Case Study St.

Augustines Hospital: Physical and Financial Restructuring

For the first time all day Dr. Mark Groveton was able to sit down and take a breath. As he slouched into his freshly unpacked office chair he looked around at the barren office walls and the dozens of file boxes and containers that surrounded him. Just two weeks before Dr. Groveton had been interviewed by the !oard of Directors of "t. Au#ustine $ospital for the position of $ospital %&'. Dr. Groveton sat in his chair rememberin# how excited he was (ust to be considered for such a presti#ious position at the renowned !arrie $ospital. For ) years Dr. Groveton had been a Mana#ement &* Doctor at Grace $ospital in the nei#hborin# town of "imcoe but every +ednesday and ,hursday ni#ht for the past - years he had driven to ,oronto for ni#ht classes at the .niversity of *otham/s "chool of Mana#ement. ,he excruciatin#ly lon# and laborious - years finally ended on Au#ust - th 0121 when Dr. Groveton was awarded his Masters of !usiness Administration. Dr. Groveton had pursued his M!A with aspirations of movin# into healthcare upper mana#ement so when he discovered that

the %&' of "t. Au#ustine/s $ospital was terminated he contemplated the idea of applyin# for the position. Dr. Groveton stron#ly 3uestioned whether he was a viable candidate for the (ob4 however he decided to forward his %urriculum 5itae and "tatement of 6nterest to the hospital. Dr. Groveton was shocked when he was asked to come for an interview and he was even more dumbfounded when the selection committee said that he was exactly the type of leader they were seekin#. 6n a two week whirlwind Dr. Groveton accepted the position of %&' at "t. Au#ustine and tied up all of his remainin# obli#ations at Grace $ospital.

St. Augustines Hospital had suffered 8 straight years of budgetary overages and they had amassed a cumulative deficit of 125 million dollars.
7rior to Dr. Groveton acceptin# the role of %hief &xecutive 'fficer "t. Au#ustine/s

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$ospital had suffered 8 strai#ht years of bud#etary overa#es and they had amassed a cumulative deficit of 20- million dollars. ,he 'ntario provincial le#islature has historically swayed like a pendulum re#ardin# its fundin# of provincial healthcare however there appears to be a recent consensus amon#st the political parties that healthcare cutbacks are necessary in order to balance the provincial bud#et. ,he external financial pressures bein# applied by the le#islature the hospitals existin# financial deficit and a pro#ressively a#in# 'ntario population spurred the hospital/s board of directors to seek a new leader for the or#anization4 a leader who could move the hospital and its 0811 employees into a future of economic sustainability.

The combating parties ere various department heads and union officials from across the hospital.
'n his first day at "t. Au#ustine $ospital Dr. Groveton entered the !uildin# at 9 o/clock. As he entered the corridor that lead to his office he was met with a lineup of people #athered outside his door as well as the near deafenin# echo of yellin# and banter in the air. As he approached the crowd he realized that the combatin# parties were various department heads and union officials from across the hospital. Mildly overwhelmed Dr. Groveton a#reed to individually meet with each person and discuss any concerns or issues they mi#ht have. ,he first person in line was a short plump no:nonsense woman named ;ancy 7into. ;ancy was the chair of the local nurses union4 she was an elderly stron# willed and authoritative woman who was extremely vocal when it came to announcin# her

distaste for any le#islation that threatened her members. ;ancy entered Dr. Groveton/s office and without so much as an introduction she said <the nursin# union will not tolerate a wa#e freeze the union will not tolerate a cutback of worker hours and the union will most certainly not tolerate any of our fundin# bein# #iven to other departments within this hospital.= Dr. Groveton was taken off #uard by this abrupt approach and calmly asked Mrs. 7into to sit down and explain why she thou#ht that any of those thin#s were on his a#enda. Mrs. 7into replied <all new leadership is the same they come in and attempt to chan#e the entire system they take the surplus money from stable departments and #ive it to the inefficient departments who are hemorrha#in# funds and then when they realize that their bud#et isn/t #oin# to add up its always the nurses who suffer. ;urses are the first to be laid off or have their hour/s cutback because some administrator with no understandin# of front line healthcare deemed that nurses were unimportant.= 6n a complete state of shock it took Dr. Groveton a moment to #ather himself before he responded. Dr. Groveton could not understand how this woman harbored so much hostility towards him when he had not even implemented a sin#le chan#e. Dr. Groveton spoke calmly but assertively explainin# his position. <Despite any rumors you may have heard Mrs. 7into 6 have currently made no decisions re#ardin# the future direction of this hospital and 6 assure you that 6 will only make decisions that are in the best interest of this hospital.= Mrs. 7into proceeded to roll her eyes and uttered <6 sure hope so.= ;urse 7into looked strai#ht at Dr. Groveton and said <the nurses contract for "t. Au#ustine/s is set to expire at the end of the month. Just make sure that

