Group 1: Fabio Basile, Andrei Dogaru, Hameed Obileye, Sarah Witlox & Preston Zhang
Managerial Accounting – 13/01/2021
Asante Teaching Hospital
1. How has Perform a strengths, weaknesses, opportunities, and threats (SWOT) analysis.
• One of the best and
renowned hospitals in
South Africa
• Premium level of service
Strength • Enhanced patient privacy Weakness
and comfort (only hospital
to offer single rooms to
patients at additional fees)
• Experienced management
team
• Capture the growing middle
class of Johannesburg
• Lower and simplify pricing
Opportunities Threats
to be more competitive vis-
à-vis competition hospitals
• Growing demand- increase
rate of GDP
2. Calculate the cost per minute for each type of employee.
• Not-for-profit structure:
unable to raise capital from
investors to expand. Leads
to limited resources
(surplus from one
department used to offset
another)
• Complicated, lengthy
billing process (every
supply item on the bill)
leads to unexpected higher
bills and long waiting times
at discharge because bill
need to be checked by
insurers (leads to
unsatisfied customers)
• Competitor hospitals that
offer cheaper services with
less price variations
(bundled pricing)
Group 1: Fabio Basile, Andrei Dogaru, Hameed Obileye, Sarah Witlox & Preston Zhang
Managerial Accounting – 13/01/2021

3. Allocate overhead costs to each level of service using the appropriate cost drivers.
Group 1: Fabio Basile, Andrei Dogaru, Hameed Obileye, Sarah Witlox & Preston Zhang
Managerial Accounting – 13/01/2021

4. Calculate total costs per patient and price per patient at each level of care.

5. If you were Courtney, what pricing recommendation would you make to the CEO?

We would propose to use the single bundled system. It will largely simplify the checkout process
and therefore patients will not have any surprises when they are handed the hospital bill. They
will know that there are three classes based on if any complications arise. The insurance handlers
will also be able to figure out in advance how much of the cost they will pay back for each of the
price levels. Customer satisfaction will rise. It is mainly the level 3 that sees a significant increase
in price, but as the hospital is regarded to provide premium services, people will be inclined to
pay the higher price if a complicated birth delivers a healthy baby with privacy for the parents.