St. Francis Assisted Living Facility St. Francis Medical Center, a 450 bed rehabilitation non-profit hospital began to see a significant decline in admissions. St. Francis' mission focuses on inpatient and outpatient rehabilitation of the severely injured and catastrophically ill. While the patient census varied from month to month, it appeared to the St. Francis Board of Trustees that the inpatient population was slowly but steadily declining. The hospital's market researchers reported that fewer people were being severely injured due to the popularity of seat belts and bicycle/motorcycle helmets. In order to get a handle on the future of the organization, the Board, and the CEO, Sandra Kline M.D. called for a major strategic planning effort to take place.
In January 2018, St. Francis held a planning retreat to identify future opportunities. The outcome of the retreat was that the Medical Center needed to focus its efforts around two major strategic initiatives. The first, a short run initiative, was to be more cost effective in the delivery of inpatient care. The second, a long-run strategy, was to develop new programs and services that would capitalize on the existing, highly competent rehabilitation therapy staff and St. Francis's excellent reputation in the region.
At the time of the retreat, Sandra Kline's parents were living with her family. Her parents were aging and developing many problems common to the elderly population. Their medical needs were increasing and it crossed Sandra's mind that the hospital Board might consider to expand the Medical Center's campus to include an assisted living facility.
In March 2018, Sandra had her Business Development team prepare a rough estimate of the potential return on investment of an assisted living facility. She asked the team to identify different options for facility construction and the associated costs. The team also did a complete competitive analysis and examined the options for services to be offered based on St. Francis's potential population base within the local area. The Business Development team visited several facilities across the country. The team also interviewed companies that could oversee the design, building, and operation of the facility for St. Francis. The development team produced a preliminary business plan based on the recommended structure for the facility, estimated capital expenditure needs, estimated income from operation of the facility, as well as projected revenues to other Medical Center programs resulting from the facility's population.
The plan was presented at the May 2018 meeting of the Board of Trustees. Sandra Kline and her team introduced the Board to the concept of opening an assisted living facility on St. Francis's campus. The facility would be set up as a for-profit subsidiary of the Medical Center so that it could generate a profit and not be subjected to the strict guidelines of the hospital's accrediting agencies. As a subsidiary organization, however, the Board would still have control.
The chosen facility design would be an apartment-like facility with a sheltered connection to the Hospital for access to the kitchen and hospital services. The facility would have 200 units with 25 to 50 of the units classified as “heavy-assisted”; built to house the physically and medically disabled. The rest of the units would be “light-assisted,” larger apartments. The population would be approximately 220 to 300 residents, serving both single occupants and couples.
The light-assisted apartments could hold residents who required only minor medical and social interventions. The residents of the heavy-assisted section would have more medical needs and would require assistance getting around. The Business Development team recommended this type of programming model, because many assisted living facilities were erected across the country, but few had a medical focus and offered the types of services that St. Francis could offer—physical and occupational therapy programs, and behavior management programs to name a few.
The Board was assured that the facility would meet the strategic initiative of a growing business. The business plan projected an immediate increase in the number of referrals to the outpatient therapy programs. Another projected deliverable of the project was to enable St. Francis to strengthen its focus on reimbursable preventive and wellness programs for the healthier elderly population. The project's longer term goal was to increase the census in the hospital's inpatient units by having a location where people could age in place until they were in need of hospitalization, and then such a facility would be right next door.
Depending on the exact size of the apartments, their equipment, and the actual ratio of heavy-to light-assisted units, Sandra estimated that the entire project would cost between $9,000,000 and $12,000,000 for the facility construction. That estimate included the cost of land, furnishings, and a sheltered connection to the hospital. When up and running, it was estimated that the net income would range between $14,400 and $18,000 per unit per year. The team estimated the net cash flow for the entire project to be around $2,000,000 per year.
Sandra requested the Board to approve the concept and allow her team to proceed with the initiative. The project would include designing/constructing both heavy and light assisted-living apartments. It would include costs of land, construction, furnishings, staffing, and operations (patient services).
