Question

Entering and Contracting Contracting at Charity Medical Center

Charity Medical Center (CMC), a five hundred-bed acute-care hospital, was part of the Jefferson Hospital Corporation (JHC). JHC, which operated several long-term and acute-care facilities and was sponsored by a large religious organization, had recently been formed and was trying to establish accounting and finance, materials management, and human resources systems to manage and coordinate the different facilities of particular concern to CMC, however, was a market share that had been declining steadily for six months. Senior management recognized that other hospitals in the area were newer, had better facilities, were more "user friendly," and had captured the interest of referring physicians. In the context of JHC's changes, CMC invited several consultants, including an external OD practitioner named John Murray, to make presentations on how a total quality management process might be implemented in the hospital. John conducted an initial interview with CMC's vice president of patient-care services, Joan Grace. Joan noted that the hospital's primary advantage was its designation as a level-one trauma center. CMC offered people needing emergency care for major trauma their best chance for survival. "Unfortunately," Joan said, "the reputation of the hospital is that once we save a patient's life, we tend to forget they are here." Perceptions of patient-care quality were low and influenced by the age and decor of the physical plant. CMC had been one of the original facilities in the metropolitan area. Finally, Joan suggested that the hospital had lost a substantial amount of money last year and considerable pressure was coming from JHC to turn things around. John thanked Joan for her time and asked for additional materials that might help him better understand the hospital. Joan provided a corporate mission statement, a recent strategic planning document, an organization chart, and an analysis of recent performance. John also sought permission to interview other members of the hospital and the corporate office to get as much information as possible for his presentation to the hospital's senior management. He interviewed the hospital president, observed one of the nursing units, and spoke with the human resources vice president from the corporate office. The interviews and documents provided important information. First, the documents revealed that CMC was not one hospital but two. A small, 150-bed hospital located in the suburbs also reported to the president of CMC, and several members of the hospital's staff held managerial positions at both hospitals. Second, last year's strategic plan included a budget for initiating a patient-care quality improvement process. Budget responsibility for the project was assigned to Joan Grace's department. Third, the mission statement was a standard expression of values and was heavily influenced by the religious group's beliefs. Fourth, the performance reports confirmed both poor financial results and decreasing market share. John's interviews and observations pointed out several additional pieces of information. First, the corporate organization, JHC, truly was in a state of flux. There were clear goals and objectives for each of the hospitals, but patient, physician, and employee satisfaction measures,human resources policies, financial practices, and material logistics were still being established. Second, the management and nursing staff heads at CMC were extremely busy-usually attending meetings for most of the day. In fact, Joan's secretary kept a notebook dedicated to tracking who was meeting where and when. Third, a large consulting firm had just been awarded a contract to do "job redesign" work in two departments of the hospital. And fourth, most of the nursing units operated under traditional and somewhat outdated nursing management principles. In developing his presentation, John thought about several issues. For example, the relevant client would be difficult to identify. Joan Grace was clearly responsible for the project and its success, but the president, referring physicians, the suburban hospital, and the corporate office were important stakeholders in a TOM process and needed a voice if it was to succeed. In addition, the presenting problem was a decline in market share. The job redesign contract awarded to the other consulting firm seemed disconnected from the TQM effort, and both efforts seemed disconnected from the market share problem. John wondered how the hospital viewed the relationships among total quality management, job design, and market share. He also questioned whether he was the appropriate consultant for CMC. The firm doing the job redesign used a packaged approach to change that conflicted with John's OD-based philosophy. Using the information gathered and his reflections on the project, John gave his presentation to senior management about implementing a total quality management process at CMC. His presentation included a history of the quality movement and how it had been applied to other health-ca re organizations. Several examples of the gains made in patient satisfaction, clinical outcomes (such as decreased infection rates), and physician satisfaction were incorporated. He noted that implementing a quality process was a major organizational change, requiring a thorough diagnosis of the hospital, a considerable commitment of resources, and a high level of involvement by senior management. Without such involvement, it was not reasonable to expect the kinds of results he had described, John also suggested that total quality management was capable of addressing certain problems but was not designed to address directly such broader performance issues as market share. Finally, John described his track record at implementing quality improvement process in health-care organizations. He shared seve ral references with the group members and encouraged them to talk with former clients regarding his style and impact. John also noted that he had been referred to CMC by the religious organization that sponsored the hospital system and that it was aware of his work in another medical facility John Murray's presentation to the senior management team at CMC was well received, and patient-care vice president Joan Grace asked John to meet with her to discuss how the change process might go forward. At the meeting, John thanked Joan for the opportunity to work with CMC and suggested that the next year or two represented a challenging time for the hospital's management. He identified several knotty issues that needed to be discussed before work could begin. Most important the hospital's rush to implement a total quality management process was admirable, but he was worried that it lacked an appropriate base of knowledge. Although performance and market share were the big issues facing the hospital, the relationship between those problems and a quality program was not clear. In addition, even if a TQM process made sense, managers and nursing heads were frustrated by their inability to influence change because of their busy meeting schedules. A quality improvement process might solve some of those problems but certainly not all of them. Joan acknowledged that both with change were problems that needed to be addressed. She explained that the hospital wanted help to improve the quality of patient care and to increase patient, employee, and physician satisfaction with the rformance and frustration JEV hospital. Improvements in those areas were expected to produce important gains in hospital performance. Joan asked John if he could generate a proposal that addressed those issues as well as managerial frustration with the inability to make necessary changes. John agreed to put a proposal in writing but suggested that it would be helpful to discuss first what should be included in it. John thought that discussing several issues now would improve the chances of getting started quickly. He outlined several issues that the proposal would cover. First, the hospital should thoroughly diagnose the reasons for market-share decline, the current level of patient-ca re quality, and managerial frustration with making changes. That diagnosis would require access to the corporate officer's at JHC to discuss their relationships with CMC. In addition, several managers and employees of the hospital, as well as some physicians needed to be interviewed. Second, the proposed job redesign effort being conducted by the other consulting firm should be postponed. Finally, CMC management should meet for two days to examine the information generated by the diagnosis and to make a joint decision about whether a total quality management process made sense. Joan looked uncomfortable. John's requirement seemed unreasonable given that the hospital simply wanted to improve patient-care quality and stake holder satisfaction. For example, getting the senior administrators to commit to two days away from the hospital would be difficult. Everyone was busy, and finding a time when they could all meet for that long was nearly impossible. In addition, there was a sense of urgency in the hospital to begin the process right away. Collecting information seemed like a waste of time. Finally, and perhaps most important postponing the job redesign effort was a sensitive issue. The project had strong political support, and the other consultants had provided a clear ten-step process and timetable for the work design changes. John told Joan that he appreciated her concerns and her willingness to confront these issues. He explained that his requests were necessary if the prospect was to be successful and that he had thought carefully about them. Collecting the diagnostic information was, in fact, the first step in any quality management process The very basis of a TQM effort was data-based decision making. To begin a quality process without valid information vio lated fundamental principles of the approach. More important to proceed without that information could very well mean that the wrong change would be implemented. John suggested, for instance, that the market share problem could result from the way CMC was treating the physicians. If that were true, a quality program would be inappropriate and costly. Instead, a program to improve the relationships with physicians might provide a better return on CMC's investment. The two-day meeting was therefore very important. Once appropriate data were collected, the senior managers could decide, based on fact, what exa ctly should be done to address hospital performance; employee, patient and physician satisfaction; and managerial frustration? John explained that a quality management process, if necessary, required attention to CMC's structure, measurement, and reward systems as well as its culture. The two-day meeting of the senior management team would permit a full explanation of the TQM process a description of the necessary resources, and a discussion of the commitment necessary to implement it. Following that meeting, he could provide a more explicit outline of the change process. Finally, John acknowledged that the politically sensitive nature of the job redesign program made resolving this issue more difficult. He explained his belief that any redesign effort that did not take into account a potential TQM process likely would have to be redone. He argued that to proceed blindly with a job redesign effort might result in money spent for nothing. Joan believed that John could have access to the consulting firm doing job redesign but that there was little chance of postponing the program for very long. Again acknowledging the political support for the program, John offered to coordinate with the other consultants but strongly urged Joan to postpone initiating the project until after the two-day management meeting. Joan said she understood his concerns but stated that she could not make that decision without talking with the senior management team. John accepted that and asked if his other requests now made better sense. Joan replied that a two-day meeting did seem important and worth the effort. In addition, access to the corporate officers, employees, managers, and physicians was a reasonable request and could be arranged. Responding to John's example of a physician relations program, Joan informed him that although CMC had such a program, it was not very effective because managers had become too busy to pay attention to it. ACthis point, Joan had to go to another meeting. They adjourned with the understanding that Joan would speak with the other managers and get back to John, A week later, Joan called and agreed to John's requests. She asked him to submit a written proposal covering the issues discussed as soon as possible.

