Term Paper on "Case Analysis Let it Pour"

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This analysis of the mission statement allows us now to define and analyze the organization's problem by referring to the two declared elements that form the mission statement and will emphasize the problems that the organization faces, as seen in the case study.

If we discuss providing services, we need to point out to some of the particularities in the health industry with regards to providing services. Contrary to other services, a hospital has to take into consideration several delicate factors when providing a service, like ethics, the "customer's" background, social and financial condition, religion or moral code - only to mention a few. Each separate particularity can be, in part, considered an issue.

For example, the moral and ethic dilemmas that doctors face can influence the performance of a hospital in terms of service provided. According to the Hypocrite's Oath, doctors have sworn to perform all that is possible in order to save a human being's life. In many cases, this is equivalent to encouraging and supporting year-long commas, painful lethal diseases and children that are born with malformations. In many of these cases, it seems more human to not do anything at all.

Our case study is relevant to the dilemma doctors face: where does "all that is humanly possible" actually stop and where from is it unreasonable to persist in the attempt of saving somebody's life? We can thus list the first problem, as it appears in the case study, as the degree (ethical and moral, but with significant financial implications) to which a medical service can be provided. Further more, we also need to ask ourselves when a medical service can be applied.

The appropriate answer would be to anyone and at the highest degree, however (as the case study points out), what is to be done with the patients who refuse treatment, with those who are terminally ill and with those who refuse a certain treatment because of their religion (some sects refuse surgical treatment for example).

The moral and ethical problem we have previously presented is now doubled by religious and philosophical perspectives. Does an individual have the right to refuse medical treatment and what is the doctor supposed to do in these situations?

This brings us to the second problem the organization is facing at the present time. This is a financial problem, because, as an organization, the hospital is forced to deal with costs as well. Any increase in costs would mean either that less medical treatment is to be provided for the patients or that the medical treatment is just not enough.

We need to have a look at the financial data in order to deal with this problem. As described in the case study, the costs per patient have increased from $217 to $240. The indicator does not necessarily reflect a less efficient activity, but the fact that the number of patients has decreased by 7%, while the costs have remained more or less the same, because a large portion of them (28%) is provided by fixed costs.

The problem with fixed costs is that they are generally constant from one month to the other. An organization cannot influence the cost of electricity or gas, for example. These costs are determined by the suppliers.

This means that the hospital needs to have a look at its variable costs. While the number of patients has decreased by 7%, the per patient cost has increased with 11% and this may show a problem.

A third problem identified in the case study is partially related to the financial problem and partially related to the second part of the mission statement (working with specific partners). Unfortunately, much of the hospital's financial health is given by its relationship with different insurance companies and regulators, like the HMOs, the PPOs or the TLAs. These companies cover most of the variable costs that a hospital is faced with, relating to specific costs per patient, and the fact that they pay later than they should or that they do or do not cover some of the expenses determines a healthy situation for the hospital.

An additional problem could thus result from the relationship that he hospital has with its partners and the way this relationship has been defined. The hospital seems to have the weaker hand in negotiations with its suppliers, which determines the fact that "who gets covered, how much and when we get paid seem to be totally out of our hands at times."

Finally, a fourth and last problem that can be identified in this case study is the relationship and communication with the hospital's employees. The hospital does not have a clear set of rules and regulations regarding patient treatment imposed on the hospital staff. One of the residents has ordered a set of expensive exams, there are cases of doctors providing counseling pro bono and pharmacists who filed uninsured prescriptions. All these show a clear problem of coordination, where decisions are made at lower levels within the hospital without any consultation of higher authorities within the organization and without considering, relating to or having any knowledge of the hospital's financial situation.

Alternative Solutions

Each of the problems described here imposes one or several solutions of its own. The relationship with the hospital's employees is a good place to start a general reform of the decision making process within the company, with direct impact on the financial problem discussed.

As such, one proposed solution could refer to the establishment of a set of rules and regulations that the hospital staff would need to abide by. This set of rules can be established with the direct participation of the employees, who will thus feel included in the decision process within the hospital. As soon as they understand that the hospital has, as any other organization, costs and revenues which determine its functionality, the employees will behave more rationally in certain situations.

As for the hospital's relation with insurers and regulators, it is clear that the fundamental rules that govern business relationships and contracts in general are not functional or not determined in this case. The contract should clearly stipulate both which part pays for certain services and when the respective part needs to fulfill its payment obligation. As soon as these terms are not respected, the company can simply sue the suppliers for not respecting the letter of the contract.

The financial problem has simple financial solutions. Cost reductions need to be performed in order to make the entire process more efficient. Cost reductions can be performed either by reducing fixed costs or by reducing variable costs. As the first task is much more difficult to achieve, reducing variable costs seems a more appropriate approach.

One of the solutions to reduce variable costs has already come from one of the previous solutions proposed. A distinct set of rules and regulations for the employees will certainly help the hospital save money in some particular cases. Additionally, a better management of the relationship with third parties (insurers, for example) will ensure a better performance of the hospital's cash flow and will help improve the overall financial situation.

The last problem, concerning ethics and moral, is the most difficult to address. When we work with figures and financial situations, it is easier to take decisions and draw conclusions, because the facts are easier to judge. With moral… READ MORE