Scenario Summary
You have been the CEO of Middlefield Hospital for 2 1/2 years and finally resolved the workforce challenges that plagued the hospital when you first arrived. In a recent meeting, the chief financial officer (CFO) indicated that the financial performance of the hospital has been deteriorating over the last 6 months. The hospital is not meeting its budget and he is concerned about the future. The new facility across town has continued to cut into Middlefield’s market share by admitting more patients. The number of admissions to Middlefield Hospital is declining each month, and more uninsured patients are seeking services at your facility. You convene the Middlefield Hospital management team and discover a few interesting facts, which are identified below.
1. The payer mix of Middlefield Hospital is comprised of more and more Medicare, Medicaid, and uninsured patients, and fewer patients have commercial insurance. This is reducing overall reimbursement and net income for the hospital.
2. The nearby hospital that competes with Middlefield has opened a wellness center that offers a comprehensive array of preventative and wellness services to the community. This facility is attracting young families to seek services at this location.
3. Most of Middlefield’s managed care contracts are more than 2 years old. There are little reliable utilization and reimbursement data available. No one at Middlefield Hospital is assigned to manage these contracts or maintain ongoing relationships with managed care companies.
4. The Joint Commission survey is scheduled for next year, and there are significant problems with the hospital’s quality improvement program.
5. The health plan offered to employees is getting more expensive each year. In fact, the costs are increasing at a rate of 20% each year. This is adding significantly to the hospital’s operational costs.
6. The inpatient mental health services and neo-natal intensive care unit continue to lose money for the hospital.
Your Role/Assignment
The board of directors has asked that you provide a 750-word report (double spaced in APA or other Devry-approved format) detailing your strategies and recommendations to improve the financial performance of the hospital. The strategies and recommendations should be as specific as possible and include identifying resources that are necessary to implement the strategies. Also, describe the outcomes expected from implementing your recommendations. Your primary text and journal/website research must be used as a reference to support your analysis. Use at least three references.
Available Resources
Review the points of view of the following people to obtain further insight on this assignment.
Key Players
Dr. McCrae – Psychiatrist
I am a psychiatrist and admit my patients to the mental health inpatient unit at Middlefield. It is the only psychiatric inpatient unit available in the community, and the care provided is excellent. I understand the program loses money, but the hospital has a community obligation to offer services to patients who need mental health care.
Aretha Holly – Pharmacy Technician
I love the health plan offered by Middlefield Hospital. The plan really meets the needs of my family. The copays and deductibles are so low and I get my prescriptions for free. Also, I can go to any provider I choose. I hope they don’t make any changes to the plan, because I am worried that I may not be able to afford it.
Barbara Seville – Director of Quality Improvement
Middlefield’s quality improvement activities are not effective anymore. We do lots of data collection and reporting, but there is little improvement in the quality of care. Most staff members believe that we already provide quality patient care and don’t see the why we are putting resources into this function. I think we are relying too much on our past reputation.
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