Bridgestone Behavioral Health Center Case Study

2. What does a high weighted average contribution margin (WACM) percentage mean for the management of Bridgestone?

The profitability of the business is essential in deciding wether or not to invest in shares

To consider this I will be looking at the Income Statement. If the company’s revenue exceeds its expenses it will report net income or will report a net loss. This will report on the success or failure of the company’s operation by reporting its revenue and expenses.

“Health maintenance organization (HMO) quality on several primary care indicators and more rapid quality improvement, despite its substantially lower level of expenditure” (Rosen, et al., 2011, p. 15). In the medicinal services organization, the proper goal of any human services system is to grow the cost dispersed to patients. The cost of the human services measured as far as the patient results achieved per dollar expended. It does not matter the kind of various service supplier or volume of service delivered that matters, however, the cost. More care and expensive care is not really better

* In 2005, the profit was approximately ($144,000 / $5,500,000) 2.6% of sales; does this number indicate whether the company is doing well or not?

The patient’s preference to certain treatments defines how utilization management works. Patients in the same region may prefer a single treatment to another or patients of a specific age demographic may opt out of surgery when a younger crowd may see it as the only option (Kongstvedt, 2007). The third and final category of unwarranted care is supply. The term does not refer to supplies as in the usage of equipment or tools needed to perform a job. The word “supply” is referring to the treatment that is most available is the most often used in regards to a patient’s care. For instance, in a state that the majority of the population is elderly patients, who use Medicare, will have higher per capita spending for Medicare patient’s than the states that do not have a high population of elderly residence using Medicare services (Rodwin 1996). With these categories in place, managed health care organizations can group health care into these categories and establish parameters for reducing cost and create cost effective utilization of health care resource to all of their customers. Utilization management was set in place to contain costs, but one might also assume that by correctly using the management techniques insurance companies and hospitals alike could manage the unwarranted health care given to patients.

Millions of Americans in underserved communities are inadequate access to primary care services. According to AAMC (Association of American Medical Colleges), by 2025, the shortage of primary care physicians we might face would be around 31,100. According to CMS (Center for Medicare and Medicaid services), in 2013, the US retail prescription drug increased 2.5% to $271.1 billion compared to 0.5% growth in 2012, and prescription drug volume is increasing. However, the net benefits of this use is not maximized because healthcare spent on physician and clinical services kept increasing 3.8% in 2013 to $586.7 billion compared to 2012. Pharmacists who provide medication therapy management (MTM) for Medicare part B patients can help to

In June of the current year Dr. Thomas Russell, Executive Director, and Susan Smyth, Accountant, at the Bridgestone Behavioral Health Center were discussing the necessity of gaining a better understanding of how to monitor the Center’s operating and financial performance. Located in Cleveland, Ohio, Bridgestone provides prevention, intervention, and treatment services for individuals with substance abuse problems. Bridgestone’s management is concerned about its financial performance after realizing a loss in the prior year although a small profit was projected. Despite management’s concern and attention of Bridgestone’s profitability troubles, the

Also, according to its leverage ratios, the company’s debts are not only very high, but are also increasing. Its decreasing TIE ratio indicates that its capability to pay interests is decreasing. The company’s efficiency ratios indicate that despite the fact that its fixed assets are increasingly being utilized to generate sales during the years 1990-1991 as indicated by its increasing fixed asset turnover ratio, the decreasing total assets turnover indicate that overall the company’s total assets are not efficiently being put to use. Thus, as a whole its asset management is becoming less efficient. Last but not the least, based on its profitability ratios, the company’s ability to make profit is decreasing.

Healthcare of Tennessee has purchased new robotic machines that do the counting and packaging of the drug therefore they are able to cut back on their employees, that will allow them to cut the price of their prescriptions. The government is constantly adding new guidelines that the pharmacy

Recently, the company announced a quarterly loss of $1.1 billion, or ($0.86) per share, the fifth quarterly loss in a row. There is no problem with the COP’s strategy. In fact, the company’s management has been doing an excellent job of considerably lowering their production cost,

Also, the drug distribution division has been forced to lower its prices by health care providers, patients, insurance companies and HMOs. Moreover, related costs are increasing, reducing profit margins of the company. This division is not as profitable as other three divisions, generating less than 50% of the company’s total profits,

Operating profit margin figures in the table above show the return from net sales[13]. However profit margin ratios are high enough for the 3 years, there is a fall from 12.86% to 11.26% during 2011-12. Sales revenue increases with a higher rate than gross profit so there is a poor

Every company for example Wal-Mart worries about its profitability. One of the most regularly utilized implements of financial ratio analysis is profitability ratios which are utilized to figure out the bottom line of the company. Profitability measures are vital to corporation managers and owners alike. If a small industry has outside stockholders who have put their own money into the corporation, the primary owner surely has to show profitability to those equity stockholders. (Blanchard, 2008)

One of the creative strategies implemented was to stop the purchasing of intravenous medications. Oral medications, which are less expensive, were purchased by pharmacies for patient use. Pharmacies nationwide also had to eliminate resident positions, reduce student rotations, cut back hours of services, and place capital projects on hold. Management in health care organizations had to analyze their financial situations and determine if it was possible for them to remain open. Unfortunately, some pharmacies had to close their doors (Thompson & Karpinski, 2009, pp. 7-9).