Case Study: St. Edith Memorial Hospital

Cite this

SWOT Analysis for St. Edith’s Memorial Hospital


St. Edith’s memorial hospital has some strength that purposes it to continue offering services, although encompassed by many weaknesses. St. Edith memorial hospital operates in a spacious general-purpose hospital. This is an advantage to the entire hospital, and the mass within the environs. These play an important role in the process of expanding and super service provision if well managed. The space provides a flexible basis for a reasonable management committee to rethink and diversify the product or the services that the hospital offers.

These will properly ensure more income is generated hence cease the prevailing financial hardships. The hospital also has a relative advantage because it has professional doctors. The hospital has well-trained and experienced senior medical staff, including the surgeons with flourishing professional ethics. These place them in a better chance of reinventing and remolding the hospital to undoubted standards. With these kind of strengths, the hospital can tremendously grow to it is anticipate level.


Unfortunately, numerous weaknesses surround St. Edith memorial hospital internal environment is. The weaknesses are almost in every department or division within the hospital.

We can narrow down these weaknesses in the following sub-headings for relevant discussion and understanding.

Outdated or obsoleteness of the technology-This is among the main issues that cause substantial problems to the hospital. From a case study of St. Edith memorial hospital, it is a clear outline that outdated technology plays a significant role in ruining the hospital. The IT department provides or supplies the hospitals with programs that do not correspond with dynamic environment within which the hospital operates.

The immediate competitor of (neighboring hospital) has capitalized on this factor hence competing favorably in the industry. Like Stefan and fellow surgeons, believe that the St. Edith memorial hospital is losing out to its rival because of old-fashioned and out of touch with modern medical technology and surgical techniques. This affects the hospital ability to attract the affluent private healthcare patients. With the lack of affluent private healthcare patients, the hospital’s revenue reduces in the end facing the financial crisis.

Skills gap

For a company or a business to succeed, excellent skilled work force or labor is essential. No one doubts the professionalism of the workforce in the hospital. However, in between the qualified and skilled labor force in the hospital, we have individuals who are unskilled or unqualified. These unqualified or unskilled persons, in one way or another, they fail in their responsibilities leaving a vacuum in their divisions in the end reloading other staffs. In this case study, we meet these kinds of people. First, the management committee, which has ultimate responsibility for directing the activities of the organization, ensuring and delivering the outcomes for which it has been set up. The management committee of St. Edith memorial hospital should provide leadership to the organization by setting the strategic direction to guide and direct the activities of hospital. The committee has also a mandatory to ensure the effective management of the funds and other activities. Instead, this committee has failed in it is obligations, more surprising, the one requesting for action from other people.

It is worth noting skills gap also prevails in the IT department. The IT department of the hospital is full with individuals who are either unskilled or unqualified. These people do shoddy work that does not meet the organization requirements. This has put the department and the hospital at large in a deteriorating condition.

Substandard service

The St. Edith memorial hospital is also offering poor-quality services compared to its immediate competitor. The case study shows that the more depressing issue to the hospital is the failure to attract private healthcare patients. This is due to the poor-quality services that are in the hospital. A significant number of patients fail to get the treatment they needed because they lack private healthcare insurance. The time to see consultant the surgeon was also tedious.


The St. Edith memorial hospital is in a position to uncover several opportunities strategically positioned for exploitation in order to benefit from them. The medical staff that experienced has the potential to yield multiple results when fully utilized through strategic services, hence increased inflow of privately sponsored patients. This automatically will lead to generation of more income. If the hospital outsources the communication and information system, with major medical specialist Company at a fair price, it will cut down on costs while increasing access to hi-tech facilities and equipment.


The main threat the hospital is facing is stiff competition from the neighboring hospital that is providing better services. The other disgusting threat that hospital faces is the technological advance. The rapid changes in technology pose a threat to the stagnating hospital. The decision by the government to revise its grant to the hospital is another threat. From the case study, we find that revenue from the government is under pressure as the government sought to reduce public expenditure in order to fund significant tax cuts (Bruner, 2003).

