Healthcare Administration in Occupational Health, Case Study Example

Hours of operation. Are there too many/few? If so, how would you change them?

Looking at the number of visits and the reasons for the visits, the clinic is currently offering too many operating hours.  A majority of the clinical needs are taken care between the hours of 6 A.M. and 4 P.M.- I would change the main hours of the clinic from 6 A.M. to 4 P.M, with staff on-call as needed after that time period.

Staffing. Should staff be reorganized in order to gain maximum use? How?

Regarding staffing patterns, there needs to be a change concerning when and which staff comes in.  I would have the majority of the nursing staff and clinicians come in at 6 A. M. to get ready for the day and start to see patients.  In particular, I would put 2 RNs and 2 LPNs on from the 6-4 shift- this would eliminate the need for 1 RN and 4 LPNS over the day: This would save a total of roughly $120/ day not including benefits.  I would also try, where possible, to have the LPNs do a brunt of the administrative and stocking work to let the RNs see and deal with patients.  With the small number of visits coming after 12:30 P.M., I also question the need to have 2 more mid-professional doctors in at that time.  While I wouldn’t recommend them to be cut, it is certainly a possibility.  Finally, there is no reason with the EMTs located so close to the clinic that the clinic would need to have them “on-staff” after 7 P.M.

Capacity. Is unused or underused capacity an issue? If so, what ideas would you have?

Regarding the issue of capacity, the main problem is the unused space in the back of the clinic that it now pays for.  According to the manager’s comments, the clinic still pays for the square footage at a rate of $12/ square foot for roughly 1,500 square feet.  If this is billed on a monthly period, the expense would be roughly $18,000 per month that is essentially being wasted.  In order to deal with this unused capacity, Boeing could contemplate several alternatives including: 1) inviting the hospital back; 2) splitting the clinic into preventative and acute units that would be separate and billed separately.  Radiographic services, another issue potentially related to capacity, is addressed under the technology section.

Technology in the clinic. Is it used appropriately? What would you differently?

Technology, used in an appropriate manner, can greatly enhance clinical outcomes (Cleverly & Cameron, 2006). The Boeing clinic, however, seems to be using excess amounts of capital and labor.

There are two main uses of technology in the clinic: 1) Radiology; 2) Computers.  With the number of injuries related to manufacturing work, there should arguably be a radiologic presence at the clinic.  There is no need, however, to have two x-ray techs on during the same time: Depending on the number of individuals that work during the day or at night, the clinic should just employ one x-ray tech from 8-4 and the other from 4-12 to read x-rays.  It is likely appropriate not to have more advanced machinery such as a MRI or CT in the clinic; such use should be saved for hospital visits. The managers should also make an effort to understand the indirect costs associated with undertaking x-rays.  If the costs prove to be too prohibitive, the x-ray function may need to be outsourced.

The use of computer technology can also be enhanced to eliminate excess labor: The implementation of electronic records will likely make the three record individuals redundant.  At the same time, the clinic has nearly 30 computers that could be used more effectively to eliminate labor costs.  Overall, technology can be used more to make the clinic more efficient.

Cost saving and consumption. How do you determine where the costs and consumers of the costs are credited? In other words, how would RVU’s be used to determine real costs?

The main problem regarding labor costs is that they are not effectively tethered to the clinician’s and supporting staff’s time.  That is, each employee is paid a flat per hour fee; the per-hour fee, however, is not connected to the quantity and quality of care being provided.  This disconnect explains why there are an excess number of clinicians, x-ray technicians, and overnight nurses that do not ultimately provide care.

The clinic could introduce revenue units (RVUs) in order to deal with this problem.  RVUs is essentially a classification system based on two different factors: 1) The physician’s expense measured in the amount of time needed to prepare, meet the patient, and finish related paperwork; 2) The practice expense measured in the resources used for diagnostic purposes (tests) as well as related labor expenses for nurses and technicians.

One of the main problems with the hospital is the bloated budget baseline that is preventing more effective allocation of resources where they are needed.   For this reason, the clinic should not revert to incremental budgeting in this case: this is because the existing budget baseline is clearly too high promoting under utilization of existing resources.  If the clinic were to keep the existing baseline, and only approve changes proposed by the department, it is doubtful the clinic could be turned around.

Instead, the clinic should introduce zero-based budgeting as a means to allocate resources starting immediately. This new change would mean that each department would effectively start from a budget baseline from zero and then give a list of requests that would then form the annual budget request.  This type of budgeting should last for at least five years until the clinic can turn around the current situation.  Once the manager is convinced that significant progress has been made, the clinic could then (re) implement incremental based budgeting off the more sustainable baseline.

Leadership. What are some recommendations and styles you would use to lead through change?

I think there are several points regarding how leadership should be reformed in the clinic.  The first suggestion is to fire the current clinic manager.  From the comments given to the consultant, one can easily surmise that the current manager is not effectively running the clinic, and to a certain extent, has turned it into a personal fiefdom for giving jobs to personal acquaintances.  The clinical manager should be fired immediately, and an interim manager could be named until a final replacement can be found.

The second, and more complex problem, concerns the position of clinical leadership.  The clinic currently employs one individual to oversee clinical care and quality.  This position is of obvious importance, and should not be cut- at least, unless a further review shows that a better structure is possible.  The problem emerges in how care is administered: The clinical director should not be focused on meeting patients, but should focus on making care more efficiently delivered.  Possible ideas, based on the clinic’s current situation, would be to have nurses take on a more prominent role in offering care rather than having numerous mid-level practitioners.  Third, the clinic might also want to hire an executive who is over the clinical and business manager, over the short-term, to make sure critical reforms are implemented.

What kind of financial strategy would you recommend to Boeing?

Over the short term, Boeing should move to reduce the underutilization and inefficiencies involved with operating the clinic.  The main problem with the clinic is escalating costs without a clear understanding of the health outcomes achieved in the clinic (Gapenski, 2009).  With this framework in mind, substantial funding cuts should be made in order to pare down the size of the clinic that has clearly become too large.  The cuts should not be made ad hoc simply based on saving money, but should made after systems (such as RVUs) and other quality improvement measurement efforts to made to understand the clinical outcomes.  This should be the main goal over the short-term.

What other issues do you see as important to address as the clinic manager?

Over the long-term, Boeing needs to reposition the clinic as part of a larger corporate strategy in providing health care for employees (Gapenski, 2009).  In its current form, the clinic offers hybrid services related  to preventative and acute care- with most of the (bloated) resources dedicated to acute care.  It makes sense for a production plant to offer acute clinical services, particularly to workers who experience a work accident or who have an immediate clinical need.  Current resources dedicated to long-term or chronic injuries (particularly in the use of x-ray services) could be cut however and outsourced to the basic health plan offered to workers. Overall, the strategic mission of the clinic needs to be recalibrated in order to make sure duplicate services are not offered in the health plan and on campus.  This may result in a substantial shrinking of the current office and its mandate vis-à-vis workers.

References

Cleverly, W.O. & Cameron A.E. (2006).  Health Care Finance.  Boston: Jones and Bartlett.

Gapenski, L. (2008). Healthcare Finance: An introduction to accounting and financial management. Washingon, D.C.  Health Administration Press.