Case Analysis

Case Analysis

Introduction

In the United States, the Cypher stent was given approval by the Food and Drug Administration (FDA) on April 24, 2003. The stent, which was designed to be used in surgical procedures concerning coronary hear t diseases, was approved after receiving go ahead from European and US researchers. These researchers claimed that when compared with uncoated stents, the Cypher stents considerably decreased the chances of restenosis in patients, which refers to the narrowing down of a coronary artery after the angioplasty procedure, mainly owing to the buildup of scar tissues.

The Cypher stent was marked as a breakthrough in medical technology because it was one of the first drug-eluting stents that was coated with a chemical which inhibited the development of post-surgery scar tissues. However, the Cypher stent had a major drawback to it too. Compared with conventional uncoated stents, Cypher stents increased the costs of angioplasty dramatically so that the average patient preferring them over the former was forced to pay nearly $2800 more than what the regular procedure would cost.

This presents a serious dilemma for healthcare facilities such as Blue Nile Medical Center offering angioplasty surgery to patients covered by Medicare. This is because the amount that Medicare eventually decided to reimburse did not cover the total cost of the procedure that the hospitals were forced to incur. A major reason for this was that Medicare simply assumed that a coated stent procedure usually involved the installation of one or, at the most, two stents whereas it may require more in many cases. As a result, it was obvious that stent procedures that used coated stents would dramatically reduce the profits for hospitals as compared to the use of uncoated stents.

Decision Maker

In a hospital setting, decisions regarding the healthcare procedures have an impact on everyone from the staff and the physicians to the patients. Therefore, the decision makers who will be involved in analyzing the case will consist of all those medical personnel who are a part of the healthcare delivery process. The physicians and hospital staff need to be consulted on the issue so that their input can be thoroughly examined. Since the physicians and other personnel are involved in carrying out the stents procedure, they will be able to provide a more thorough and objective view of the dilemma so that it can be resolved in a more effective manner while taking into consideration the interests of both the hospital as well as the patients. After consulting these personnel, the CEO may decide on the best approach that can resolve this issue.

Problem Statement

The recent downturn in the economy, coupled with an increase in competition from multiple fronts, has put significant pressure on the competitive advantage and financial growth of Blue Nile. The problem has been exacerbated by the stents procedures involving coated Cypher stents since the costs of the procedure that are incurred by the hospital are not completely reimbursed through Medicare, meaning that the hospital is at a loss in continuing their use in stent ...