Comment on St. Edith budgetary planning and control process

Of all business activities, budgeting is one of the useful document and therefore requires a detailed attention. Its an important tool in coordinating the activities of the company or a business. This formal statement of financial resources is set aside for carrying out specific activities in a specified time (Bragg, 2004). In the beginning of the case study to the end, the St. Edith memorial hospital budget generated substantial controversy. The budget planning and control process used are totally subject to criticism. From the start, the budget system of the company is not in order. A controlled budget needs to have a control technique to compare the actual results and budgeted estimates.

The hospital indeed lacks this significant tool or measure in it is budget structure. This makes the budgeted projects unrealistic and unreliable for any future developments within the organization development structure. Budget control is essential since it provides any variances made hence key individual can exercise control action or revise the initial budget. It is important to note that the hospital budget structure is poorly organized. Well-organized budget system has a budget control and responsibility centers. From the case study, it is evident that the hospital systems do not meet the standards of a contemporary medical information system.

Responsibility centre is responsible for exercising budgetary control. These responsibility centers may include revenue centre, expense centre, profit centre and investment centre. After obtaining the proposals from these centers, the hospital needs to revise its budget by a selected budget committee.

St. Edith hospital’s budget is pressure device imposed by certain departments. This has led to bad relations of labor, disputes over resources allocation and departments blaming each other.

From this perspective, it is difficult to reconcile corporate goals. The issue of all concerned individuals or departments in budget is very important thus, the St. Edith hospital has not considered this as relevant in its budget planning. Budget planning requires participation of people as many as possible. However, this is the opposite of the hospital budget planning. For instance, the last budget prepared by the IT department on integrates stock management and creditors’ payment system. The budget, on the other hand, must be comprehensive in order to embrace the organization at large not certain divisions within the organization.

New proposed planning and control system

Budget organization and administration

Budget organization and administrations are useful tools in the budget planning and control process. In organizing, planning and controlling a budget system, it is important to consider the structure of the system. The St. Edith hospital should restructure and re-organize it is budget system to involve the following important and necessary centers. These, include the budget committee, the budget centers, budget officer and budget manual. These units are very resourceful in budget development. It is important also for the organization to have budgetary control and responsibility centers (Dayal et al., 1996).

These are functional units under the control of a manager. They may include revenue centers where the authority subjects the output on measurement based on monetary terms, to determine the value of the profit and investment centers. Every center is responsible for evaluation and implementation of best-desired results. According to Don et al (2007), proper decisions ensure effectiveness and efficiency deriving solutions to impending problems or challenges. The hospital should have such a system that will be able to plan, organize, control, coordinate and direct the budgetary activities of the hospital. This will ensure that management cushions its self against problems developed from the financial perspective like the present one. It will also enable the hospital to carry out its operation smoothly and effectively (Fenwick, 2011).

Possible improvements to St. Edith financial and medical performances

In St. Edith, memorial hospital there has been going difficult moments. Fields (2011) noted that the general services at the hospital have remained paralyzed by financial deficit or hardships. The quality, character, value, reputation and the general services at the hospital have deteriorated since day and night (Fortenberry, 2010). The hospitals’ (once a giant in the less affluent part of a North America City) has lost much in the provision of quality health services. The neighboring hospital has outsmarted it in health industry (Jiambalvo, 2009). However, hope is not faded since plans are underway to regain the lost glory. Fortunately, the hospital management committee is amicable trying to lay down strategies to see the hospital regain rapidly. Some of the sectors that are main considered by the concerns are financial and health departments (Kaliski, 2001).

