Why the Hospital Keeps Delivering Babies: Aligning Maternity Resources With Mission, Strategy and the Numbers That Argue Both Ways
[Student Name]
University of Phoenix
NSG/567: Financial Resources Management in Health Care
Week 6 Assignment
[Instructor Name]
[Date]
The hospital, its service line and all figures are a composite written for a model paper.
Over five weeks, this course has examined maternity services at our 250-bed community hospital through its financial statements, operating budget, capital request, variance analysis and a business case for a midwife and laborist model. This paper brings those analyses together to answer the question the board asks every year in some form: why does the hospital keep delivering babies, and how much should it invest in doing so?
The Mission and the Strategy
The hospital's mission is to provide excellent care close to home for the communities it serves. Its strategic plan sets three maternity-related priorities: safety in childbirth above all, essential services kept local and financial sustainability. Resource decisions for the service line must serve all three, and the tension among them is real.
What the Numbers Say
The service line covers its direct costs and contributes about $6.7 million a year toward the hospital's shared costs, as Week 1 showed. After allocated overhead, it shows a loss of about $1.7 million. Its payer mix is heavily Medicaid, which pays less than commercial insurance. Its budget is sensitive to volume, payer mix and agency staffing, and its costs are partly fixed by safety floors. It needs a $486,000 capital investment to keep central fetal surveillance running. And the business case for fewer first cesareans shows a net cost of about $200,000 a year under current payment.
What the Community Needs
The hospital is the only birthing center within 25 miles for much of its service area. When rural communities lose hospital-based obstetric services, research has found that more babies are born outside hospitals or in hospitals without obstetric units, and more are born preterm (Kozhimannil et al., 2018). The hospital's own data show that about a fifth of its patients live in rural ZIP codes, many without reliable transportation.
A Decision Framework
To decide what to fund, change or stop, I use four questions for each resource decision. Does it serve the mission, and how directly? Does it advance a named strategic priority? What is its financial effect, measured on a contribution basis and on a fully allocated basis? And what would happen if we did not do it? A decision that ignores any of the four questions will be either financially reckless or mission-blind, and the board will be right to reject it.
Applying the Framework
Keeping the maternity service. Mission: direct. Strategy: all three priorities. Financial effect: positive contribution of $6.7 million; closing would lose the contribution while most overhead remained. If not done: families would travel 25 miles or more, and the community's birth outcomes could worsen. Decision: keep and strengthen.
The fetal monitoring replacement. Mission: direct, through safety. Strategy: safest place to give birth. Financial effect: $870,000 over seven years, less than the nursing and liability costs of doing nothing. If not done: loss of central surveillance and network security risk. Decision: fund, as the service line's top capital priority.
The midwife and laborist model. Mission: direct, through quality and patient experience. Strategy: safety and local services. Financial effect: net cost of about $200,000 a year under current payment, potentially offset by a quality contract. If not done: first cesarean rates stay above target, and a competing hospital continues to attract families who want midwifery care. Decision: fund a phased start with measures and a twelve-month review.
Agency staffing. Mission: indirect. Strategy: sustainability. Financial effect: $640,000 last year at premium rates. If not done: vacancies. Decision: change, by filling positions and investing in retention, since agency spending is a symptom of a staffing problem rather than a strategy.
Low-value costs. The variance analysis found supply costs per cesarean above peer hospitals. Decision: change, through a supply standardization review with obstetricians, targeting $90,000 a year.
Evidence Behind the Quality Investment
The decision to fund the midwife model rests on evidence as well as values. A collaborative midwifery and laborist model at another hospital was followed by a drop in the primary cesarean rate from 31.7% to 25.0% among the women whose care changed (Rosenstein et al., 2015). Evidence of that kind lets the board see the investment as a test of a proven approach rather than an experiment.
