Case Study In Coporate Finance

GENESIS HEALTH VENTURESBackground coevals wellness Ventures of Kennett Squargon , Pennsylvania , was implant in May 1985 to meet the health cover unavoidably of the of age(p) population . It has over 350 nursing homes and assisted living communities click across 16 states in the U .S . These facilities tend to to a greater extent than 7 .5 million patients (above the age of 65 ) and represents health c be spending of about 90 millionIn addition , the friendship provides and sells work like pharmaceutical safeguard , medical supplies and equipment , home infusion therapy rehabilitation services and wellness programs p It currently runs at 90 occupancyBy 1999 , the connection had started experiencing pecuniary difficulty . In evidence 2000 , it was already in duologue concerning capital restructuringKey IssuesThe key is sues areThere is a lot of competition in this market . contemporaries health Ventures ends up competing with not-for-profit organizations . These organizations do not pay tax and are able to observe a lot of money to bring because individuals are encouraged to carry donations so that they can whoop it up tax shieldsA redistribution of the trade efforts pick ups to be done so that Medi shell out patients can be the highest number of patients , followed by cloistered Clients and thence Medicaid patients . Otherwise , the per diem amounts need to be adjusted . Medicare and Medicaid patients puzzle out up the bigger persona of the clients of Genesis wellness Ventures . In situation based on Exhibit 6 , they make up more than than 50 of the clientele with Medicaid representing 39 , Medicare 14 and private clients 47 Medicare patients make up just 15 in volume unconstipated though Medicare patients are aerated the highest per diem 294 ) and are the most advantageous mark et . On the other spend , Medicaid clients ! who are just about 40 of GHV s clients are being charged the lowest (only 111 .

Private patients (49 in volume ) are charged 154 (Exhibit 5Another issue is that a profit-making enterprise like Genesis wellness Ventures should not be providing services likes sub- needlelike medical services at a lower cost than hospitals or traditional acute care centers . It makes it run at a expiryRisksThe company is operating(a) in an sedulousness that experiences labor shortages and therefore increased salaries . Because of this , it is undemanding for labor shortages to invasion profitability of healthcare providers like Genesis Health VenturesBecause the intentness is so volatile , Genesis Health Ventures should not trait fixed-fee contracts because it could end up running at a lossDue to the colony on political science regulation and the government prune towards lower re-imbursement rates (so that they can scale clog health care expenditure , it is too easy for Genesis Health Ventures to end up running at a loss . Some legislation result in trading trading operations like GMV having to pay fines , payment withholdings or to be liable(p) to criminal charges or exclusion from the programRecommendations and detailed support for recommendationsThe company needs to do some Cost Accounting so that it can determine its most profitable lines and concentrate more efforts there so that it can generate more...If you want to pop off a full essay, order it on our website: OrderEssay.net

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