Introduction
Organizations set goals they aim to achieve within or after specified periods. However, some issues make it impossible for them to achieve their dreams; therefore, they must transform their operations to ensure they increase the possibilities of succeeding. Health care facilities must offer quality services because of the nature of their operations.
They are supposed to save lives and promote good health and this means that their systems and staffs must be efficient. This paper examines a case study that presents various strategies employed by the Duke University Children’s Hospital to transform its operations.
Definition and Case Summary
A transformation is a deliberate effort that is aimed at improving various issues in organizations. This process occurs when there is poor performance due to internal or external factors that affect the activities of an organization. Duke University Children’s Hospital experienced serious financial challenges between 1993 and 1996 and this forced its managers to develop strategies to restore the organization’s performance.
This facility offers health carte services to children and has a 135- bed capacity. Managers realized the expenses of this hospital were more than its income and the trend seemed to be constant; therefore, it was necessary for them to address issues that contributed to this unfortunate situation.
Point of View
The case study was written from a third person’s point of view. There is a possibility that the author was part of the key administrators at the hospital. The individual understands various operations of this institution and this means that he held a high position that enabled him to know what happens in the hospital.
An outsider or subordinate staff cannot have access to boardroom meetings and know what is discussed by senior members of this hospital. In addition, the author understands the financial and operational procedures of this organization and that is why he offered a comprehensive analysis of the performance of this hospital.
Changing the Hospital’s Strategies
This hospital faced a deep financial crisis in 1996 and this compelled it to change its strategies. There were several issues that led to this problem and these were attributed to behavioral, structural and financial factors that made it difficult for this organization to achieve its goals.
First, there was a decrease in medical allowances for patients that had been admitted into the hospital. This means that the facility was facing financial difficulties and it was difficult to offer quality services without adequate funds. Medicaid allowances had decreased and since the hospital relied heavily on this program to finance its processes it was impossible to make profits yet it had to look for other sources of income to support its activities.
In addition, the number of patients with capitated reimbursement had increased; therefore, this exerted a lot of pressure on the hospital’s funds. These two factors led to an increase in the cost of children’s services that rose from $10,500 to $14,889 in 1993 and 1996 respectively.
Secondly, the chief executive officer (CEO) and chief operating officer (COO) had limited abilities to control most portions of the components that determined the financial performance of the hospital. Physicians played significant roles in determining the length of stay of patients, laboratory tests and drug prescriptions.
Nurses ensured the services offered by this hospital were of high quality. These issues were beyond the managers’ abilities to control them; therefore, it was not easy for them to change the organization’s financial performance without involving physicians and nurses.
Lastly, the presence of different departments that worked independently was another factor that contributed to the financial crisis of 1993/1996. Each department focused on its own objectives and ignored the need to work as a team with other sectors to achieve the goals of this organization. There was poor coordination among departments and this made it difficult for this hospital to develop effective cost management plans.
Steps Taken
The most important step the hospital’s chief medical director Jon Meliones took was to identify the cause of the financial crisis that affected the hospital.
He realized that all hospital executives were not in total control of the financial performance of this facility. In addition, he noted that the efficiency of these executives were not adequate to compel other departments to improve the performance of the organization. He was the leader of a team that evaluated the importance of teamwork in this organization to ensure its mission and objectives were achieved.
The need to improve the performance of this facility forced him to seek assistance and attention from other stakeholders including nurses and physicians. It was necessary for him to involve them in solving this problem because he had noted that the hospital’s financial position was determined by the performance of all workers. He ensured the hospital offered quality services to make its customers happy and generate profits. He was very instrumental in advocating for the need for departments to work together.
Changes in Behavior
The administrators of this hospital noted that it was necessary for its workers to change some behavioral aspects to ensure it achieves its objectives. First, there was the need to educate and inform workers from different departments (administrators, physicians, nurses, accountants and other employees) that even though they performed different roles they were to work as a team.
This step was important because it helped workers to change their perceptions regarding their roles in this facility. They had to focus on providing quality services in their departments to ensure the hospital achieved its objectives. Unity among all stakeholders was necessary to ensure there was coordination and unity between departments.
In addition, it was necessary to create a shared sense of responsibility among all workers to enable the hospital to regain its financial position. Meliones realized that it was important for employees to know that they were part of the organization; therefore, their contributions to the hospital’s success were indispensable.
This was a key aspect that motivated them to develop unity and strong ties with members of different departments. Therefore, all workers participated in decision making and this helped them to realize the importance of working together to offer quality services and improve the hospital’s performance.
Driving Change within the Pilot Unit
Meliones was very influential in leading his staff to evaluate the causes of the financial crisis the company had experienced. The team realized that there was no coordination among different departments and this was a major cause of its poor performance. He noted that there was the need to ensure all departments worked together to promote the quality of services offered by the hospital. He led his team to develop different strategies that ensured the facility functioned as a team and not a collection of different departments.
This led him to educate his team on the need to embrace a shared sense of responsibility to improve the hospital’s performance. The team adopted a motto titled “No Margin, No Mission” to promote excellent financial performance and patient care. This ensured the team concentrated on pediatric intensive care and this helped the facility to offer timely and quality services to patients.
Roles were redesigned to ensure all stakeholders participated in key decision making and played their roles as a team. Behavioral change was also a key aspect that was addressed by the pilot plan to ensure workers understood their roles in improving the performance of the hospital.
Effectiveness of the Effort
The efforts and plans initiated by Meliones and his team helped the hospital to regain its performance and reputation within three years. The team embraced the need to work together to promote unity and understanding among members of different departments.
In addition, workers realized that it was important for them to perform their different duties and focus on the need to improve the financial position of this hospital. Moreover, they concentrated on pediatric intensive care to ensure the facility offered quality and affordable services and at the same time achieved its financial targets.
Conclusion
Duke University Hospital faced serious financial challenges between 1993 and 1996 but managed to control this situation by educating its workers on the need to work together.
Jon Meliones and his team restored the financial position and reputation of this company by developing and implementing behavioral changes that led to the redesigning of responsibilities, roles and relationships of workers and departments. Therefore, it managed to return to its profitability in three years despite the decrease in Medicaid allowances and high number of patients with incapacitated reimbursement.