Critical Thinking Case Study: Let

Critical Thinking Case Study: Let it Pour - My First Assignment as Executive Assistant The problems of the organization can be summarized in a few statements. The first of these is that the organization does not seem to believe any longer in the promises that it was set up with. The second problem is the differences in the opinions of different people in the Board of the organization and the inability of the CEO to control these differences.

The third is a continuation of that problem where the CEO is not able to even manage the differences in opinion among the staff in the hospital. The fourth is the laxity of not fixing the rules under which staff have to operate. This is both in terms of medical operations as also in terms of financial effects.

The fifth is a total lack of understanding implications of financial matters both in terms of medical insurance as also in terms of costs of running the hospital and how they can be controlled. This is clear from the position of the hospital that it lacks management skills. The first problem of the organization is clearly the position it is in where the employees themselves do not seem to believe in the motto of the organization.

This motto is clearly mentioned for everybody and even printed at the back of visiting cards 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." (Let It Pour: My First Assignment as Executive Assistant) This is certainly a problem where the motto of the organization is out of date or not a part of the beliefs of the employees of the organization.

This is stated by the Chief Executive Officer himself. This indicates that there is a clear gap in the thinking of Chief Executive of the organization and its employees. This should not exist and the next question is why this situation is being permitted to continue. The thinking of the CEO is clear from his statement saying "I report directly to the Board of Directors of the Faith Foundation. Its diversity alone represents a kaleidoscope of thinking and decision-making.

The grand point of commonality among the Board members is their support of the purpose, values, and survival of Faith Hospital." (Let It Pour: My First Assignment as Executive Assistant) The problem is thus not only in the hospital but goes even further and it goes to the Board. The Board embers do not have identical opinions about the method of running the hospital and this means that the differences of opinion will percolate down.

At the same time, they all want the hospital to continue operating, but this is difficult if they do not have unanimity in thinking or decision making. The result of such a situation will be a lot of diverse opinions among the people lower down. It is possible that some of them are even appointed through the influence of one member of the Board, and not directly. The CEO is probably aware of it but would not like to talk about it.

Even according to the CEO the differences are serious and go down to the level of their thinking and this is probably due to their differences in thinking. The CEO himself feels that "I'm not sure how many of our stakeholders realize or understand the differences between ethics, laws, beliefs, oaths, etc." (Let It Pour: My First Assignment as Executive Assistant) These may not seem to make much of a difference in operational matters, but are being taken down to operational levels by the staff.

This is seen in the differences that exist among the staff even in terms of treating patients.

According to the CEO "We have a case in our Neo-Natal Ward, where Child Protective Services is in the process of taking custody of the baby and threatening to file charges against us because of the way we provided services or, as they allege, failed to provide services." (Let It Pour: My First Assignment as Executive Assistant) No hospital can be run against the laws of the country and there will not be any problems as long as it is run in strict conformity with law.

At the same time, the hospital staff or the management cannot bring in their personal beliefs into the picture and decide to provide treatment as and when they like, or as in this case according to the wishes of the parents. This problem of discontinuous functioning is going down to the level of the employees and they move according to their own likes and dislikes.

This is reflected in his statement saying "Nonetheless, we have wonderful people who care very much about the well-being of their patients; so much so, in fact, that one of our hospital pharmacists is filling uninsured prescriptions by accepting payment in installments." Two of our counselors are treating some of their clients pro bono -- unauthorized! At the other end of the spectrum, some staff members care so much about Faith's survival that they refuse to serve patients unless they confirm insurance coverage first." (Let It Pour: My First Assignment as Executive Assistant) This is having a result on the financial position of the hospital and that is but natural.

The important question to judge here is why are there no policies in the hospital which everyone has to follow? There may be various reasons -- interference from the Board about action being taken against some of their favorite staff members, inability of the CEO to enforce his decisions, or the concentration of the hospital on treatment of patients and not on deciding on the management that it wants to offer.

From the fact that the person discussing the entire issue had been sent for a course on management by the authorities of the hospital, it is likely that the hospital does not have enough of skills in management. There is also a clear reflection in his statements which indicate that he does not understand much about medical insurance, or about tackling the problem of decreasing hospital occupancy. This is clear from the statement "Here is some data that you might find interesting, Chris.