Financial performances

Another coalition chaired by Ellroy Jones represented the financial performances of the hospital. The views of this coalition frequently espoused the IT functions. According to Elroy’s view, the IT department was incredibly miss-managed and represented a critical waste of resources that stood allocated in other productive investments (Kendrick and Vershinina, 2010). The fact is true on opinion that the hospital can source these functions at a cheaper price. These comply with the strategic decision of make or buy strategy. It means if the in-house production cost is cheaper than to buy, then it is good to produce it and vice-verse. The important homegrown applications (PAS, SIS, and HRM) would be phased out and replaced by leading COTS products, which is to be outsourced to local specialists (Label, 2010).

Improvement on medical performances

The management committee has to find if essential to review the health structures in the hospital. It anticipates through these revisions and implementation; it will stand a better chance to compete favorably with its immediate competitor in the industry (Prowle et al., 2005). Through various discussions, the management committee has resolved to improve it is deteriorating healthcare division. This can be addressed from the interventions that came out clearly from the case study (Weaver and Weston, 2007). First, we encounter an intervention to improve medical performance from a coalition represent by Stefan kopechnik, a consultant surgeon. Stefan is in favor of implementing a state-of-the-art EPR system (Electronic Patient Record) which will include the issue of handheld PDA units to all medical staff. The system will improve the hospital medical performances because it will assist in accessing and presenting patient data in real- time via wireless LAN and in return improve the performance of all the concerned (Weaver and Weston, 2007).

The team of Surgeons believed that the hospital was losing to their competitor due to old-fashioned and out of touch modern medical technology surgical techniques. To their great concern was that this was a way forward in achieving improved medical performances and restoration of reputation to the hospital. EPR system would hold personal and medical information about all hospital patients in real-time and make it instant available to authorized users in whatever format through whatever device that suits their needs (Shim et al., 2011).

St Edith Memorial hospital

Incorporated expenditure and income statement for 2011 and 2012 £000’s

Income streams 2012 2010
Income from central government 90,000 86,000
Income from local government 25,000 22,000
Income from medical insurance 70,000 65,000
Total income 185,000 173,000
Cost analysis
Labour costs 65,000 60,000
Depreciation 24,000 22,000
Drugs 35,000 33,000
IT and communications 1,000 1,000
Other variable costs – catering, laundry 14,000 13,000
Fixed costs 15,000 15,000
Total costs 154,000 144,000
Surplus/deficit 31,000 29,000

The incorporate budget gives an overview of how the budget would be if the improvements on financial and medical are implemented and managed effectively. Financial improvements will lead into reduction of IT costs that will be outsourced at a cheap price. On the other hand, medical improvement will lead to an influx of patients both private and governmental. This in will lead to more grants from the government, city council and the insurance company. In the end, the hospital will operate on a surplus point.

Cost benefit analysis methodology

The cost-benefit analysis (CBA) is essential in the daily business process. The cost-benefit analysis is extremely concerned with how the management weighs options (Boardman, 2006). St. Edith memorial hospital has decided to start a project that it anticipates will make things work. It is considering expanding its C&IT support by developing an integrated stock management and creditor payments systems. A business that is wishing to expand or buy new software to improve its business requires conducting a cost-benefit analysis before acquisition.

With St. Edith memorial hospital’s current decision of acquiring or expanding the C&IT support by developing integrated stock management and creditor payments system, do not comply with the cost benefit methodology. I greatly disagree with the project of expanding the communication and information technology support system. First, more resources have been injected into IT department but only incredible results are the outcomes. Considering the personnel in the IT department are unreliable and not productive in terms of providing best results, I decline to support this idea.

The department is in command of persons who are not goals oriented except being opportunist. For example, the hospital system that proved reasonably successful was developed whilst the department manager was in a leave. Even more depressing is that someone from the finance section developed the software. When the manager returns, he immediately justifies the recruitment of another programmer. The decision is quite irrelevant for a manager of such profile to take. No benefit analysis he has examined before reaching to that decision.

