join the Preferred Provider Network that is linked with the Intertech. The best way in which the CFO can overcome this dilemma is by assuming the proposal made by the MegaPlan and also writing a contract proposal to the company with some of their requirement that should be met by the company so that they can bargain on a plain ground. The writing of the proposal to the company will give the patients hope and the willingness of the hospital to join the MegaPlan.
The problem at hand is the acquisition of the contract with the MegaPlan and some of the side effects it will bring to the hospital once it is signed. Once the contract is signed, the hospital will have to run at a loss since the discount that the MegaPlan will demand from the hospital would have exceeded the 20% which is the limit for discount to e offered by the hospital. Therefore, the signing of the contract to this insurance company will bring no good to the hospital, and it will also be difficult to run some of the activities in the hospital such as the purchase of some of the basic products since the expenses shall exceed the income.

On the contrary, failure to sign the contract with the MegaPlan Insurance Company will deter the hospital from being in the Preferred Provider Network (PPN) and will result in losing some of the patients from the hospital that will prefer going to other hospitals that are linked to PPN. And also the nurses working in the hospital might decide to go to other hospitals that are within the Preferred Provider Network. This situation will, therefore, make the hospital have few clients to attend to as well as experiencing the shortage in the manpower required to attend to the available patients in the hospital.
The main aim of the healthcare is to ensure that the patients get quality care that they deserve, and also it is important if the hospital maintains the good relationship with the patients that they have treated to retain the good reputation of the hospital. Similarly, the hospital is required to operate with the finances that can sustain its services that they offer to the patients and for that matter, the hospital activities cannot work out if the hospital is experiencing losses due to the discount that they offer to the insurance company (Beason & Callaway, 2009). Therefore, the problem arises when these two services are causing dilemma to the CFO since they should work out at ago for the hospital can operate effectively.
One of the ways that can be used by the CFO to solve the business problem is ignoring the proposed contract that is sent from the MegaPlan Insurance Company and instead of preparing a contract proposal for their own as the hospital to the MegaPlan just as if they had not received that of the MegaPlan. The contract proposal that will be made by the CFO should include the discount that they are willing to offer. The discount should be less than 20% as required by their hospital. The quoting of the discount that the firm is willing to offer to the insurance company will give them room to bargain on the discount that will not be exaggerated as compared to when the MegaPlan propose their discount that they want from the hospital (Beason & Callaway, 2009). And also since the Intertech has already chosen the MegaPlan as their insurance company, it will be easy for the hospital get a reason to explain to their clients unto why they have failed to join the MegaPlan in case the two fail to reach a consensus. The patients will also see sense unto why they should not leave the hospital for a different hospital within the Preferred Provider Network since they will have to travel a long distance looking for the services and also they will lose their original doctors who were treating them.
Reference
Beason, A., & Callaway, E. (2009). Accounts Receivable and Collections. Lessons For Financial Success, 1(1), 1-20. Retrieved from http://www.mgma.com/…/Lessons-for-Financial-Success-Ch.-3-Accounts-Receivable.pdf