Background
The Memorial Hermann Health care system in Texas has a history that extends 100 years even though its outlook today took shape in 1990s when Memorial and Hermann systems merged. The memorial hospital was started by the Rev. Dennis Pevoto when he purchased an 18-bed sanitarium in a downtown neighborhood in Houston with an aim of establishing a hospital for all regardless of religion, ability to pay and race. Rev. Pevoto was then the superintendent of the then Baptist Sanatorium and worked hard to see the growth of the hospital and its mission.
The Hermann hospital, on the other hand, started in 1914 when George H. Hermann left his $2.4 million fortune for the building and maintenance of a hospital meant to benefit the poor and sick. It began operation in 1925, and the people who began this hospital believed that medical services should be made accessible to everyone. The hospital focused n saving lives, giving people a chance to face illness with courage (McManis Consulting, 2011).
After the merger of the two hospital systems, the Memorial Hermann has become the largest non-profit healthcare system in Texas. The organization serves the larger Houston community through its 11 hospitals, 7 Cancer treatment centers, 3 heart and vascular institute, 27 sports medicine and rehab centers. The Texas medical center has also grown to become the biggest medical center around the globe world. The mission of this health care system still remains to provide quality healthcare services to all people in Southeast Texas (Burke Center, 2009). A SWOT analysis into the health care system will evaluate its strengths, weaknesses, threats and opportunities.
SWOT analysis
Strengths
One of the greatest strength of Memorial Hermann is location. The organization has many hospitals, clinics, and service outlets in the Houston Metropolitan area, which are found, in 129 locations and with 21,000 employees (Burke Center, 2009).
Has the greatest market share of the hospital inpatient in Texas with 34% of the market. It has 11 hospitals with the largest one being MHH Texas Medical Center with 860 beds, eight suburban hospitals, 3 hearts and vascular institutes, a rehabilitation hospital and research institute, a children’s hospital, 8 comprehensive cancer centers and a Neuroscience institute (McManis Consulting, 2011).
After the Merger of the two hospital systems, the strategy focused on building market share and financial strength. The focus has shifted now to working in an environment where service providers are more accountable and risk for performance which is more responsive by becoming more integrated and working on the quality and cost of services (Burke Center, 2009). This strategy borrows from other industries such as commercial aviation and US Navy submarines especially in instituting patient safety.
An environment of transparency and “just culture” in the organization where people can speak of what is going on without being victimized or penalized is strength in the organization. According to the one of the directors, Charles Stoke, employees can say what they think is being done wrong and proactive actions taken to improve the situation (Rodak, 2012). This culture is also built through intensive training and other tools.
Weaknesses
In an environment where the financial incentives are changing towards more uninsured people, the hospital does not have the right number of beds, physicians, operating rooms and other facilities for this change to a new prototype of payment. The current fee-for-service system and the distribution of facilities will be too expensive for this change. The system’s payer mix for 2010 included 39% private health plans, 34% Medicare, 15% Medicaid and 9% uninsured (McManis Consulting, 2011).
The organization also faces transformational challenges facing multihospital system due to a fragmented private practice medical staff
Opportunities
The population of the state continues to grow and especially in the Houston metropolitan area where population stood at 5.9 million in 2009 and is projected to reach 6.6 million by 2014. More than one-third of this population is Hispanic which is among the main target market for the healthcare system due to their economic status. Also, the population of Houston is younger than the national average with only 8.6% of it being over 65 years of age, which compares with the nation’s 13%. More than one third of this population is also uninsured or self pay and is growing quickly (McManis Consulting, 2011).
The Organization can also have opportunities in the healthcare reforms that are moving from fee-for-service to the fixed price environment. Through consultation with a financial consulting firm, Wellspring, the organization is re-engineering its financial strategy geared towards consolidating services (Rodak, 2012).
Threats
There is a highly competitive market for hospitals and healthcare system in Houston. The area has 4,000 bed-capacities over what is needed now, this is according to McManis Consulting (2011), and there are many acute-care hospitals in the area. The Memorial Hermann system in most days has about 1000 vacant beds in its 2,920-bed capacity.
The market place for health care in Houston is also highly fragmented in regard to physicians whose majority is in small, independent practices and the majority of them also voice strong feelings against physicians being employees of health care systems (Burke Center, 2009).
Texas State prohibits corporate practice of medicine, the Legislations which significantly influences the relations between physicians and health systems (Burke Center, 2009).
Reference List
Burke Center. (2009). Working together to improve lives: Local planning and network development 2009-2010. USA: Burke Center.
McManis Consulting. (2011). ACO case study: Memorial Hermann, Houston, Texas. USA: McManis Consulting.
Rodak, S. (2012). Memorial Herman: Developing a high reliability health care organization. Web.