Discussion: Moderate-sized Hospital System

Discussion: Moderate-sized Hospital System

Discussion: Moderate-sized Hospital System

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The CEO of St. Sebastian Health System, a moderate-sized hospital system in a mid-sized, Midwest city has hired you to help turn things around. The CFO is projecting a $3.7 million operating loss this year, which will be more than offset by non-operating income. However, the board has made it clear that the situation must improve. If the system cannot produce a positive operating margin in 2017, someone else is going to be the CEO. The CEO and CFO have asked you to recommend strategic approaches to selling their services in the community that will help turn the financial ship around. Your Health System St. Sebastian is a community-based health system. The senior management team has an average tenure of 17 years. The exception is the Chief Medical Officer (CMO). She has been in her position for two years and is the fourth CMO in that role in the past ten years. The CEO and COO have each been in their current roles for ten years. The system is comprised of the following: 1. Two large, acute care hospitals 2. Two long term care facilities 3. Two skilled nursing facilities 4. One long-term acute-care hospital (LTAC) 5. Four geographically distributed outpatient centers 6. Four Urgent Care Centers 7. Two free-standing ambulatory surgery centers (ASCs) 8. A 400 member employed physician group that includes 180 Primary Care Providers (PCPs). All 28 PCP practices are certified Level III Patient Centered Medical Homes by NCQA. The remainder of the 1,000 member medical staff is generally comprised of large, independent groups who have varying degrees of ‘loyalty’ to the system. The Radiology and Emergency groups, for example do 100% of their work at St. Sebastian and have no ownership of any outside facilities. The Gastroenterology group, on the other hand, does work at the hospital, but also owns their own, freestanding endoscopy center. The orthopedic group does 75% of their work at St. Sebastian, but maintains privileges at other facilities. They
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Case Study – Background Reading – Strategic Management – Banks The CEO of St. Sebastian Health System, a moderate-sized hospital system in a mid-sized, Midwest city has hired you to help turn things around. The CFO is projecting a $3.7 million operating loss this year, which will be more than offset by non-operating income. However, the board has made it clear that the situation must improve. If the system cannot produce a positive operating margin in 2017, someone else is going to be the CEO. The CEO and CFO have asked you to recommend strategic approaches to selling their services in the community that will help turn the financial ship around. Your Health System St. Sebastian is a community-based health system. The senior management team has an average tenure of 17 years. The exception is the Chief Medical Officer (CMO). She has been in her position for two years and is the fourth CMO in that role in the past ten years. The CEO and COO have each been in their current roles for ten years. The system is comprised of the following: 1. Two large, acute care hospitals 2. Two long term care facilities 3. Two skilled nursing facilities 4. One long-term acute-care hospital (LTAC) 5. Four geographically distributed outpatient centers 6. Four Urgent Care Centers 7. Two free-standing ambulatory surgery centers (ASCs) 8. A 400 member employed physician group that includes 180 Primary Care Providers (PCPs). All 28 PCP practices are certified Level III Patient Centered Medical Homes by NCQA. The remainder of the 1,000 member medical staff is generally comprised of large, independent groups who have varying degrees of ‘loyalty’ to the system. The Radiology and Emergency groups, for example do 100% of their work at St. Sebastian and have no ownership of any outside facilities. The Gastroenterology group, on the other hand, does work at the hospital, but also owns their own, freestanding endoscopy center. The orthopedic group does 75% of their work at…

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