ThedaCare System Strategy - Case Study Example

Q1. ThedaCare, a health care system having four hospitals based in Appleton, Wiscon has been in operation since 1987. The health care system has pursued an aggressive system strategy since its formation to become a market leader in the competitive health care delivery industry (Porter and Jain 1). The aggressive approach to doing business led to the current CEO Dr. Toussaint to develop a strategy that would ensure that the health care system gets ahead of its competitors. The overall strategy pursed by Dr. Toussaint like his predecessor was to ensure that ThedaCare becomes the market leader in the industry both in terms of market share and by offering the best quality of care to its patients (Porter and Jain 5). To ensure that the organization achieved this goal, ThedaCare developed the Idealized Design of Clinical Office Practices (IDCOP) model to ensure that the organizations enhances its customer service and ensure profitability in primary care (Porter and Jain 8). The IDCOP model is based on use of changeable staffing and maintaining a flat number of appointments open for each day patients’ visits. The implementation of this initiative although in a pilot study basis, caused an increase in customer and staff satisfaction and a rise in the net revenue rose (Porter and Jain 8). However, ThedaCare Physicians offices were hesitant to adopt this initiative as they felt that it could lead to a decline in their revenue. The other element in the strategy of Toussaint was the adoption of “lean thinking” and therefore the organisation pursed continuous quality improvement. The other element implemented to ensure enhanced quality and increased profitability was the implementation of the ThedaCare Inpatient System (TIS). TIS was developed to ensure enhanced staff morale, improved productivity and enhanced quality by cutting down on waiting time (Porter and Jain 9). TIS had various components all drawn from the principles of Toyota Production systems which include value, value stream, flow, pull and perfection. The first element of the system value involves identification waste and doing away with such waste. ThedaCare engaged its senior employees in a five days initiative where they assessed its present approaches and proposition of new approaches to enhance quality. The second element of the system was the value stream mapping where the activities of the organization were assessed and the way they could be reduced to ensure cost saving and improved quality (Porter and Jain 9). The other proposal that would see the organization achieve its overall strategy was concentrating in offering services that it could best offer (Porter and Jain 10). This proposal met mixed reactions with the board members supporting it while the staff was opposed. This was for instance seen when there was an attempt to close the pediatric services. The other approach to ensure improvement in quality health care as proposed by Toussaint was to develop metrics in collaboration with other service providers to measure quality. Toussaint argued that by having the organization identify its weak points, it could work on them and improve its service provision. To this end, Wisconsin Collaborative for HealthCare Quality (WCHQ) and Wisconsin Health Information Organizations were established (Porter and Jain 12). ThedaCare under the leadership of Toussaint also resigned its processes to care where patients with known disease would have all the necessary laboratory tests ordered upon arrival and results from this would be used in provision of care from a single office. This approach was expected to enhance follow-up with patients, cut-down on the number of visits and enhance medical results. Q2. In general, the process implemented by ThedaCare in the evolution of process improvement is improving with time. This is supported by the fact that in the process improvement initiatives adopted, the organization has enhanced the involvement of the stakeholders (Swayne, Duncan, and Ginter 184). In contrast to the approach adopted during the formation of a merger where the physicians were not involved, in the current process improvement initiatives, most stakeholders are involved. In addition, the health care system is relying on pilot studies to assess the effects of every initiative before it can be rolled out which ensures that negative effects can be minimized. For any process improvement to succeed, it is critical to ensure that it is there are metrics to track its progress (Swayne, Duncan, and Ginter 189). To ensure that this is achieved, the organization has been developing strategies to ensure that it monitors its progress. The other indicator of the improvement of the process improvement is that the organization has been moving in conformance to the changes in the industry. For instance, after HMOs stopped being favored as an indicator of quality in 1998, ThedaCare shifted to reliance on PPOs which was being favored at that time (Porter and Jain 12). This is an indicator that the organisation maintains flexibility in its processes as the business environment is usually dynamic. Q3. Orthopedics Plus formed in 2005 was developed following an attempt by a group of independent orthopedic practices performing surgery at Appleton Medical Center to form their private ambulatory surgical center which would ensure that they get the income that was being previously paid out to the center (Porter and Jain 11). Consequently, such a move would lead to ThedaCare losing $12 million in annual revenue. In addition, Dr. Toussaint pointed out that 50 percent of the facility’s profitability was being supported by outpatient surgery and therefore