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Running head: CASE STUDY- REVIEW REGIONAL MEDICAL CENTER

Case Study- Review Regional Medical Center Jacqueline Bryant Pfeiffer University Strategic Health Services Management MHA 799 Bankole Olatosi, PhD, MPH, MS April 07, 2013

CASE STUDY- REVIEW REGIONAL MEDICAL CENTER Case Study- Review Regional Medical Center Overview

The Holy Name of Jesus Hospital was founded by an order of Catholic nuns in Gadsden, Etowah County in northwestern Alabama. Upon purchase of the hospital by the Hospital Management Associates (HMA) the name was revamped to Riverview Medical Center (RRMC). Hospitals acquired by HMA became a state of art facility and were improved with efficiency to ensure high quality care. Though this hospital was not the dominant health care provider in the area, it was a 281 bed acute care facility accredited by the Joint Commission on Accreditation of Healthcare Organizations. The hospitalists of the RRMC operated private practices throughout the city. This organization shared common medical staff with one of their competitors, Gadsden Regional Medical Center. Common medical staff not shared was those from the Emergency and Radiology Department. RRMC faced challenges in lacking clinical services offered in the areas of neurosurgery, psychiatry, obstetrics, rehabilitation and surgical outpatients that were provided by area healthcare centers/organizations competitors. Stakeholders The stakeholder analyses of RRMC suggest that the stakeholders exist within the internal and external environment. Stakeholders of the internal environment are the HMA, medical staff healthcare providers, nursing, and other clinical departments) Physicians leadership Group and other ancillary services. The external stakeholders are the community, patients, MedKey System members, CMS, HMOs (ie. Blue Cross Blue Shield and Tri-Care) and any other private insurances. As RRMC renovated, expanded and restructured operations, its target market expanded with acute care for patients. The renovation of the Emergency Department (ED) supported a 24 hour full service that included state of the art CT and ultrasound imaging.

CASE STUDY- REVIEW REGIONAL MEDICAL CENTER Therefore, prospective ED patients are included in the target market. The future Diagnostic Center will have quick patient turnaround offering MRI, PET and CAT scan services. Cardiac patients are also within the target market as a Chest Pain Center was located near the ED department. The Heart Vascular Center totally supported services required for cardiac patients. Uniquely enough, RRMC also operated a Heartburn Treatment Center. It was researched the American Gastroenterological Association that heartburn affects more than 60 million people. (Swayne, Duncan, & Ginter, 2012) RRMC focused on a marketing strategy with the MedKey system. This system promoted use of RRMC clinical services through the patient database. Discounts, extra services and rewards were offered to MedKey members. MedKey membership targeted recruitment of

individual or employer group membership. This system did not offer online patient care services such as appointments or telemedicine. Unfortunately, this system was not extended national, state or local wide for prospective patients of RRMC for recruitment of clinical services. Their marketing strategy also did not extend attention to women. Though the Womens Pavillion OB/GYN services were discontinued, women are also share high health disparities in cardiac clinical areas. The aim of this approach may help recover a mass of female patients lost with the closing of the Womens Pavillion. SWOT/TOWS Analysis SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) shows internal strengths and weaknesses along with external issues of organizations. TOWS analysis matches internal strengths and weaknesses against the external environmental opportunities and threats. RRMC showed strengths as their Emergency and Cardiac Care departments. These departments have been revamped and equipped to provide state of the art care to patients. Marketing information

CASE STUDY- REVIEW REGIONAL MEDICAL CENTER of such competitive and state of the art departments should be intensely distributed throughout the area and beyond. RRMC was rated number 1 for cardiovascular surgery in Alabama and

recognized for orthopedics and stroke programs by HealthGrades.com An agreement to re- route cardiac patients from neighboring Stringfellow Memorial Hospital, a HMA owned heath care facility, to RRMC should be put in place. Weakness within RRMC is a poor work culture between management and medical staff. The Physician Leadership Group will attempt to bridge communications/relationship with ongoing organizational changes. There is also billing problems for reimbursement which is causing a substantial loss of money. The billing/reimbursement issue led to the closing of the Womens Pavillion. Billing issues for reimbursement were problems with all health care administrators in Alabama. Opportunities to improve the ED patient satisfaction scores maybe supported with the use of Nurse First program in which the first person an ED patient sees is the nurse, not a registration person. A threat for RRMC is the loss of clinical services for OB/GYN. RRMC high birth rate supported a credible reputation to potentially gain significant revenues. The addition of the Heartburn Treatment Center is a questionable investment as the complaint of heartburn from area patients was not on the list their ED top ten chief complaints. The outpatient Diagnostic Center can capture patients diagnosis that will potentially need specialty care. The advertisement of incentives with MedKey memberships should be extended beyond the patient database. There were threats of Gadsden residents (estimated 25%) traveling outside the local area for non-acute specialty care areas such as cancer, diabetes, rheumatology, kidney, optometry and dentistry. Financial Analysis HMA income statement and balance sheet showed various trends with their acquired hospitals. Net patient revenue in 2001 was $1,879,801 and continuously increased to $3,205,885

CASE STUDY- REVIEW REGIONAL MEDICAL CENTER in 2004. HMA income statement and balance sheet showed various trends with their acquired hospitals. Total cost and expenses also increased from $1,558,850 in 2001 to $2,673,689.

Though total assets in 2003 were $1,093,336, there was a decrease to $941,594 in 2004. Ledgers for funds held by trustees and excess cost over acquired net assets showed a significant increase from 2003 to 2004. Retained earnings for liabilities and total stockholder equity also continuously increased each year from 2002 to 2004. Overall, HMA showed a consistent growth with operations from year to year. Strategic Recommendations Strategies that should be pursued by RRMC: Continue to reduce health care cost to help balance disproportionate reimbursement from Medicare/Medicaid. Continue to improve patient satisfaction scores as they determine percentage of reimbursement from CMS. It is apparent that RRMC was a reputable birthing center with their previous high birth rates trends. Additional consultation and analysis should be done to possibly reopen this service which may include use of vertical integration. Improve work culture to improve organizations operations/work environment. Marketing/advertising of number 1 rating of cardiovascular surgery and recognition of orthopedic and stroke programs. ED services offered should also be included. A high momentum of energy promoting these state of the art services will help mend and counter the problem image of RRMC. Outpatient Diagnostic Center is a great service for Gadsden residents and has potential to earn significant revenues.

CASE STUDY- REVIEW REGIONAL MEDICAL CENTER The CEO of RRMC can improve relationship with the medical staff by allowing them to

become more engaged with changes in the organization. Transparency of leadership also helps improve relationship with administrators and staff. The Physician Leadership Group was a great start in building their relationships. The physicians should also be given the option to set up offices within the facility. Conclusion RRMC has definitely been affected by healthcare cost in providing quality health care services. The HMA acquisitions of this hospital have helped increase and improve operations and some chief clinical services. The build of specific clinical services was extremely important with the loss of the Womens Pavillion Services. Adaptive strategies such as these will support long term competitive advantages. Health care organizations must be able to reduce cost, grow and while sustaining a competitive advantage to attract their target market. Strategic measures mentioned should be addressed internally and externally to support the success of the organization.

CASE STUDY- REVIEW REGIONAL MEDICAL CENTER References Swayne, L. E., Duncan, W. J., & Ginter, P. M. (2012). Strategic management of health care organizations (6th ed.). San Francisco, CA: Jossey-Bass.

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