Congratulations – or - Condolences (as the case may be) You are the newly appoin
ID: 464672 • Letter: C
Question
Congratulations – or - Condolences (as the case may be) You are the newly appointed CEO of a large, multi-hospital network on the West Coast - Palo Alto Medical (PAM). However, PAM has undergone a tumultuous last 10 years in which your predecessor engaged in a bold, yet risky strategy of growth and expansion. Her initial overall strategy evolved as (1) developing a statewide integrated delivery system(IDS) grounded in academic medicine, (2) building regional marketshare to leverage managed care payers, (3) garnering capitated contracts,(4) achieving synergies and efficiencies among the assets acquired, and (5) using community/suburban hospitals to refer private-pay patients to teaching hospitals and fill their beds. The Health System rapidly expanded into two major cities through acquisitions encompassing several hospitals, medical schools, and primary care physicians (PCPs). By the end of her 8th fiscal year, PAM had transformed itself from a large, community hospital into the largest statewide integrated delivery system. In a speech, the CEO depicted hersystem’s phenomenal growth, sprawling organization, productivity improvements, growingmarket share, and improved physician network contribution. What she did not disclose were the financing mechanisms used to fuel the growth (internal subsidies, hidden internal cash transfers,raids on hospital endowments, and the enormous debt piled up from all of the acquisitions) and the resulting fiscal deterioration of the system. This deterioration initially manifested itself in hospital layoffs and one hospital closure, spending of $330 million more than the system brought in; a series of downgrades in the bonds supporting hospitals; a failure to pay its hospital liabilitypremiums and attempts to uncouple the system’s hospitals and sell them off. The growing financial problems became known through due diligence efforts of a potential buyer, but the revelation of massive financial problems and her use of hidden cash transfers to cope with them led to her ouster by the board.. PAM was running out of cash to maintain operations and payroll. It found itself with no firm purchase offer, no ability to cut costs (for example, by renegotiatingcapitated contracts with insurers and employment contracts with physicians), and no interim financing. In FY 10, the system was forced to declare bankruptcy. Hence, you have inherited a system of 10 hospitals. You were eventually able to sell PAM’s two medical schools, so you are “only” a massive provider of clinical care. You still have a large private physician referral network and have your own inpatient employed hospitalists. On the positive side, your system has a functioning EMR, after bankruptcy is out of financial debt, and is still known to provide high quality clinical care throughout your system. Amazingly, you are jointly accredited by The Joint Commission and ISO9001. You have been asked by me, Chair of the Board of Directors, to present your vision and specific plans for the next 3 years. Reasons you were hired was because of your MBA from Brenau University, familiarity with complex ethical issues in healthcare, and Shortell and Kaluzny’sLeadership and Management strategies. I expect you to address (at least): 1. Your Leadership Style within the organization. 2. Strategic Thinking and how PAM will regain its competitive advantage 3. Retention and motivation of existing staff and the recruitment of new staff. 4. Maintain and improve upon “Quality” within the organization. 5. Your ethics related to the strategic direction you propose.
Explanation / Answer
1A) Leadership style depends on the prompt need undertakings The primary reason was nature with complex moral issues in social insurance, and Shortell and Kaluzny's Leadership and Management systems. I would execute and take after Shortell and Kaluzny's Leadership style.
2A ) Regaining its competitive advantage :
3A ) Ways to maintenance and inspiration of existing staff and the enrollment of new staff :
4A ) Quality is the way to acquire benefits. Keeping up quality should be executed in every one of the issues , beginning from the clients and patient administration they get till the outpatient charge repayment plans. Approaches to enhance and keep up quality :