Quandary at National Health Company

Abstract

National Health Company (NHC) became one of the nation’s leading providers of healthcare during the early 2000s, through aggressive mergers and acquisitions. The company provides both in and out patient care such as convalescent care, rehabilitation, physical therapy, outpatient surgical centers, ultrasounds, mammograms, MRI’s, CT scans, and other medical services. The company’s rapid expansion initially resulted in a substantial amount of profit and success in the healthcare market. However it became increasingly difficult to maintain the growth and expansion in light of the economic climate, continued pressure from Medicare, the insurance companies to cut costs, competition from other health field carriers and the concern over potential government funded health care programs. As the NHC’s management failed to sustain the expected growth, its management resorted to other strategies that not only maintained the expectation of its shareholders, but would also allow management to keep their extravagant life style. In this case, we will follow the struggles and anguish faced by Karen Larson, NHC’s Chief Financial Officer, as she battles her way through making the right financial and corporate governance decisions and not to allow herself to be allured, by fancy titles, avarice and greed as well as upper management pressure placed before her. We will present not only the decisions she has to make but also the outcome of her decisions.