Secondly, from the cost-benefit analysis point of view, the project should be rejected. Qualitative and quantitative analysis on the projects costs and benefits must be the priority before dissemination and implementation of the project. From the budgeted figures, it evidently shows that the cost of expanding the C&IT is very expensive. More so, it is just purchase and development cost only. Considering that the project deals with software, it is important to note that it will require installation and management training fee. This will lead to an extraordinary expense thus pointlessly stretching the budget. This kind of strategy does not also devise a round strength of the hospital.

The underlying project also fails the assessment from the point of cost and the value of return. The project’s costs seem to be higher than the return. A good investment should be safe. To achieve adequate rate of return, investments should be in safe ventures. Although the project is safe, it is time plan and rate of return on investment is not quite satisfactory. The estimations have to be made in an adequate manner, which increases earning capacity of the hospital. If you internally analyze the situation in the hospital, you will find it is unnecessary at the point to develop creditors’ payment system while the hospital is in need of cash to propel its activities. The main objective of the hospital is to provide quality services to the entire community, which really needs best healthcare. However, to develop a system for creditor payment is good, but it is not among the priorities that the hospital needs to address.

The project strategy will not improve St. Edith memorial hospital services to greater heights. However, the hospital is facing the problem of old-fashioned technology, the investment in integrated stock management and creditors’ payment systems are inappropriate. The investment in these areas not only wastes funds, that can be channeled into another useful area, but it is also poor disposal of resources. The positive impact that this investment is to generate is minimal.

It is worth to note that sometimes it’s necessary in CBA to evaluate the benefit of valuing the human life.

There is considerable antipathy in general public to the idea of putting money on human life. According to Mullerat and Brennan (2005), economists recognize the impossibility to fund every project, which promises to save a human life, and that some rational basis is required to choose the one to approve and the one to turn down. The controversy defuse when it is recognized that the benefit of such projects is in line to reduce death risks. For example, in case study of St. (Nas, 1996).

St. Edith memorial hospital, find out that the hospital is failing to attract private healthcare patients. This is because the hospital lacks facilities that are more attractive and has no good reputation for patients care. This calls for substantial amount to invest in such like projects that their chances of return are high. Therefore, it is significant for the management to inject those funds in areas that primarily deter death before selecting other options (Brent, 2006). With or without this project, the main objective of the hospital remains to save life. However, with the project, the management of the integrated stock and payment of creditors will be easy. The systems will improve the services given to creditors. Indeed, it will have moved the hospital technology to another level (Clarke and Frew, 2010).

Another strong point why I disregard this project is the outcome or benefits from the project compared to its costs. If the discounted present value of the costs exceeds the discounted present value of the benefits, then the project is unviable (Pearce, Giles and Mourato, 2006). From this perspective, the value of this project to improve the business is too low compared with it is approximated cost (Finkler, Ward and Baker, 2007). The project is very expensive while the promising accrual benefits are low. In addition, the funds required to carry out all of the projects with positive net present value are high to the funds available. This means that hospital is forced to look for external funds to supplement the projects. I wish the hospital management committee will rethink rational and disqualify these kinds of project and such given point (Kongstvedt, 2007).

Logically, no management committee can approve such kinds of segmental projects at the expense of public health. Since it a mandatory of finance manager to plan, procure, utilize the funds and exercise control over finance, I advice him to revisit the project plan before implementation. He must make sure that; cash is management is promising; decide on allocation of funds into profitable ventures and make estimation with regard to capital requirements. To achieve greatly, the St. Edith memorial hospital must efficiently revise and dismiss these projects.

The St. Edith arrangements for corporate governance

The UK has combined code for governance stipulates main and specific principles of corporate governance, according to four broad areas. According to the code, the board of directors of a company is responsible for its success. It has the mandatory to put in place effective controls that will identify and manage the risk for the business (Muennig, 2008). St. Edith memorial hospital has practically failed to abide by this code. The board of directors, which is responsible for critical decision-making, presents itself like a toothless big dog. This is because the board fails to control the mounting pressure on effective and efficient management of the hospital instead, it anticipates for decisions from other in individuals (Brent, 2003).

