Longevity Healthcare

A detailed Summary of Longevity Healthcare

Longevity Healthcare Systems began in 1972 through a husband and wife's aspiration to find care for their elderly parents. When searching for an institution, Kathryn and Richard were extremely unenthusiastic about being placed on a waiting list to care for their parents. Instead they decided to care for them themselves along with later admitting more and more elderly folks to care for. Eventually the couple leased a 40-bed hospital and transformed it into a long-term health care facility. During the period of approximately the next 15 years, they added new nursing services, expanded by acquiring nursing homes in nearby areas, and also built new health care facilities. At the end of 1988 LHS directed 12 nursing homes, cared for more then 700 beds, and employed more then 1,200 people.

With examining the case the authors present us with numerous possibilities or opportunities that Longevity is presented with to expand their operations or increase their profitability. The health care industry is extremely uncertain and LHS must be sure that the decision they make is the most positive for their future. I intend to present you with my analysis of most the likely, profitable suggesti

ons to sustain growth for Longevity. These are not the only possibilities but just the choice selection I come up with from the information presented to us in the case.

The difficulty of this decision is how to position their marketing strategy. Primarily Alzheimer treatment centers usually have relationships with churches, Alzheimer Associations, support groups, etc. This could be a problem because LHS does not have good relationships with these groups, so they would be forced to revamp their marketing positions to better direct them toward new relationships and how to get positive referrals.

The next opportunity for subacute expansion was presented to the Hamilton's in Toledo. There is an unprofitable 80-bed facility operating at 60 percent capacity with the chance of converting part of this into a subacute care unit, in which the occupancy would probably rise close to 95 percent (if not full). The conversion would cost close to $25,000 a bed but raise revenues for those units from $147/day to ~$250-750/day. At average revenue of $500 a day for subacute units this comes to approx. $30,000 a month. This is substantially lower then the $1000/day average cost of subacute care at a hospital. (Granted there are other factors that are involved with these costs, such as length of stay and type of disability, but I produced numbers for approx. possible outcomes.) These numbers seem to say there is room for exponential growth in profits in this market.

The acquisition of a nursing home either in South Bend or Toledo with a subacute emphasis.

I would like to begin my analysis listing Longevity's three overall marketing objectives; expand the percentage of private payers, increase profits from institutional pharmacies, and promote a higher occupancy rate among homes. I chose these goals as my selectio

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Approximate Word count = 1225
Approximate Pages = 5 (250 words per page double spaced)

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