Critical Thinking Case Study
Critical Thinking Case Study
I. Problem Identification
Faith Community Hospital has two main problems that need to be addressed. The first is the increased costs associated with normal operations. The second is the inconsistency with which the staff and partners interpret and follow the hospital’s policies and procedures. These two problems are snowballing into areas that are intertwined by nature. They cross boundaries into finance, ethics, employee morale, and partner relations.
II. Criteria, Goal, and Objective Definition
To address the first problem of increased costs, the hospital’s basic business structure needs to be reviewed. Faith Community Hospital is a non-profit hospital that serves the community. It has a Board of Directors that assists in major business decisions. Although they are a non-profit, they still have to meet their basic financial obligations to keep their business operating. The healthcare industry is one of the best areas to be involved with because they do not experience normal economy-driven peaks and valleys. To that end, they cannot predict who is going to get sick and they cannot will those people to get sick in order to meet their bottom line. There are several costs that are fixed and the hospital has no control over this fact. Key players in this decision will be the CEO, Financial Analyst, and Executive Assistant.
The second problem that Faith Community Hospital faces is their organizational policies and the varying degrees of interpretation by staff, doctors, and partners. Their current mission is:
“With the foundation and commitment of our spiritual heritage and values, our mission is to promote the health and well-being of the people in the communities we serve through a comprehensive continuum of services provided in collaboration with the partners who share the same vision and values.”
They are seeing the fact that it is open to interpretation and that it is defeating the purpose of the mission conveying a single statement to people. This rolls into different people viewing the hospital’s goals differently and therefore, they move forward in different directions but they both think they are supporting the hospital’s viewpoint. Key decision-makers will be the CEO, Executive Assistant, and Operations Director. The Operations Director has also employed the assistance of a technical writer to assist in assembling a lucid mission statement as well as the services of an HR trainer to host sessions to review company policies if needed.
The goal of Faith Community Hospital in spite of the financial problems is to provide professional and compassionate healthcare services to the community while still being able to meet their own financial needs. They need to find a level of financial operation that will adhere to the rise and fall of patient population on a continuing basis.
They want to develop and adhere to a mission that is understood consistently by all people. This mission should express their objectives and should not be able to be misinterpreted in any manner. The hospital’s executive and managerial staff should proceed with business in a uniform way to show people they are united in their efforts.
III. Problem Effects
If Faith Community Hospital is unable to meet their financial obligations, there is only one choice and that would be to close its doors. They can only run in the red for so long before it becomes impossible to continue their operations. They have control over a number of expenses but there are fixed costs that they cannot control or cutback on. These fixed costs include utilities, payroll to an extent, property costs, and insurance.
If Faith Community Hospital keeps its mission as is, it will continue to have problems with customers, staff, and other personnel misunderstanding its reason for operating. This misunderstanding can lead to loss of profit from potential clients and the possibility of losing staff as well if that staff misunderstands the hospital’s mission and purpose.
IV. Problem Cause
The main cause of the hospital’s financial problem is the decrease in patient population. The hospital cannot account for when and if people are going to be ill and require their services. A possible cause for decreased patient population could be the economy since people that normally have insurance are now without it if they have lost their job. They may put off going to the doctor now when before they could go anytime with their insurance. This also affects the level of service that needs to be provided. If a patient does not come in for preventative health management, then the resulting illness can be worse and harder to cure.
The main cause of the misunderstanding of the hospital’s procedures is the wording in their mission is ambiguous. It does state facts but also is open-ended in some of the statements. It can be read several different ways. The other factor is the opinion that their staff and doctors do not perform their duties by following the same set of rules and regulations. There are several employees who follow the rules by the book and others that bend them to meet their needs or their personal beliefs.
There are several things that Faith Community Hospital can do to generate enough revenue to continue its operations. It can try to negotiate fixed costs, cut costs where needed, reevaluate its current cost to customer, and investigate its competition to see if it can win patients to increase patient population. By focusing on these areas and making changes where needed, the hospital may be able to make enough profit to justify its existence.
The hospital can change its mission to be a tighter and cleaner statement as well as put in place stricter policies. They need to remove any ambiguity from their mission statement and have consequences for not following established rules. They need to reevaluate why they are in business and try to convey this in their mission in a way that will not be able to be misread. If they are able to train their staff and doctors on how they should represent the hospital and how to interpret the rules and regulations, they will be one step ahead.
VI. Alternative Impact
By reviewing their expenses, the hospital will be able to find the areas in which they need to make changes. By defining each area and looking for ways to save money, they will be able to justify their operations. Even though the hospital is not run to make a profit, they need to stay above their expenses in order to stay in business.
The hospital needs to monitor how their staff is representing the hospital with patients and partners. If they understood the reasoning for straying from the mission, they could determine if it was a case of miscommunication or if it was complete negligence. A full understanding of the areas that are being misrepresented would need to be viewed as well. Is the staff abandoning the rules for a reason they believe to be ethical or are they straying from the rules because it makes their job easier?
VII. Decision / Solution
The decision to cut expenses is not always an easy one. The impact on all areas needs to be clearly defined. Cutting costs in one area could result in additional costs somewhere else down the line. In the case of Faith Community Hospital, the only feasible way to cut costs is in the area of payroll and operational costs. Careful review of the hospital’s financial statements shows that they are over budget on payroll due to being overstaffed for the average patient population. They will need to make their departments leaner and this includes review of nursing functions as well as management and support functions. There will be an efficiency report created to deal with supplies and how to better manage them. This is an area that showed to be the biggest possibility on cost savings. There is horrendous waste that goes on and management will be able to keep a closer eye on supplies by creating a tighter control of them. Currently, supply closets are pretty much open and only checked and stocked once a month. The administrative assistants in each department are going to be responsible for maintaining a log to better aid in the tracking of office and operational supplies. With this restraint in place, the waste will decrease. If employees are aware that they are being monitored and there will only be a set amount of supplies per month or quarter, they will be able to stay under that maximum.
The decision to better train the hospital employees on the policies and procedures came after an investigation into how the hospital was being represented. The findings included staff providing additional services for patients at no additional cost, staff not verifying what services the patient was requesting, and the movement for staff to act on their own personal beliefs and code of ethics. The outcome of these investigations showed that employees were acting in a way they had interpreted the hospital’s mission to be. They read the mission to state they should do what is needed to provide compassionate care to the community. In their eyes, they were following the hospital’s mission when they provided certain services to patients. The employees who were not providing services to patients also read that into the mission. They believed they were helping the hospital as a whole and following their religious stand by allowing or not allowing certain services, such as Do Not Resuscitate (DNR) orders.
VIII. Decision Implementation / Rationale for Decision
Faith Community Hospital will undergo a staff reduction program. This has been reviewed by the Financial Analyst, who took into account which areas seemed to be consistently overstaffed. The new restraint on supplies includes a training session for administrative assistants so they see the value in the new system, secure storage areas for supplies, and tracking by employee of supplies used. This creates accountability per employee, which will aid in the success of the program. The Financial Analyst was also able to negotiate the cost on items from several vendors that are used exclusively. This was achieved with office supplies as well as operational supplies specific to the hospital and healthcare industry.