Rio Grande Medical Group Case

Rio Grande Medical Group Case Study

It is clear that costs for healthcare are rising and they are expected to continue rising. The most important reasons for this is that baby boomers continue to become old and make use of more healthcare; hi-tech diagnostics and treatments would continue to be developed, offered and taken approval; influence of sicker patients in HMOs and managed care ultimately meeting the conditions for treatment; enhanced costs of nursing shortage; and War. The objective of Rio Grande is to reduce the impact of this trend and satisfy people who are paying more for their health care and are thus less likely to approve of marginal or incompetent care. (Healthcare Trends for Financial Executives) Thus the costs have to be controlled, and we require better managers for that purpose.

Curriculum:

To decide what should be parts of the course, let us first list down the problem areas that we are facing. The first is that prescription drug and hospital costs are soaring. The second is that technological advances keep new procedures and processes at higher costs in the forefront. The third is that mandated or compulsory coverage from federal and state governments leads to increased additional costs. Whatever be the specific reason, consumers spent 10% more on health care in 2002 than the previous year -- the first double-digit increase since 1990. (Health Care Costs on the Rise) These are the three areas that we will have to tackle. Part of the exercise will be to convince the doctors to use less expensive drugs so that costs can be reduced, the second will be to use less of the new procedures so that costs are under control and the third is to control the mandated coverage from making a dent in the hospital budgets. Along with this is the fact that patients who are paying more have to be satisfied that they are getting adequate care.

Budget:

From the analysis above, it is clear that there are four areas to be covered - discussions on types or brands of drugs to be used in different cases; use of correct procedures for treatment of patients so that costs remain under control; control of mandated coverage from affecting hospital profitability and keeping patients happy. In all these, the first area will have to be covered by medical specialists in each area, and Rio Grande has five different areas. This is a very important area as Rio Grande has an excellent reputation and if any untoward incident happens, it will cause a permanent damage to the reputation of Rio Grande. For this purpose, it is likely that five specialists for five areas will have to be called, and the discussions may be held separately for each area. The period of discussions has been fixed as four hours each. This will however not disturb operations of any area in the hospital when the discussion for another department is going on.

The second area is important for three departments which carry out different procedures through which there may be complications. These departments are Obstetrics and Gynecology, Pediatrics and Urology. It should be clear that part of the costs for procedures, and in certain cases, all the costs are borne by Rio Grande and our objective should be to highlight on those aspects of the procedures that are undertaken. Here there is no attempt to stop any required procedure, but the aim is to carry out less expensive procedures when the cost is to be borne by Rio Grande. The patients should not be harmed, but the costs to be borne by Rio Grande should become less. For this purpose specialists from surgery will have to be called, and this session will have to be different from the first set.

The third area to be covered is treatment under mandatory coverage. This is a legal requirement and cannot be refused by any treatment center. At the same time, there are certain limitations within the treatment that is to be provided to them. There are also methods through which Rio Grande may try to recover as much of its costs as possible. For example, in some cases the costs may be recovered in installments from guardians of a child under treatment. This is a legal matter and has to be advised by a legal practitioner. This also has to be covered in a separate session.

The last session required is to present a happy face to patients who are dissatisfied with their bills. In most cases, the patients do not understand much about the bill and their dissatisfaction is limited to the quantum of the bill. For this purpose, the bill has to be explained to them if required. The solution is not to reduce the bill to make the patient happy as that will result in Rio Grande incurring further losses. This is an exercise in Public Relations, and what we require is a set of advice from a person who is accustomed to dealing with unhappy patients. This is the tenth session.

In terms of costs for the different sessions, the first five is estimated at a relatively low cost of $3,000 a session as the number of attendees will be smaller in comparison. The second set of sessions will also cost roughly the same amount per session as the number of attendees will be similar. The last two sessions will require attendance by all the staff, and the cost is thus expected to be higher at $5,000 a session. The cost includes payment to the speaker, lunch and coffee for the participants, charges for the hire of the conference rooms, and cost of materials that will be given to the attendees. It is impossible to judge in advance the quality of speakers as such programs have not been held earlier in the area. Thus it is important that the quality of the program be checked so that requirements for further programs in the particular area may be covered. For this it is suggested that Dr. Geremy Thomas personally attend all the programs. His attendance will also make sure that the discussions during the program will remain on the right track, and the recommendations will be implemented. If the above plan is accepted, then the total cost will be $34,000. This is however subject to approval and open to improvement as may be thought fit by Dr. Geremy Thomas.

Faculty skills:

This has been discussed separately for each session and the point to be remembered is that we are not talking about experts in medicine or surgery who will come and advise our staff. Our staff is certainly competent and that has been the history of Rio Grande from the time it was started in 1935. They do not need any advice in terms of treatment of patients. Even today there are not many complaints regarding the quality of treatment. According to research, kidney disease and strokes lead to the highest average costs per patient, and these conditions are not so prevalent like heart disease, cancer, trauma, mental disorders and hypertension. (Can Costs Be Controlled While Preserving Quality?) Rio Grande has facilities for Urology and they incur the highest costs, but the justification is not known. The expert who comes for the talk should be able to advise the doctors on this.