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you consider the points 6 (ust expressed or else this will be an incredibly difficult ne#otiation for the hospital.=

The volume of the ! individuals progressively escalated as they attempted to tal" over one another.
As Mrs. 7into exited the office three people rushed in throu#h the door and all three of them be#an talkin# at once. ,he > individuals were? Dr. "andra +on# %hief of Dia#nostic 6ma#in# Dr. Martin @ockwood %hief of "ur#ery and Dr. %hris '/;eal %hief of 'ncolo#y. ,he volume of the > individuals pro#ressively escalated as they attempted to talk over one another so Dr. Groveton stood up and said <&nou#hA 6 will meet with each of you individually and we can discuss all of your concerns.= +ith !itterness plastered across their faces Dr. +on# and Dr. '/;eal left the room. Dr. Groveton could feel a piercin# headache startin# but he had no time to collect himself because Dr. @ockwood immediately be#an to explain how the "ur#ical Department was the fla#ship department of "t. Au#ustine/s. Dr. @ockwood declared that in order to maintain the credibility and presti#e of his department it would be necessary to improve the 3uality of work and efficiency of his supportin# departments specifically Dia#nostic 6ma#in# and 'ncolo#y. Dr. @ockwood continued by sayin# that other departments in the hospital were constantly hinderin# his staff by ineffectively communicatin# the dia#nostic workups for his sur#ical patients. Dr. @ockwood su##ested that the Department of Dia#nostic 6ma#in# was drownin# with inefficiency and that the staff in the 'ncolo#y Department were (ust immensely incompetent. ,he departments of 'ncolo#y

Dia#nostic 6ma#in# and "ur#ery are > departments that are constantly re3uired to interact so Dr. Groveton was shocked by how anta#onistic the relationships appeared to be between these departments. Dr. Groveton assured %hief @ockwood that he would consider his re3uests before makin# any decisions re#ardin# chan#e plans. After Dr. @ockwood left the office there was finally a moment of silence where Dr. Groveton leaned back in his office chair and be#an calmly breathin# in an effort to relieve his #rowin# anxiety. A few moments later there was a soft knock at the door4 it was Dr. "andra +on# %hief of Dia#nostic 6ma#in#. "he politely asked Dr. Groveton if he had time to meet with her. Dr. Groveton nodded his head and directed Dr. +on# to the chair that sat in front of his desk. As Dr. +on# sat down she said <"ir 6 would like to apolo#ize for stormin# into your office earlier that was incredibly unprofessional of me.B Dr. +on# continued by sayin# <in the past #ainin# the attention and respect of upper mana#ement necessitated bein# extremely vocal and a##ressive.=

#nder the past administration$ departmental progress reports and %uarterly performance evaluations ere used by administration to determine ho received funding.
Dr. Groveton smiled and said <in my experience you catch more flies with honey than vine#ar.= ,he conversation continued and Dr. +on# revealed how under the past administration departmental pro#ress reports and 3uarterly performance evaluations were used by administration to determine who received fundin#4 this fundin# allocation structure caused very competitive

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and ultimately combative relationships between certain hospital departments. Dr. +on# explained that the competition between departments has immensely disrupted interdepartmental communication.

&eyond the structural issues and interdepartmental conflict$ there are immense problems ith the information technology utili'ed.
Dr. Groveton/s anxiety was continuin# to compound as he realized that implementin# chan#e at "t. Au#ustine/s was #oin# to be incredibly difficult. After an awkward pause Dr. +on# said <well enou#h of my sob story ultimately 6 did come here today with a specific a#enda.= !eyond the structural issues and interdepartmental conflict there are immense problems with the information technolo#y utilized within the department of dia#nostic ima#in#. Dr. +on# explained that the outdated communication interface between departments hinders her department/s ability to service the other departments by providin# their dia#nostic ima#in# within an efficient time frame. %hief +on# told Dr. Groveton that she was incredibly open to restructurin# her department because she realizes that there are inefficiencies that need to be improved. Dr. +on# emphasized that she would actively support whatever chan#es the administration deemed necessary movin# forward. Dr. Groveton stood up and shook %hief +on#/s hand and thanked the %hief for her support. After %hief +on# had excited the office Dr. %hris '/;eal the new %hief of 'ncolo#y walked into the office. Dr. Groveton was in shock because %hief '/;eal did not look a day over 0- he was a small baby:faced man

