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hospital is that it does not any longer believe in the promises that it made when the founders set up the hospital. The second problem is due to the large differences that exist among the members of the Board and as a result the CEO is not finding it possible to control these differences. The third problem can be viewed as an extension of the same lack of control by the CEO over the lower levels employees of the organization. In normal circumstances these employees are expected to report to the CEO, but here the employees could be seen acting according to their interests. In continuation of this is the lack of setting up rules under which these employees should be operating.
This is also the responsibility of the CEO, but it is clear that this has not been done. This leads back to the third problem that if these rules had been fixed, then it would have been much easier to control the lack of discipline among the hospital staff. This is also affecting the hospital both in terms of finance as well as physical operations of the hospital. This continues on to the fifth problem and this relates to not being able to understand the financial implications of running the hospital. The implications of medical insurance and the costs of running the hospital is leading to a situation whereby the management loose all control of running the hospital. These five situations can be clearly summed up in a single statement and that is the lack management skills for running the hospital successfully.
The appropriate solutions
The first of the problems of not living up to the promises made by the founders as mentioned on the backs of visiting cards can be resolved by living as per those promises. The promise is stated as "With the foundation and commitment of our spiritual heritage and values, our mission is to promote the health and well-being of the people in the communities we serve through a comprehensive continuum of services provided in collaboration with the partners who share the same vision and values." (Case Study provided by client) The mission of the hospital here is clearly one of providing service to the community for the 'well being of the people' without caring for the costs incurred. The help is also to be given 'in collaboration with partners who have the same vision and values'.
If this is the aim of the hospital then all individuals who work with the hospital or for the hospital have to follow the same principles and anybody with a different thinking should quit. It is also the job of the CEO to decide what these objectives translate into, or how they can be carried forward. This may lead to a stage where some of the other persons may be in disagreement with him so far as the interpretation of these ideals are, but as the CEO, it is his job to follow up on these ideals and for this he has to depend on his own understanding. When conflicts arise, he has to either compel the other person who has a different understanding to quit, or quit himself. This is the method for solving the differences among the board of directors, or the staff, for dealing with the difficulties in physical operation, and finally for a successful management of the hospital.
Rationale for the proposed solutions
The problems for the hospital are a lack of direction or flow. That is happening as no individual in the organization knows where to go. To rectify this, one main area is for the leader to decide where he wants to go. This is provided by the stated mission of the hospital. This has already been discussed. At the same time, all the lack of direction has been reflected in certain physical problems, and the reflection is mainly in the areas of finance for the hospital. This has also been discussed in detail in the case. In order to run the hospital effectively, it is important that the financial problems of the hospital are solved, as without this, the total and apparent problems of the hospital will not be solved. (Kowalczyk, 2000)
To understand the financial difficulties in running a hospital, let us understand that there is no hospital without financial difficulties in USA at the present point. For the purpose of supporting our decision on this matter, let us look at the study by the Lewin Group of Massachusetts. One of the biggest problems that they had was to convince the financing authorities that they were not wasting the money that was being given to them by the taxpayers. This is one of the main reasons why hospitals find it difficult to get money even when they require the funds for their operations. This is the principal reason why the Lewin Group conducted the study and one of the interesting points that they found out was that the costs of running a hospital in Massachusetts was 4.3 higher than running a hospital at any other place.
The higher costs were not only for that hospital, but also for other hospitals like community hospitals, inpatient stays and outpatient visits. The entire objective of this study was to remove the blame that was being given to this hospital for high costs. Most of the hospitals were going through losses for 13 straight quarters and this sort of a high loss was felt by some to be not sustainable. The problems of the hospital were further accentuated by the plans of the governor. The requirement of the hospitals was only for $100 million and this would have been easy for the legislators to provide as the state was expected to have a surplus in the budget of a figure between $500 million to $700 million. Yet the legislators had a different objective due to the approaching elections and they wanted to give a tax cut so that they could get re-elected. (Kowalczyk, 2000)
A similar situation also existed in Pennsylvania wherein the state was being affected by increasing costs and this lead to a situation which affected the provision of health care to its citizens. The financial difficulties make it problematic for the patients to understand as to what is going to happen in the emergency rooms of the hospitals when there is such a financial crisis. Yet in such cases, the doctors of Pennsylvania were capable of dealing with financial difficulties. Their attitude sounds like "our mission is to promote the health and well-being of the people in the communities we serve." (Baldwin, 2001) The reason for this confidence is that insurance companies and others concerned with the financial needs of the people requiring medical care will end up paying for visits to the hospital on emergency basis even though the signs that are being exhibited by the patient do not seem to be of an alarming nature. However these visits quite often end up preventing several diseases of the people like heart problems when provided with treatment in the initial stages. (Baldwin, 2001)
The financial difficulties that the hospital is facing are not unique and it can be seen that financial problems exist even in several international situations. One such similar example could be found in Victoria where many hospitals are facing deficit problems. The attempts at controlling the costs of hospitals has resulted in increasing the waiting period for a bed to 12 hours and this trend has been increasing for a period from June 2003 to March, 2005. This may seem to be a high figure, yet is not so as this figure of 12 hours is less than compared to the situation in the last quarter. Thus one can conclude that the situation is improving. In another hospital, namely the Alfred Hospital the projected financial deficits are high as $10 million. Other similar hospitals like Southern Health had a projected deficit of a figure between $10 million to $14 million and Goulburn Health had a projection of $2.4 million. (Dubecki, 2003)
Thus the financial problems that the CEO is worried about are really not totally unexpected and so serious. In any case, it has been made clear by the founders through their statement "we serve through a comprehensive continuum of services." (Lesser; Gaylin; Andersen; Brown, 1999) It is quite possible that the CEO is a doctor and does not understand much about finance, and that is the reason why he may be so worried. In that case, he can let him get another expert who can arrange the required funds and this can be organized from outside organizations that have funds. The aim of the hospital is to serve people and not to make profits. This is the confusion that many CEOs have about their task. The task here is to provide service and it is not his job to worry about costs. It is quite clear that he is not able to solve the…[continue]
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