The Board conducted several executive sessions, and by the middle of May, after approval, a charter was drafted. The architectural-construction-management firm recommended by the team was approved. The Board appointed two Board members to sit on the planning group.
In June, Dr. Kline gathered her executive team together and presented the project mission, and scope. She reported that the board had approved a small budget to finance the planning process. The Board also stipulated that construction could not begin until after the November 2018 city elections because two of the Board Members were running in that election, one for a city council seat and one as a county commissioner. The Board also stated that they would like a plan that would allow the facility to open by July 2020, as research has shown that many adult children find the summer the easiest time to assist their parents in finding an alternative to independent living arrangements. The CEO and executive team were now confident that they were ready to launch the project to plan, build, and open an assisted living facility at St. Francis.
A few days later, Sandra decided that it was time to set up the team that would take Responsibility for what she called the CALF (Construction – Assisted Living Facility) project. She included the following staff at the launch meeting:
Chief Financial Officer (CFO)
Vice President of Business Development and Marketing
Rehab Services Medical Director
Construction Project Manager for capital facilities projects
Chief Operations Officer (COO) (nursing, facilities, food services, and housekeeping)
Director of Information Services
Director of Support Services (central supply, purchasing, and security)
Two members of the Board of Trustees, one with construction experience and the other a probable electee to the city council.
Even though the department directors from Support Services and Information Services would not be involved until later, Sandra decided to include them from the beginning. Sandra knew some members had a tendency to become obstacles to progress if they felt left out.
Sandra named the group the CALF Project Steering Committee and held the first meeting. Sandra presented her vision for the facility. She told the group that she personally would be managing this project. She led a discussion of all the major steps that must be included in the project plan, and asked each team member to identify the areas for which they would accept responsibility. The hospital's Construction Project Manager took responsibility for the construction of the facility, and the COO volunteered to oversee the building design, as well as define the needs for food services, housekeeping, staffing, and policy and procedure development. The CFO agreed to develop the budgets for each area of the project as well as the operating budget for the facility. The CFO also agreed to create the payroll and accounting systems necessary to operate the facility.
The IS director accepted responsibility to define and set up all the telecommunications and information system needs of the facility. The VP of Business Development agreed to create a preliminary marketing plan, and a communication package for the community and hospital staff. In addition, she discussed organizing a major ground breaking event.
The Medical Director said that he would design an assessment tool for determining residents' level of medical needs upon moving in to the facility. He felt this was the first step in defining what clinical services should be offered to residents. Sandra told the team that she would develop the management structure for the new facility and work with in-house counsel to identify all governmental regulations as well as all industry standards that pertain to an assisted living facility and govern the facility's practices. Sandra gave the team two months to come back with their detailed action plans for their areas of responsibility.
Assume that two months have lapsed. Based on the feedback from executive members, your team will assist Sandra in creating a preliminary WBS. Use the attached template to assist with the process. Be mindful that the template shows four different formats to display the WBS; the outline view, the hierarchical structure, the tabular view and the tree structure view. You only need to select one of those views to complete the assignment. It is recommended that you consider using Project software (i.e. MS Project) to complete the assignment. The expectation is that much of the work contained on the WBS will be decomposed to level 3 (at a minimum).
Choose ONLY "ONE" work package and create an accompanying WBS Dictionary. Remember a WP is the lowest level on a WBS. Use the information provided in the case to define estimates associated with the chosen work package. You may NOT be able to fill in all the information. As with many of the project documents, this document evolves through progressive elaboration as the project progresses. Some of the data will be filled in at later stages. Do your best to fill in all the information you can at this stage in the process.
There is no perfect WBS. Keep your levels correct. Use the information discussed in the case and classify accordingly. Once the main categories are defined, decompose, or breakdown, to lower levels. Your last component, or last breakdown, is always called the work package, regardless of the level in which it is located. This is the box that would be defined in the WBS Dictionary for additional details.
As a group, discuss and provide your rationale (~1 page) associated with the following question: Is Dr. Kline a good choice for the project manager. Why/Why not?