with a bi# smile plastered across his face. ,hree months a#o Dr. '/;eal was appointed as the new head of the 'ncolo#y Department due to the previous chief/s retirement. %hief '/;eal approached Dr. Groveton and spastically shook his hand. As both men sat down Dr. '/;eal be#an speakin# like an auctioneer. %hief '/;eal rhymed off a series of strate#ies that he had developed to improve the efficiency and financial performance of his department. Dr. '/;eal mentioned ideas like interdepartmental resource sharin# rovin# nurses and dia#nostic al#orithms to improve the efficiency of patient throu#hput4 all of which were desi#ned to reduce costs. Dr. Groveton was thorou#hly impressed by the youn# man/s ideas and he asked <how is the implementation of these initiatives #oin#C= %hief '/;eal sheepishly looked at the floor and said <they are not #oin# very well sir4 6 have had a lot of trouble with staff buyin# in to the chan#e process.= Dr. '/;eal explained that the avera#e a#e of his staff was D8 years old and that his staff were hi#hly 3ualified and #ood at their (obs but they were somewhat complacent and unwillin# to adopt any chan#es that were different from the historical practices. Dr. '/;eal was aware that his youn# a#e made many of the staff: members 3uestion his leadership ability and experience but he was adamant that he was 3ualified to be %hief. Dr. '/;eal also explained that he had #one to some of the other hospital %hiefs and asked for advice on how to improve interdepartmental communication. $e was explicitly told to worry about his own department and it was su##ested that implementin# real chan#e within the system was impossible. Dr. Groveton could see a look of despair on the face of his youn# %hief. Dr. Groveton said <6 believe you have brou#ht me some excellent improvement

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strate#ies and 6 really appreciate the effort and thou#ht that you have put into makin# this hospital more efficient.= Dr. Groveton continued by sayin# <when the administration does formalize a lon# term chan#e strate#y we will make sure that you have all of the support necessary for chan#es to stick within your department.= ,he smile had returned to %hief '/;eal/s face he thanked Dr. Groveton and left the 'ffice.

(n order to move the hospital to ards financial sustainability ould re%uire implementing effective change ithin a limited time frame.
Dr. Groveton slouched into his chair lost within deep thou#ht. All of his meetin#s this mornin# had drawn his attention to some #larin# issues facin# the hospital movin# forward. Dr. Groveton realized that in order to move the hospital towards financial sustainability would re3uire implementin# effective chan#e within a limited time frame. Dr. Groveton immediately called for a meetin# of his senior executive for early the next mornin#. As Dr. Groveton left the hospital a smile came across his face. Dr. Groveton loved a #ood challen#e and "t. Au#ustine/s was certainly #oin# to confront him with the difficult issues he desired to take on. Dr. Groveton realized that healthcare is a tumultuous field which is continuously chan#in# but the prospect of tacklin# the hospitals financial and structural issues truly excited him. As he stood at the head of the table in the hospital boardroom Dr. Groveton explained the %haos of his first day and he announced <ladies and #entlemen in order to ri#ht this ship and prevent this hospital from drownin# we have some serious work

to do.= Dr Groveton explained to the executive that <there is no doubt that the current financial deficit can be viewed as a problem however this issue can also be utilized to incite and motivate people to adopt necessary chan#e.= Dr. Groveton added that <6n a dynamic and continuously chan#in# field like healthcare it is impossible to be certain that whatever chan#es we decide to implement will be successful. $owever 6 believe that our team has the skills and know:how to move this hospital into an era of economic stability.= %&' Groveton finished his address to the executive by sayin# <we have immense opportunities for restructurin# #rowth and improved efficiency so the ball is in our court. ,his is our time to make thin#s happenA=

Ho could he transform the clinical care so that it ould be patient)centred and standardi'ed to evidence)based best practice medicine$ ith a focus on efficiency and financial responsibility*
After dismissin# the executives from their meetin# Dr. Groveton sat in his office brainstormin# ideas to transform the $ospital. +onderin# how it would be able to meet the board of directors/ ultimate #oal of providin# a hi#h 3uality service to patients but still meet the financial restraints of the bud#etary cutbacks. $ow could he transform the clinical care so that it would be patient: centred and standardized to evidence:based best practice medicine with a focus on efficiency and financial responsibilityC Moreover how could he simultaneously overcome the interdepartmental conflicts and resistance to chan#e that he had been made painfully aware of this mornin#C $e stood up and searched throu#h one his unpacked

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boxes of books on the floor of his office and found a favourite worn book. 6t was a treasure of knowled#e and Dr. Groveton/s favourite textbook. 6t was an 'r#anizational !ehaviour text written by an absolute #enius and his favourite M!A professor Dr. !arry +ri#ht. Dr. Groveton turned to this hi#hly re#arded resource for insi#ht and useful

tools for addressin# the hospitals present situation. $ow should Dr. Groveton and his staff implement chan#e at "t. Au#ustine/s $ospital in order to address resistance to chan#e interdepartmental conflicts and bud#etary constraintsC

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