Discussion: "Contract Negotiations and Risks and Operating Margins"
• In the scenario, the contract negotiations between North Creek Healthcare and the community hospital concluded with an agreement on non-financial (legal) terms. Suggest the most critical element of the contract and the impact to the short-term and long-term operational strategy of a community hospital. Indicate the potential implications to the hospital's financial targets.
• Imagine you work for a hospital where the operating margins have been consistently below national norms for the past three years. Discuss one key driver of the below average performance. Suggest one strategy to improve the future management of the driver that you've discussed.