Answer the following questions based on the given case:

1- State the reason why Charity Medical Center wanted to initiate change process?

2-What are the important documents John has received in order to study the situation?

3-What information John has identified from these documents?

4- What John was thinking while preparing his presentation to the top management of CMC?

Answer 1

Answer 1) Charity Medical Center wanted a 'Job Redesign' and therefore, wanted to implement "Total Quality Management" in the hospital. The reason for such change requirement was that the perceptions of patient-care quality were low, hospital had lost a substantial amount of money last year and considerable pressure was coming from JHC to turn things around because their market share had also been declining for six months.  

Answer 2) John had received the following documents from Joan:

- a corporate mission statement

- a recent strategic planning document

- an organization chart

- an analysis of recent performance.

Answer 3) John had identified the following points from the documents:

i) the documents revealed that CMC was not one hospital but two. A small, 150-bed hospital located in the suburbs also reported to the president of CMC, and several members of the hospital's staff held managerial positions at both hospitals.

ii) , last year's strategic plan included a budget for initiating a patient-care quality improvement process. Budget responsibility for the project was assigned to Joan Grace's department.

iii) the mission statement was a standard expression of values and was heavily influenced by the religious group's beliefs.

iv) the performance reports confirmed both poor financial results and decreasing market share.

Answer 4) John was thinking that the relevant client would be difficult to identify. Joan Grace was clearly responsible for the project and its success, but the president, referring physicians, the suburban hospital, and the corporate office were important stakeholders in a TOM process and needed a voice if it was to succeed. In addition, the presenting problem was a decline in market share. The job redesign contract awarded to the other consulting firm seemed disconnected from the TQM effort, and both efforts seemed disconnected from the market share problem. John wondered how the hospital viewed the relationships among total quality management, job design, and market share. He also questioned whether he was the appropriate consultant for CMC. The firm doing the job redesign used a packaged approach to change that conflicted with John's OD-based philosophy. Using the information gathered and his reflections on the project, John gave his presentation to senior management about implementing a total quality management process at CMC.