Monday, October 22, 2012

Tactical Decision Making Criteria

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1.) The following are the components of the tactical decision making model and how it was used step by step by Golden Care Inc.

a. Recognize and define the problem

In this case, the problem is that Golden Care’s residents are aging and will be looking for more traditional nursing homes in the near future. Lacey, Golden Care’s CEO, wants to do something before it actually happens. She wants to add a nursing home to Golden Care so that it can keep its current residents and enable them to make a smooth transition to a higher form of care.

b. Identify alternatives and eliminate those that are not feasible

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Lacey and her staff brainstormed and came up with 5 ways to potentially solve the

problem at hand. They eliminated building an entirely new facility based on the

grounds that it would be too costly and involve too much risk. They also eliminated

purchasing an existing nursing home because it wouldn’t be designed to fit Golden

Care’s high quality care standards. This left them with the option of building a new

wing to an existing Golden Care facility. One location did have sufficient land

open to do this.

c. Identify predicted costs and benefits with feasible solution

At this point, Golden Care had already restricted its solution to building on. However, there are two types of markets for potential residents. Medicare/Medicaid patients provide a lower reimbursement, whereas private insurance/private-pay patients provide a relatively higher reimbursement. This translates into two different options for care Basic Care and Lifestyle Care. Both alternatives meet the high-quality care standards that Golden Care prides itself in. However, Lifestyle Care offers more luxurious benefits for the residents and consequently would be more expensive to Golden Care and thus to the patients themselves. Basic Care is a better fit for Medicaid patients, whereas Lifestyle Care is more geared towards the private paying patients. Golden Care’s accountant performed cost analyses on both care options. Now Lacey and her staff are going to determine the benefits based on the amount of revenue each type of patient would potentially bring in.

d. Compare relevant costs and benefits for each alternative and relate it to the strategic

goals of the organization

Lacey and her staff are going to compare the costs and benefits of each alternative

by also figuring in what type of patients they will be serving and in what

proportion. Their goal is to find the option that will provide them with the greatest

net benefit/income.

e. Select alternative with greatest benefit that serves the organization’s goals

After coming up with the alternative that monetary provides the greatest benefit/income, Golden Care must also take into account legal and ethical obligations concerning which type of patients it is bringing onboard. Medicaid patients cannot be evicted after they are accepted, regardless of how high costs may go. However, it is legal to refuse Medicaid patients or to force them out before they are on Medicaid. The dilemma that comes into play here is ethics, resulting in outsiders questioning if Golden Care is more concerned with the patients themselves or making money. It must weigh both of these considerations and come up with the best fit for the organization’s strategic goals.

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