If we hold steady at 7,863 patients and 39,866 patient days, we will be forced to reduce our fixed costs by 15% just to break even." (Let It Pour: My First Assignment as Executive Assistant) It is clear that the person talking about costs does not even know what are fixed costs and what variable costs are. He does not know the implications of insurance that is to be collected or how he should ensure that all insurance is collected. In short there is total financial indiscipline.

Regarding financial problems that the hospital is facing, only one solution can be suggested and that is to get hold of a person who understands finance to manage finance. (Let It Pour: My First Assignment as Executive Assistant) The financial problems of hospitals are not unique to this hospital. Looking internationally, it is seen that the hospital system of Victoria is going through enormous pressure, and this is getting reflected into many hospitals getting into deficit.

The number of persons waiting for a bed for more than 12 hours increased from 1845 in the March quarter there increased to 2003 by June quarter, and yet this was lower by 27% when compared to the previous quarter. Thus at least statistically, service is improving. At the same time, Alfred Hospital was into a projected deficit of $10 million. Another hospital, Southern Health had a deficit of between $10 million to $14 million, and Goulburn Health faced a shortage of $2.4 million.

(Dubecki, 2003) The situation in New York is no different and the hospitals there are also having poor operating performance and financial condition. The financial condition of hospitals there is done periodically by Hospital Association of New York which gets the required data from its database. There are similar institutions in other states but the data that is given by HANSYS would get a person to believe that hospitals in New York can go through the worst types of financial conditions that are possible.

The study identified 28 hospitals that went through from 1979 to 1988 that had not filed for bankruptcy though they all had negative fund balances. During the entire period of ten years, as many as six hospitals of these ten continued having negative fund balances. The negative fund balance of three of these hospitals had reached a level of more than $20 million at some point during these years. Another problem that the hospitals would have was due to the state regulation of annual funding of depreciation assets.

This is not being strictly enforced in many cases. This would make a difference between continuing as a going concern or not for any hospitals. (Donoghue, 1990) The other problem is regarding third party reimbursements and state regulators which have had a significant effect on hospitals during the last ten years. Another factor that is brought out by the study is that during both 1983 and 1986 there were important variations in the inpatient reimbursement system that helped in improving the operating and final margins of hospitals.

At the same time there are the health insurance companies who provide a large portion of the funds to hospitals are continually on the look out for reducing payment amounts. There are methods through which this is done and one of that is changing from inpatient settings to ambulatory surgery. Another set of problems come from settlements with labor unions. As an example a major portion of the health care providers were affected due to the settlement with Local 1199.

This settlement also created similar effects in other areas of the state. The result of these settlements was to resume pension contributions and bonuses within a 12-month period of the ending of the contract. The problem here is wages have to be increased for occupations where the positions are scarce in the market. There is a continuous shortage of nurses, therapists and technicians and the shortage is likely to continue later also.

This only results in the hospitals being compelled to pay for the staff at market rates or it is unlikely that they will get people for their positions. While it is important to evaluate the ability of hospitals as going concerns also depend on the market share that they have, which may not be so important for other businesses.

This has to be viewed in the light of the fact that many hospitals have a monopoly on the market in their area, but is not likely to continue as going concerns for very long. In some other areas there are many hospitals which compete for a share of the market. There are also communities which are not able to provide enough patients for a hospital.

The condition of these hospitals has to be judged by the government based on the situation there, and in the cases of rural hospitals, there may never be enough patients. In many cases even the community has agreed to underwrite the losses that have been incurred by the hospital. (Donoghue, 1990) Thus even though the hospital may be seen to be having trouble the correct view can be taken only with a competitive view.

Sometimes the funding institutions themselves are in trouble as is the situation with the Catholic Charities USA which provides some $2.3 billion for the purpose of health care. At the same time, being religious does not provide knowledge of finance as Business Week reported for late Cardinal John O'Connor "though beloved by his flock, had a reputation for being a terrible financial administrator. He was ill at ease with wealthy donors who could have pumped up Church coffers. Yet he loved to bail out money-losing schools and parishes, and.