it had to develop a way to work with surgeons. Orthopedics Plus was different from all other improvements efforts pursed by ThedaCare in that the management did not impose any informal or formal requirements for service providers to adopt it. To evaluate the new unit, ThedaCare would consider the number of referrals to the unit. The facility would also use the revenue generated from the new unit to evaluate it. The other way for evaluating the new unit is to assess customer and staff satisfaction levels (Porter and Jain 11). Higher levels of staff and customer satisfaction indicate the new system is effective in quality improvement. Q4. Toussaint took a leadership role in the two statewide information initiatives to ensure that such initiatives have the support of the senior management which increases chances of their success. Another reason for Toussaint involvement in the leadership role was to guide the process by ensuring that he is able to mobilize the required resources for such an initiative. Toussaint also had a vast experience in the implementation of similar initiatives and therefore his participation would ensure that he influences the team to success. Q5. Despite the implementation of care redesigns and TIS which saw ThedaCare enhance the quality of services offered to customers, the facility was still experiencing the challenge of having the innovations embraced throughout the organization (Porter and Jain 10). This was evidenced by the fact that the organization had benefited from better reimbursement from commercial payors. Additionally, ThedaCare facilities had not been able to attract more customers. Q6. To address the challenges that ThedaCare was facing in 2007, the organizations should form a strong collaboration with commercial payors and persuade them to have their patients reimbursed. The other recommendation this challenge is enhancing transparency in claims and benefits to ensure that payors have trust in its systems. ThedaCare should also pursue the integration of all its systems as this will enhance coordination and increase transparency. Like its competitors, ThedaCare should be aggressive in bargaining for its patients from the side of payors. ThedaCare can also deal with its current of low bargaining power on the side of commercial payors by adopting different payment models. As noted by Swayne, Duncan, and Ginter, ThedaCare must be able to provide all the information required by the payors (431). Another way of dealing with the current challenges is to enhance the quality of services offered. Porter and Jain explain that by offering exceptional services, the health care system will attract more customers compared to its competitors (10). Another recommended strategy for enhancing the number of customers ThedaCare serves is adoption of aggressive marketing campaigns. In the advertisements, the organizations should focus on all the new improvements it has adopted. Q7. The introduction of information technology has affected the operation of ThedaCare both positively and negatively. The introduction of an information technology platform allows the company to store medical data for its patients. In addition, the introduction of an information technology platform changed the way ThedaCare registers its customers making it effective. ThedaCare information technology system also became an effective tool for scheduling patients’ visits making scheduling fast and accurate. The other way that the introduction of the information technology changed the way ThedaCare conducts its activities positively is by helping in managing of the billing of its customers. ThedaCare also used information technology to increase the interface between it and customers where could access information of their health conditions, their charts, schedule visits and requests for medications (Porter and Jain 13). This indicates that the introduction of information technology in its operation ensured that the organization could serve it patients efficiently, fast and effectively. Information technology also enhanced flexibility in provision of care as the patient could communicate with physicians through emails or reschedule the visits without having to go to the facility (Swayne, Duncan, and Ginter 459). Despite the positive gains enumerated above as emanating from the introduction of information technology, this initiative caused resistance from most physicians that are not familiar with computers (Porter and Jain 13). The physicians also argued that introduction of information technology in its operations resulted in cumbersome work. The doctors had to enter data on the patients who meant more work on their side (Porter and Jain 14). Q8. During the creation of ThedaCare in 1987 by merging two rival hospitals; Appleton Medical Center and Theda Clark Memorial hospital, the physicians were not involved. As a result of lack of involvement in the merger process, the physicians continued to consider themselves as competitors. Given that in provision of health care services and the rationale behind the merger was to ensure that the ThedaCare would form a strong team, the continued consideration of physicians as competitors meant that the hospital would not reap the intended benefits. This is because such physicians find it hard to work together for the benefit of the patients and the organization. Particularly, lack of engagement of the physicians in the merger process meant that the workforce became disintegrated and in such an environment, conflicts are common and team work is often lacking. In addition, managing of a competing team is usually difficult. Q9. After the merger, ThedaCare continued to offer the same service lines as those