• What were the problems that led to BIDMC getting in trouble? What could be a way out
There were both external and internal factors that led BIDMC to the position it found itself in. The external factors included the fact that the landscape within which hospitals were operating changed due to mergers within the industry which was thought to give the merged firms greater advantage in terms of bargaining power etc. Due to these industry mergers, BI felt that they should also merge and the fact that they did so quickly with a hospital with a widely varying culture played a significant part in the issues at hand. It was not only the fact that these hospitals merged that caused a problem but ...view middle of the document...
Lastly another internal factor that led to the situation is the fact that decisions were taken but were not executed, which meant that there were turnaround efforts being made, but there was no implementation of the decisions being carried out.
Some ways out of the present situation could be (1) careful selection of the patient demographic to be treated to ensure profitability. This course of action would allow the hospital to focus on the quality of care being rendered and effectively reduce costs as the number of patients that are treated would be less, (2) de-integrate the clinical functions of the hospital and allow each unit to perform the functions in which it has the most expertize, (3) insurance contracts with more favorable reimbursements terms
• What are the main issues an aspiring new CEO would need to tackle?
Any recovery plan to be generated would need to ensure accountability and a focus on the improvement of the services being offered to patients, therefore an aspiring new CEO would have multiple issues to tackle. Some of the main issues however would be to :
(1) Manage cash to stem the tide of losses. This is important because as long as this aspect of the turnaround plan is successful, the plan will never succeed in the long run.
(2) Manage the expectation of external stakeholders. This critical to ensure that Shareholders have a clear picture of the resources that will be required to handle the task and the employees will know what is required during the process.
(3) Communicate through the organization the intended way forward. This will be required again to ensure that plans for the turnaround are transparent.
(4) Focus on the improvement of the quality of health care provided and deal with the cultural issues that may prevent this from happening
(5) Re-build trust among the different operating units of CareGroup in order for any turnaround plans to be implemented to work
(6) Determine whether to retain senior management
(7) Ensure implementation of any plans generated so that the previous state of inaction is not repeated.
• How would you describe the situation that Levy inherited at the BIDMC? What challenge did he face? Why did previous turnaround efforts fail?
The situation that Levy inherited was a complex one as there was an inherent issue of latency at the top levels of the organization which was observed by the fact that decisions were taken but not implemented. To compound this issue, the financial challenges experienced by BIDMC were mounting due to a plethora of internal and external forces. Ultimately it was observed that there was a failure in leadership and governance, as there was a lack of commitment on the part of leadership to provide quality health care, which is what the individual hospitals were recognized for before the merger. The situation that he was to inherit also included the lack of continuous improvement that was needed to implement quality patient care. This was critical...