Dubai Medical Center, an urban, nonprofit, 450-bed rehabilitation hospital began to see a significant decline in admissions. The Dubai Medical Center’s mission focuses on inpatient and outpatient rehabilitation of the severely injured and catastrophically ill. While the patient census varied from month to month, it appeared to the Dubai Medical Center Board of Trustees that the inpatient population was slowly but steadily declining.

Dubai Medical Center, an urban, nonprofit, 450-bed rehabilitation hospital
began to see a significant decline in admissions. The Dubai Medical Center’s mission
focuses on inpatient and outpatient rehabilitation of the severely injured and
catastrophically ill. While the patient census varied from month to month, it appeared
to the Dubai Medical Center Board of Trustees that the inpatient population was slowly
but steadily declining.

The hospital’s market researchers reported that fewer people
were being severely injured due to the popularity of seat belts and bicycle/motorcycle
helmets. In order to get a handle on the future of the organization, the Board, and the
CEO, Ali Salma M.D. called for a major strategic planning effort to take place. In
January 1999, the Dubai Medical Center held a planning retreat to identify future
opportunities. The outcome of the retreat was that the Medical Center needed to focus
its efforts around two major strategic initiatives. The first, a short- run initiative, was to be
more cost-effective in the delivery of inpatient care. The second, a long-run strategy,
was to develop new programs and services that would capitalize on the existing, highly
competent rehabilitation therapy staff and the Dubai Medical Center’s excellent
reputation in the Gulf Cooperation region.
At the time of the retreat, Ali Salma’s parents were living with him and his family.
Ali was an active member of the “sandwich generation.” His parents were aging and
developing many problems common to the geriatric populace. Their increased
medical needs were beginning to wear on Ali and his family. It crossed Ali’s mind that
life might be more pleasant if the hospital Board approved an expansion of the
Medical Center’s campus to include an assisted living facility.
In March 1999, Ali had his Business Development team prepare a rough estimate
of the potential return on investment of an assisted living facility. He asked the team to
identify different options for facility construction and the associated costs. The team
also did a complete competitive analysis and examined the options for services to be
offered based on Dubai Medical Center’s potential population base and catchment
area. The Business Development team visited several facilities across UAE. The team also
interviewed companies that could oversee the design, building, and operation of the
facility for Dubai Medical Center. The development team produced a preliminary
business plan based on the recommended structure for the facility, estimated capital
expenditure needs, estimated income from operation of the facility, as well as
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