Ellen Zane Faced a Significant Case Study

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This left the company a shell of its former self, possibly even without the staff to deal with the problems it faced.

Faced with heavy losses, the company was having difficult with its financing. The state attorney general had stepped into the situation to ensure that Tufts-NEMC could meet its bond covenants. It would be reasonable to expect that securing future financing would be either impossible or difficult. The company was in the process of re-creating the administrative departments that it had lost as a result of the merger. Some cost-saving improvements were on the table that would hopefully bridge much of the losses, but at this point the company is still slated to lose money in 2003 even if all projections materialize at their most positive. Staff reductions are also underway, which is a risky proposition. It brings the company out of its financial difficulties, but reduces operating capabilities. The hospital is also looking to sell some of its real estate. Again, this generates income in the short run but does nothing to solve the hospital's ongoing problems and it hampers the ability of the hospital to expand in the future.

4. There were a number of steps that Ellen Zane undertook in her first six months on the job as part of the organization change and rebuilding process at Tufts-NEMC. The hospital had effectively lost touch with the political leaders as a result of its merger with Lifespan, so the first step for Zane was to reconnect with the political leaders in order to improve the political environment for the hospital. This required spending substantial amounts of time with city and state leaders, networking and rebuilding the name and image of the hospital locally.

At the same time, Zane brought in a team of consultants to help diagnose the problems at the hospital. With so many problems, they needed to be understood clearly and prioritized so that they could be addressed in the most efficient and effective manner. This information gathering process allowed Zane to take action quickly, but without compromising effectiveness. Once she knew what to do, she had the connections to make the necessary changes happen.

Another action that Zane undertook in her first six months was that she set benchmarks. She analyzed where the hospital stood financially. This performance was benchmarked against the other players in the industry and Tufts was performing poorly. She took this information and set about ways of bridging the gap between Tufts' performance and the performance of the hospital's peers. For example, there were savings that could be found in the supply chain (stretching payables, for example). In addition, she was able to determine that the hospital was underpaid -- Lifespan had been setting rates that were befitting Rhode Island, not the more expensive Massachusetts.

Lastly, Zane set about implementing her plans. She replaced half of the senior management team, as many incumbents were clearly incapable of being effective. She revamped the recruitment and retention process for physicians. Zane was also able to build better relationships within the industry, bringing on board other hospitals as partners on projects and seeking insurance deals. Zane accomplished all of this with an Agenda for Change, a roadmap for implementing the…

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