Hospital Management Concepts Great Lake Memorial Hospital has just entered into a five-year contract with Springville General Hospital to deliver quality care without duplication of services. We now have a new CEO who will be meeting with a current CEO. Dan Smith, the new CEO, has certain management options for dealing with inevitable key problems arising from merger. In addition, the CEO of Springville General Hospital must deal with inevitable issues arising from merger. Both CEOs will also require the cooperation of their hospitals' Board of Trustees and Medical Directors to ensure a smooth transition and consolidation of resources.

The key problems that Mr. Dan Smith will be Facing in his New Role

While a change in CEOs does not affect hospital performance per se (Li-Ping Tang & Timmer, 2008, p. 11), Dan Smith must deal with the large issues involved in mergers and acquisitions. Fundamentally, he must establish a good working relationship with the two other aspects of the hospital's tripartite structure, the Board of Trustees and the Medical Director. Together, with Smith as a guiding force for applying hospital policies and managing day-to-day hospital activities, they must be concerned with enhancing the "objective performance measures of customer service," which are: hospital beds, payroll, full-time employees, and patients served (Li-Ping Tang & Timmer, 2008, p. 2). Hospital beds represent the hospital's patient capacity and, since research shows that number steadily decreasing each year (Li-Ping Tang & Timmer, 2008, p. 16), Smith must concentrate on maintaining and/or increasing the number of hospital beds. Payroll, which is "the single largest cost category in hospitals" (Li-Ping Tang & Timmer, 2008, p. 16) and perhaps presents the most challenging issue for Smith, must be controlled and reduced, if possible. The number of full-time employees, which is inescapably...

Finally, Patients Served, which is intimately linked to both provided services and income (Li-Ping Tang & Timmer, 2008, p. 16), must be maintained and increased, if possible.
Management Options Open to Dan Smith

Smith has several management options. First, and perhaps chief among those options, is improving service quality by motivating staff for optimal Organizational Citizenship Behavior (OCB) by "enhancing their sense of belonging to the health care organization and, therefore, to the employees' corresponding self-esteem" (Bellou & Thanopoulos, 2006). By enhancing employees' identification with the hospital and their self-esteem, Smith can significantly improve the quality of service to patients. This higher quality of service is a valuable achievement in itself and should also increase the hospital's corresponding income, as patient perception of care quality is directly related to hospital utilization and income (Bellou & Thanopoulos, 2006). A second management option is decreasing hospital costs, which can be at least partially accomplished by thoughtful and thorough "consolidation of administrative units and functions" (Choi & Brommels, 2009) between the two merged hospitals. Prior to consolidation, the two hospitals have separate administrative and functional aspects which can be combined, consolidated and streamlined during and after merger in order to reduce duplication of services (Groff, Lein, & Su, 2007, p. 12), cut costs and enhance patient services (Choi & Brommels, 2009). A third management option is expanding access by efficiently wedding the two hospitals' resources, including but not limited to the number of beds and the variety of offered medical services, which should attract a great number of patients and allow referral of patients…