This is a clear and undoubted indication of an ineffective and inefficient board. Ineffective because it cannot manage, control and execute its decisions in line with board responsibilities. Inefficient because it fails to take decisions that objective and in the best interest of the hospital. For example, a top -ranked board member the chief executive officer calls for the reduction of time length a patient spent in the hospital in order to cut down the costs. This raises hot debate since it does not only worsen the situation but will increase the costs of the hospital. This ample evidence clearly shows that the board is ineffective and inefficient. In the end, it has failed to focus on the development and dissemination of insights on the strategic management process as well as fostering control of the hospital activities (Ray, 2008).

According to the UK combined code, the board must present a balanced and understandable assessment of the company’s financial position, and it is prospects. The board also has a mandate to maintain a sound internal control over the company’s asset and shareholders’ investments (Reh, 2010). St. Edith memorial hospital is a clear example of a failed institution to abide with this code. The hospital stagnates in providing a sound internal control on the assessment of the ideal projects that the hospital is supposed to engage in (Berger, 2008). The hospital operates mainly on decentralized budgets in every division or department. Every department produces its budget, which is not subject to revision from the hospital main central budget. Some budgets are overestimate regarding the current financial crisis that the hospital is going through. For example, the IT department budget does not value this situation. Unfortunately, the department through its manager justifies the recruitment of another programmer as day-to-day system maintenance and general trouble-shooting grew with the installation of each new. The programmer is hired on contract basis and enjoys high remuneration of 1700 pounds per week. This is a sign of incredibly mis-managed and represents a criminal waste of resources that can be re-allocated faster to improving patient care. I criticize the St. Edith memorial hospital based of the fact that it has no outline framework of financial management.

The accountant and the financial management team should address the financial wrangles that surround the hospital. It is easy to identify that the hospital lacks implemented and organized financial experts who can properly address the financial issues (Bernard, 1999). Either the corporate governance has no auditing committee, or it is inactive. This put the hospital financial operation at a stake leading to misappropriate financial management. The hospital should be using the auditor’s report in trying to rectify the financial crisis within the institution.

These experts are significant tools in planning and directing the business financial activities with an upper hand in financial knowledge (Bernard, 1999). These experts would have ensured regular and adequate supply of funds to the concern. In addition, the experts will have made estimation concerning capital requirements of the hospital. St. Edith memorial hospital has not involved these experts in their financial decision-making. This kind of institution should be in a position to utilize and put in place all financial elements that are required development (Richard et al., 1994).


Based on the case study of St. Edith memorial hospital, I dearly recommend proper analysis to be done on management board. In order to check ineffective and inefficient tactics they employ in resolving the crisis. Qualifications and skills in managing such a highly reputable institution must be of distinction credibility.

I recommend the institution to restructure and to implement credible finance department. This department will be generally concerned with procurement, allocation and control of financial resources of the hospital.

The financial management department will ensure that regular and adequate supply of resources (funds) to the hospital. This will solve the issue of financial crisis that the hospital is currently facing. This will deter misuses of funds in departments’ i.e. in IT department where funds are direct in unsafe investment ventures.

I recommend the hospital to plan a sound and a reputable capital structure. In the end, this will ensure a sound and fair composition of capital structure.

I also recommend St. Edith memorial hospital implement a unitary budget that will receive supervision from the finance manager. Budgets from other departments would be converged to one point for revision and approval. The finance manager has a mandate to make decisions concerning cash management.


Bragg, S. M., 2004. Controller’s guide to planning and controlling operations. New York: John Wiley and Sons, 2004.

Bruner, R. F., 2003. The portable MBA. New York: John Wiley and Sons.