offered by the initial organizations. In addition, the organization was operating a low number of patients leading to losses. Particularly, in the pediatric division, ThedaCare was making annual losses of $ 300,000 (Porter and Jain 12). However, in 2003 Toussaint asserted that the organization would only offer services in areas where it can offer the best services to its customers. To achieve this and become better a health care system, the organization began redistributing its services based on the capabilities of its sites. The cardiac surgical services were to be handled in Appleton Medical Center while ThedaCare offered services to patients requiring trauma, neurological surgery and neurology. The other initiative that led to ThedaCare becoming a better health care system is that the management took time to evaluate the functioning of its systems and enhancing the systems which have high benefits to the organization. For instance, in 2007, ThedaCare noted that by using shared services in children’s hospital to provide pediatric care was reducing losses incurred, it considered developing such a facility. Despite the efforts of redistributing operations and concentrating on specific service line, there were several barriers. The physicians felt that by taking some operations from their current site would mean that the physicians would have to change their area of operation and some might end up preferring to work for competitor facilities (Porter and Jain 9). The other barrier to the proposed changes was that some patients would be forced to travel for longer distances given that the two hospitals were 20-minute drive apart. The other barrier that ThedaCare met in becoming a better health care system is that it could not do away with offering some services as they such a move would mean reduced number of customers. Q10. The introduction of Orthopedics Plus in the organization had a great positive impact to the organization. The unit helped to unite all the processes that take place when offering care to patients and ensuring that such services are all offered under the same roof (Porter and Jain 13). Once a patient got the hospital, he was assessed by a multi-skilled team of physicians where in case it was felt that a physical therapist was required; such a person would be called upon immediately. Moreover, the introduction of Orthopedics Plus reduced the movement of the patients as they receive care which enhanced. This is critical in such a setting given that most of the clients have mobility problems. The other impact of the introduction of Orthopedic Plus is that a majority of referrals which were previously made to affiliated orthopedics groups were directed to the unit. The higher number of referrals resulted from positive reviews on the center made by the patients. Orthopedic Plus also led to reduction in time taken in provision of care from a high of fourteen weeks to 31 hours. Orthopedics also resulted in high customer and staff satisfaction. This meant that the patients were receiving higher quality service. To implement the new unit, the staff led to higher collaboration as they had to work together thereby enhancing the working relations. Q11. In terms of the number of beds, ThedaCare is a market leader beating its competitors Affinity and Aurora. In 2006, ThedaCare had 372 staffed beds, compared to Affinity which had 361 staffed beds. Aurora had 71 staffed beds (Porter and Jain 20). When it comes to admissions, ThedaCare made 18,422 admissions as Affinity made 14265 admissions coming second and Aurora was last with 3221 admissions. When it came to the occupied beds, ThedaCare topped with 192, Affinity had 169 beds while Aurora came third with 31. The number of outpatients visits at ThedaCare was also highest standing at 261301, Affinity had 225058 outpatient visits as Aurora received 57, 360 visits (Porter and Jain 20). Furthermore, ThedaCare topped when it came to the number of births happening in its facilities with 2617, Affinity had 1961 as Aurora had 646. In terms of total expenses, ThedaCare led with $257, 534, 000 as Affinity spent 201292,000 and Aurora was last at 58,589,000. From all statistics collected in 2006, it is clear that ThedaCare was the market leader followed by Affinity. Aurora came a distant third looking at all the parameters assessed (Porter and Jain 20). Q12. In spite of the current process improvements, ThedaCare should implement several recommendations to ensure that it continues to provide quality services to its patients. One of the recommended initiatives that organization should implement in the future is forming a department charged with technological improvements (Commonwealth Fund 1). The technology implemented should be flexible giving more interaction between the patients and caregivers. The other recommended action for the future is to have a home-based care unit where the hospital will offer exclusive care to its patients from the comfort of their homes. Additionally, the hospital should seek to involve the family in the treatment of the patients. Another recommendation that ThedaCare should pursue is to have a more culturally-diverse workforce given that there is an increase in the number of immigrants into the region. Works Cited Commonwealth Fund. "Strategy for improving health care for uninsured, low-income, and minorities in the US." Science Daily, 7 Oct. 2011. Web. 3 Sep. 2012. Porter, Michael and Jain, Sachin. “ThedaCare: System Strategy.” Havard Business School January, 27th, 2010. Web. 3 Sep. 2012. Swayne, Linda E, W J. Duncan, and Peter M. Ginter. Strategic Management of Health Care Organizations. San Francisco, CA: Jossey-Bass, 2008. Internet resource. Read More