Question

You are a consulting team from a major regional healthcare consulting firm. You have been engaged by the CEO of a major healthcare provider in a competitive environment. The CEO of Medical Center informs you that the Board of Directors has asked that monthly reporting not be limited to financial projections and budget-to-actual reports. Rather, they are becoming concerned with evaluating the Medical Center’s performance on value.

The board still has a fiduciary responsibility to ensure the financial health of the organization and member are increasingly concerned with value provided, not just cost. The CEO asks your team to advise her on what she should propose to the board for such monitoring of value.

As you draft your team’s recommendations, answer the following questions for the CEO and Board:

1. Why might the Board of Directors want to monitor value and what accountability system would you recommend?
2. Describe your recommendations for how the Board and CEO might create an organizational unit to measure and monitor value. Who do you recommend lead the efforts? What knowledge, skills and training might be helpful for that leader? What department might have prime responsibility and who else in the organization must contribute/be involved?
3. What data, metrics and benchmarking does your team recommend and why?
4. Describe what you anticipate will be the short-term and long-term impacts on revenue and cash flow and why?
5. Analyze the roles and responsibilities of the medical staff leadership in value improvement.
6. What benefits do you forecast for the Medical Center, the community and patients?
7. Describe how Information Technology might contribute to this value improvement project.

Answer 1

1. Why might the Board of Directors want to monitor value and what accountability system would you recommend? - The Board of Directors want to focus on value being provided to customers i.e. patients and their relatives in order to ensure a long-lasting growth. Also, on moral values of providing best services to patients and ensuring their care and safety. Thus, patient satisfaction is on top of their agenda. For this purpose, I would suggest a feedback process be initiated to gain the data related services being rendered by the Medical Center, the staff efficiency and suggestions for further improvements.
2. Describe your recommendations for how the Board and CEO might create an organizational unit to measure and monitor value. Who do you recommend lead the efforts? What knowledge, skills and training might be helpful for that leader? What department might have prime responsibility and who else in the organization must contribute/be involved? - There must be a effective feedback system combined with performance management system to measure and monitor value. The CEO can initiate the process by motivating the Head of various departments to become more result-oriented and work collaboratively along with other employees towards improving processes to create and enhance value from patient perspective. The HODs may require training on Lean Management concepts and it's various tools which will help them achieve this task. The management and the Board must support the improvement initiatives. Also, patients and their relatives will be of additional importance in terms of input to the system.
3. What data, metrics and benchmarking does your team recommend and why? - We recommend using competitor analysis and customer feedback rating as metrics for benchmarking.
4. Describe what you anticipate will be the short-term and long-term impacts on revenue and cash flow and why? - On a short-term basis - there will be some investment in providing professional training to all staff and HODs. Since, the Medical center staff would be involved in training and upgrading, it may experience a slack in revenue. However, the long-term impacts will be worthwhile, in terms of higher revenue and increased cash flow.
5. Analyze the roles and responsibilities of the medical staff leadership in value improvement. - Medical staff have to be motivated to contribute towards value improvement. They have to be energetic and work hard towards achieving success in their improvement project. For this they have to be dedicated and self-driven through ethics and value.
6. What benefits do you forecast for the Medical Center, the community and patients? - The Medical Center will have gained higher reputation and result in winning faith of the community and patients. Also, it's staff would be highly motivated. The community would have a reliable center to go to in case of any emergency. And the patients would receive the best healthcare services.
7. Describe how Information Technology might contribute to this value improvement project. - Information Technology will facilitate data management and analysis.