Dayal, R. et al., 1996. Accounting and budgetary management, Mittal Publications, 1996

Don R. Hansen, D. R, Mowen, M.M and Guan, L., 2007. Cost management: accounting & control. New York: Cengage Learning.

Fenwick, W., 2011. The SAGE Handbook of Educational Leadership: Advances in Theory, Research, and Practice. New York: SAGE.

Fields, E., 2011. The Essentials of Finance and Accounting for Nonfinancial Managers. New York: Cengage Publishing.

Fortenberry, J.L., 2010. Health care marketing: tools and techniques. New York: ones & Bartlett Publishers.

Jiambalvo, J., 2009. Managerial Accounting New York: John Wiley and Sons.

Kaliski, B.S., 2001. Encyclopedia of business and finance. New York: Macmillan Reference USA, 2001

Kendrick, M.D and Vershinina, N., 2010. Management-International Edition. New York: Cengage Learning EMEA.

Label, W., 2010. Accounting for Non-Accountants. New York: Sourcebooks, Inc.

Prowle, M. et al., 2005. Financial management and control in higher education, Routledge, Cengage Learning

Shim, J.K and Siegel, J.G, Allison I. Shim, A.I., 2011. Budgeting Basics and Beyond. New York: John Wiley & Sons.

Weaver, S.C. and Weston, F.J., 2007. Strategic financial management: applications of corporate finance. New York: Cengage Learning.

Berger, S., 2008. Fundamentals of health care financial management: a practical guide to fiscal issues and activities. New York: John Wiley & Sons.

Bernard, P., 1999. Integrated Inventory Management. New York: Edward Elgar Publishing.

Boardman, A.E., 2006. Cost-benefit analysis: concepts and practice. New York: Pearson/Prentice Hall.

Brent, R.J., 2003. Cost-benefit analysis and health care evaluations. New York: Edward Elgar Publishing.

Brent, R.J., 2006. Applied cost-benefit analysis. New York:Edward Elgar Publishing

Clarke, P.M and Frew, M., 2010. Applied methods of cost-benefit analysis in health care. Oxford University: Oxford University Press.

Finkler, S.A., Ward, D.M and Baker, J.J.2007. Essentials of cost accounting for health care organizations. New York: Jones & Bartlett Learning.

Kongstvedt, R. P., 2007. Essentials of managed health care. New York: Jones & Bartlett Learning.

Mullerat, R and Brennan, D., 2005. Corporate social responsibility: The corporate governance of the 21st century Kluwer Law International. New York: Cengage

Nas, T.F., 1996. Cost-benefit analysis: theory and application. New York: SAGE, 1996

Pearce, D.W and Giles, A and Mourato, S., 2006. Organisation for Economic Co-operation and Development Cost-benefit analysis and the environment: recent developments. New York: OECD Publishing.

Peter Muennig, P., 2008. Cost-effectiveness analyses in health: a practical approach. New York: John Wiley & Sons.

Ray, A., 2008. World Bank Cost-benefit analysis: issues and methodologies. The University of California: The University of California.

Reh, F.J., 2010. Cost Benefit Analysis. Web.

Richard, G.P et al., 1994. Cost-benefit analysis. Cambridge University: Cambridge University Press.

Cite this paper

Select style


BusinessEssay. (2022, December 16). Case Study: St. Edith Memorial Hospital. Retrieved from


BusinessEssay. (2022, December 16). Case Study: St. Edith Memorial Hospital.

Work Cited

"Case Study: St. Edith Memorial Hospital." BusinessEssay, 16 Dec. 2022,


BusinessEssay. (2022) 'Case Study: St. Edith Memorial Hospital'. 16 December.


BusinessEssay. 2022. "Case Study: St. Edith Memorial Hospital." December 16, 2022.

1. BusinessEssay. "Case Study: St. Edith Memorial Hospital." December 16, 2022.


BusinessEssay. "Case Study: St. Edith Memorial Hospital." December 16, 2022.