Phelps Hospital offers several inpatient services that include surgery, obstetrics, medicine, physical therapy psychiatry, and pediatrics. It is a community hospital with 235 beds with a 70% occupancy rate. The hospital is facing financial challenges, and both the young and the old physicians present their recommendations to fix these problems. This paper seeks to discuss the financial issues of the hospital, along with the strategies and recommendations to be involved to help resolve the economic problems. The paper also provides the role of the chief medical officer and the chief executive officer.
The hospital is facing many financial problems that include a projection of a $3.5 million deficit per year for the next decade. This is due to the reimbursement of Medicaid and Medicare at a lower rate than the current cost of operations. Despite this projection, specialists are demanding more benefits for picking calls for the ED, and additional pay for Medicaid and lower-income patients (Kovner, n.d.). This is a major challenge for the hospital since it has inadequate funds to facilitate these operations.
The hospital raises around two to three million dollars through philanthropy per year. This is a challenge for Phelps because the amount of money raised through philanthropy is uncertain, therefore is a recipe for financial problems it is facing. Additionally, it is operating at a lower profit margin of 1.8 percent, which makes it difficult for the hospital to expand its services and grow economically (Kovner, n.d.). As time goes, the costs are increasing with lower reimbursements, and the physicians have made their way to Phelps due to the health benefits and incomes they are guaranteed. These benefits have become a major challenge that creates losses thus bringing financial burden to the facility.
Therefore, to address these issues, Phelps needs to implement strategies that will help make healthcare as profitable as possible. With the reimbursements becoming ineffective in covering for the operational resources used in the hospital, a tactic that could help Phelps recover finances is crucial. Overtreatments and unnecessary surgeries at Phelps are a factor the burdens the financial growth. Therefore, an approach that looks into eliminating these poor practice patterns that lead to the wastage of resources is crucial in advancing the economic growth of the hospital (Ginter et al., 2108). Physicians that execute wasteful actions will need to be disciplined by being retrenched or penalized. It will enhance the usage of resources in the most economical way, resulting in savings. This money can be channeled to the employees that stand out in their duties.
The physicians who effectively provide high-quality care with minimal resources should receive stipends and increased pay as their compensation (Ginter et al., 2108). On the other hand, the employees should work hastily to cycle through the patients that need care as it could result in more profits. The chief cardiology, Doctor Arthur, presents that quality or thoroughness is not that important to payers, but instead, the high volume rushing through many patients is what matters to them (Kovner, n.d.). This method can be effective while simultaneously minimizing the wastage of medical resources and will be beneficial in generating more profits. The motivation for the physician to effectively execute this strategy is the extra compensation for the additional effort they provide.
The older physicians who have been in practice for several years have developed to exemplify their profession as a regime that strives to better the health of others. On the contrary, the younger physicians tend to have a different view of the spectrum. They view the profession as a lifestyle that seeks to generate more income and increase living standards (Kovner, n.d.). The CMO, Lawrence, presents that there is little flow of money in the hospital and that the demands of the younger physicians are hard to meet.
By taking on additional services like providing for the ED, the younger physicians demand compensation with additional benefits with money that the hospital cannot afford. On the other hand, the older physicians recommend cycling through a large volume of patients as quickly as possible to generate more profits, however, rushed efforts may lead to poor quality care. A tactic that aims to combine the recommendations of the young and old physicians is needed to create a well-rounded staff that tries to uphold care and the needs of all employees in Phelps (Clausen, 2019). The hospital, therefore, need to make a conscious effort to use required medical resources and prevent unnecessary operations in medical procedures. The employees who eliminate unnecessary operations along with taking calls for ED should have their compensation from the saved money.
Keith Safin, the CEO of Phelps, has his role centered on the business-related actions of the hospital. He is responsible for managing operations, resources and making solid decisions that affect Phelps in its dealings as a business entity (Chletsos & Saiti, 2019). He is entitled to look into the potential plans that can enable the hospital to adapt to giving the best services to the patients and employees. On the other hand, Lawrence, CMO of Phelps, is entitled to the medical-related actions of the hospital. His role is to ensure the quality of health care, good networks, physician discipline, certify academic affiliations, and proper credentialing (Chletsos & Saiti, 2019). He is to ensure that physicians understand their obligations and perform their tasks to the required level.
Phelps is a large healthcare facility that provides various inpatient services to a variety of patients’. Its capacity and occupancy rate signals its ability to be outstanding in the market share. Therefore, it needs good leadership and management with tactical skills to drive it out of the financial crisis and model it into a profit-generating entity with beneficial impacts for the patients and the employees.
References
Chletsos, M., & Saiti, A. (2019). Strategic management and economics in health care. Springer.
Clausen, J. A. (2019). Regulate physician restrictive covenants to improve healthcare. Kentucky. Law Journal, 108, 111.
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care organizations. John Wiley & Sons.
Kovner, R. A. (n.d.). Where the rubber hits the road: physician-Phelps hospital relationships. Professional Integration. Case Study.