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uestion: Background John and Katie Hamilton owns a prosperous home health business called Innovative HealthCare Inc. (IHC). IHC is a home health...


John and Katie Hamilton owns a prosperous home health business called Innovative HealthCare Inc. (IHC). IHC is a home health business with 200 employees. John is very knowledgeable in the world of business as he holds an MBA and Katie has earned a bachelor degree in Nursing and Master degrees in both Occupational (OTR) and Physical Therapy (PT).

They specialize in physical therapy, occupational therapy, speech therapy, and various nursing services. They are headquartered in Dallas, Texas, have annual revenues of $32M, and have several stockholders. They have been in existence for 15 years. The organization has called you in as a consultant to assess the organizations business and provide them some guidance. Here is some information data that needs to be considered for the assessment.

Current Mission:

"They made and establish a well-known iconic name in the health care field that cares for those who are elderly and disabled. IHC is founded upon principles of trust and care and exhibits these two principles each day in caring for our patients. Our focus is to increase the quality of living for our patients, but to make the communities we serve a better place to live".

Current Vision:

"Creating a better quality of life"

Factors for consideration

·        See the attachment from regarding the City of Dallas. The link This will get you familiar with the area and help you understand their environment.

The organization has grown in employees over the last fifteen years at an impressive rate, not to mention their customer base. This is due in part to their high quality of work and of course, the booming economy of the DFW area.

The city of Dallas has often showcased them as the Company of the Month and twice they have won the Organization of the Year. Their retention rate is 92% annually, due in part to their sparkling reputation, and they are now considering branch out to either Ft. Worth, Arlington, or both. They are adding new employees every month, especially in the areas of occupational and speech therapy. The new employees don't get a great deal of training which has caused some issues with proper care. The organization feels that training is not necessary because they will learn as they go.

The organization currently has ten OTRs (Registered Occupational Therapist), sixty COTAs (Certified Occupational Therapy Assistants), ten PTs (Physical Therapy), sixty PTAs (Physical Therapy Assistants), thirty RNs (Registered Nurses) and sixty LVNs (Licensed Vocational Nurse). Although the state requires that the COTAs work directly under the supervision of an OTR and the PTAs work under the direct supervisor of a PT, the COTAs and PTAs have just about the same liberties as the OTRs and PTs as for as dealing with patients. The Affordable Care Act (ACA) has created a great deal of issues for all medical professions. In fact, many of those in the home health field are strongly considering leaving the profession due to numerous financial cuts the government has made to this medical field. Furthermore, many schools are reporting their enrollment numbers are down due to the concern the ACA has created. Morale remains high even though these concerns are lingering.

The organization has a brick and mortar location, but due to technology (texting and email), a large percent of the employees receives their work orders by way of computer or cell phone and thus, come into the office only once a week. As with many industries, the health care profession is full of competitors and IHC is no exception. Care-For-All Inc has a large percentage of market share. In fact, IHC ranks fourth regarding market share in the Dallas area behind, Care-For-All Inc., US Health, and DFW Health Care Professionals.

There have been several claims filed against IHC due to patients claiming they were not cared for properly and that the caretaker caused them some unnecessary pain. In addition, there have been several male and female employees make mention that they have been made to feel uncomfortable within the workplace due to what seems to be sexual harassment. The organization has grown over the last few years and although they have excellent equipment, there are some wheelchair ramps within and outside of the facility that are in need of repair. Even though their finances seem to be very good, these repairs continue to go unrepaired.

IHC has provide you with a partial list of their finances. Although they have confidence in you regarding privacy, they wanted to limit their information to prevent information overload, so they provide you with these accounts and figures.

Income Statement


Patients Care                                                    $20,500,000

Governmental Contract Income               $11,500,000       

Total Revenues                                                $32,000,000


Employee Salaries                                           $13,300,000 

Employee Benefits                                         $ 5,320,000

Rent Expenses                                                 $    120,000

Utilities                                                               $      55,000

Equipment                                                        $    130,000                                                        

Maintenance and Repair                              $       75,000

Taxes                                                                   $  5,000,000

Total expenses                                                $24,000,000       

Net Income                                                      $ 8,000,000

Balance Sheet


Current Assets

Cash                                                                     $ 2,000,000

Accounts Receivable                                      $   800,000

Inventory                                                           $ 1,500,000

Investments                                                      $ 2,000,000

Total Current Assets                                     $ 6,300,000

Property and Equipment

Equipment                                                         $ 1,200,000

Total Assets                                                      $ 7,500,000

Current Liabilities and Stockholder Equity

Current Liabilities

Accounts Payable                                            $ 1,200,000

Notes Payable                                                  $ 1,000,000

Accrued Expenses                                          $   800,000

Long Term-Debt                                              $ 2,000,000

Total Liabilities                                                $ 5,000,000

Stockholder's Equity

Common Stock                                                 $ 1,500,000

Treasury Stock                                                  $ 1,000,000

Total Stockholder's Equity                           $ 2,500,000

Total Liabilities and Stockholder's         $ 7,500,000


               MGT 6203.e1 - IHC Case

Case Questions.

1)     Based on the case, consider three Strengths, Weaknesses, Opportunities, and Threats that the organization could potentially benefit from that were not mentioned in the text.

2)     When you consider the case, what do you see as the organization's strategy, and are they conducting themselves to achieve this strategy?

3)     Of the components mentioned in the case regarding the external/industry environment, which two (one that benefits them and one that does not) seems to be the ones that is impacting them the most? What would you do to change this one that is negatively impacting them, and how would you capitalize on the one that is benefitting them?

4)     Based on the case, who do you see as their target market? Be specific in identifying this market. Consider items like (occupation age, income, family status, education).

5)     Let's say for argument sake that the following is the organizations financial statements. Calculate the ROA and ROE. Based on this information. What does this tell you about the organization financials and how they are using their assets and equity.

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