Having read the article “Performance management at Intermountain healthcare” by Richard M. J. Bohmer and Alexander C. Romney from April 22, 2009, it becomes obvious that no matter which actions are provided improved quality often reduces revenues. There are a lot of different explanations to his fact and the authors of the article tried to explain the dependence of the improvement of the services quality and the revenue lowering.
The main purpose of this paper is to assess critically the mentioned article and to try to understand the reasons of revenue reduction in cases when it should increase as the services of the better quality presuppose more appreciation from the side of the customers.
Having considered the practical example with clinical programs, performance management, and physician incentives, Richard M. J. Bohmer and Alexander C. Romney in their article managed to draw the following conclusions. One of the main reasons of revenue reduction is an “inherent tension between financial performance and the provision of high quality clinical care” (Bohmer and Romney 8).
His tension is explained by the inability of all citizens of the country to use the services of the IHC. If everyone in the county referred to the services of the IHC, the expenses would reduce by 34% that would result in sufficient savings of about 500 billion dollars. Looking at the situation from another point of view, it is possible to predict the reduction of the revenue as the result of the increased costs of equipment, staff and other specific services.
It is rather difficult to deal with the problems which are based on the financial issues which do not depend on the manager. One cannot reduce the quality to reduce the expenses. People want more and more comfort and quality in services. Healthcare is the sphere which cannot be omitted.
Trying to deal with the problem of reduction of the revenue at the expense of the increase of the quality of the services, IHC and the field of healthcare management should increase savings to compensate he loss. Savings increase is possible with the increase of the visitors and clients of the healthcare establishments. There is another problem connected with the reduction of the revenues, IHC can increase savings and really notice that increase only if the staff is reduced and the capacity is removed.
Therefore, the increased quality if the health care establishments reduces the revenue. Those organizations which appear on the way of choice whether to increase the quality of the services or to leave the level of the revenue should remember about the savings which are possible in this case.
Quality increase is obligatory and the healthcare establishments should think about the ways how to increase the quality and to leave the revenue. The world is changing and all the changes are directed at the increase of the quality and timeline of the services provided. The capabilities should be developed and this may be one of the ways out of the situation, even though the future seems uncertain and unclear. He services quality improved today will bring the profit in another form in the future and this is one of the most important issues.
Works Cited
Bohmer, Richard M. J. and Alexander C. Romney. “Performance management at Intermountain healthcare.” Harvard Business School 22 Apr. 2009. Print.