What Would Change the Plan
The plan is not permanent. A sharp fall in births, a large shift in payer mix, a failed quality contract or a new regional arrangement, such as a partnership with a larger hospital, would each prompt a review of the service line's resources. Naming these triggers in advance keeps the plan responsive.
Finding the Money
The plan funds new commitments partly by reducing existing costs. Eliminating agency use saves an estimated $400,000 a year, supply standardization $90,000 and the midwife model's professional billing offsets much of its cost. Together these fund the midwife model and absorb the fetal monitoring maintenance. Finkler et al. (2013) describe this kind of reallocation, funding priorities by reducing lower-value spending, as a core responsibility of nurse leaders in resource management.
Presenting to the Board
The presentation to the board follows the framework: the mission and strategy first, then the numbers on both contribution and allocated bases, then each decision with its reasons, costs and measures. It states plainly that maternity will continue to show a loss after overhead and explains why the hospital should keep it anyway. It commits to measures the board can follow: contribution margin, primary cesarean rate, agency spending, capital project milestones and patient experience.
Nurses as Stewards
Nurses shape much of this plan's success. Staffing to standards while avoiding agency use, reducing supply waste and supporting the midwife model are all nursing responsibilities. Sharing the service line's financial picture with charge nurses and staff, rather than keeping it in the director's office, has made them partners in stewardship.
Accountability
The service line will report to the board twice a year on these measures. If the midwife model does not reduce first cesareans or the quality contract fails, the model will be reconsidered. If volume falls sharply, staffing will be adjusted within safety floors. Mission-driven spending is justified only when it is measured.
A Note on Uncertainty
Every figure in this plan is an estimate. Payment rates change, births rise and fall and contracts are renegotiated. The framework's value is that it can be applied again as the numbers change, which is why the board will see it each year.
Conclusion
Maternity services lose money on a fully allocated basis, more than pay their own direct costs and serve a community with few alternatives. Using a framework that weighs mission, strategy, financial effect and the consequences of not acting, the nurse leader can fund safety and quality investments, reduce low-value costs and present the board with an honest, measurable plan. That is how resources are aligned with mission: not by ignoring the numbers, but by reading all of them.
References
Finkler, S. A., Jones, C. B., & Kovner, C. T. (2013). Financial management for nurse managers and executives (4th ed.). Elsevier Saunders.
Kozhimannil, K. B., Hung, P., Henning-Smith, C., Casey, M. M., & Prasad, S. (2018). Association between loss of hospital-based obstetric services and birth outcomes in rural counties in the United States. JAMA, 319(12), 1239-1247. https://doi.org/10.1001/jama.2018.1830
Rosenstein, M. G., Nijagal, M., Nakagawa, S., Gregorich, S. E., & Kuppermann, M. (2015). The association of expanded access to a collaborative midwifery and laborist model with cesarean delivery rates. Obstetrics & Gynecology, 126(4), 716-723. https://doi.org/10.1097/AOG.0000000000001032
How this NSG 567 Week 6 example is structured
The NSG/567 description ends with using resources to support organizational mission and strategic vision. This paper synthesizes the course's financial analyses into a resource plan for the service line, applies a decision framework that weighs mission, strategy and finances explicitly and closes with how the nurse leader presents the plan to the board. Students search this week as NSG 567 Week 6, NSG567 Wk 6 or NSG/567 Wk 6; all three are the same assignment.
NSG/567 Week 6 questions, answered
What does NSG/567 Week 6 usually ask for?
The course description emphasizes using resources to support mission and strategic vision. Many sections close by asking students to show how budget decisions align with their organization's mission and strategy.
Should a service that loses money on a fully allocated basis be kept?
It depends on its contribution margin, its role in the mission, community need and what would happen if it closed. Many essential services lose money after overhead but contribute to fixed costs and serve the community.
How does a nurse leader argue for mission-driven spending?
By stating the mission benefit clearly, quantifying costs and financial effects honestly, showing alternatives and proposing measures that will show whether the spending achieves its purpose.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official University of Phoenix document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.