case 1
Case Study #1: Green Valley Medical
AEM 4570: Advanced Corporate Finance
Name: Di Hu
Net ID: dh583 1. What are the key elements of Green Valley’s strategy?
a. What kind of hospital is it, and how does that relate to their overall strategy?
Green Valley Medical Center is a nonprofit teaching hospital comprising of 330 beds affiliated with a large state university in a midsize town located several hours from the state’s two urban centers. It was the only regional hospital, and one of only two in the state, with facilities in cardiology, oncology, and neurology, specialised in teaching, research and clinical care. Moreover, Green Valley had issued municipal revenue bonds on several occasions to finance large expansions and improvements. The key elements of Green Valley’s strategy is that administration and service department did not take part in the capital budgeting process. Since Green Valley Medical Center was a nonprofit hospital established with a federal grant, and grown with continuous support from state revenues, the board of trustees and of the previous CFO was prefer to invest in medical equipment. As the Director of Cardiology mentioned in case material that doctors have got tradition, numbers and the hospital’s mission. They were closest to the needs of the hospital and of the patients.
Those doctors could bring more benefits to hospital, such as increasing the volume of business directly, being helpful in the hospital rating and reputation. The better medical equipment could bring more patients and revenue, so the Medical Center could get more grant and state revenues to invest more capitals. Besides, Green Valley Medical
Center was a teaching hospital specialize in cardiology, oncology, and neurology. Hospital was widely regarded for the innovative work and research conducted by its medical community, so doctors had to invest in medical equipment or operating expense to continue their researches.
AEM 4570: Advanced Corporate Finance
Name: Di Hu
Net ID: dh583 1. What are the key elements of Green Valley’s strategy?
a. What kind of hospital is it, and how does that relate to their overall strategy?
Green Valley Medical Center is a nonprofit teaching hospital comprising of 330 beds affiliated with a large state university in a midsize town located several hours from the state’s two urban centers. It was the only regional hospital, and one of only two in the state, with facilities in cardiology, oncology, and neurology, specialised in teaching, research and clinical care. Moreover, Green Valley had issued municipal revenue bonds on several occasions to finance large expansions and improvements. The key elements of Green Valley’s strategy is that administration and service department did not take part in the capital budgeting process. Since Green Valley Medical Center was a nonprofit hospital established with a federal grant, and grown with continuous support from state revenues, the board of trustees and of the previous CFO was prefer to invest in medical equipment. As the Director of Cardiology mentioned in case material that doctors have got tradition, numbers and the hospital’s mission. They were closest to the needs of the hospital and of the patients.
Those doctors could bring more benefits to hospital, such as increasing the volume of business directly, being helpful in the hospital rating and reputation. The better medical equipment could bring more patients and revenue, so the Medical Center could get more grant and state revenues to invest more capitals. Besides, Green Valley Medical
Center was a teaching hospital specialize in cardiology, oncology, and neurology. Hospital was widely regarded for the innovative work and research conducted by its medical community, so doctors had to invest in medical equipment or operating expense to continue their researches.