Optimal Allocation of Organizational Resources in Healthcare - Report Example

Optimal Allocation of Organizational Resources in Healthcare Optimal Allocation of Organizational Resources in Healthcare Put here University Name There is a constant tussle between the provider knowledge, capability and competence and use of technology in delivering highest level of healthcare services. This is a fact. Combining it with the modern day competition, consumerism and litigation adds multi-dimensional aspects to provider based healthcare services. More advanced and refined diagnostic facilities are almost competing with provider knowledge and long term training and experience in this arena. 1. Opportunity Statement Adding Technology to the best orthopedic service – your most trusted orthopedic clinic now has the cutting edge MRI to give you the best possible care. 2. Vision in turning the challenge into an opportunity The vision is to capture 50% of the local MRI based orthopedic services in a span of two years. The following are some important aspects when creating a vision. MRI means Magnetic Resonance Imaging. This technology was started being used since the early 1980s. This technology makes use of radio waves and magnetic waves. MRI doesn’t have any kind of exposure to either X-rays or any other form of radiation. The MRI scanner works in the following way. A patient who is intended to undergo an MRI scan is made to lie down inside a large cylinder-shaped magnet after which radio waves that are 10000 - 30000 stronger than magnetic field of the earth are sent through the body of the patient. Our body consists mainly of water, and water contains hydrogen atoms. For this reason, the nucleus of the hydrogen atom is often used to create an MRI scan. Firstly competition is increasing. In order to face such a huge competition, the firm needs to have high quality customer service. Market size is also increasing which means opportunity size is increasing. Low cost MRIs also mean low resolution MRIs which translates to increase in chances of error in diagnosis and treatment. Whereas when it comes to high resolution MRI with an established brand of orthopedic service, it will obviously translate to higher number of patients to be treated veining them away from low cost competition. In order to capture the proposed market of 50%, the firm can tie-up with different employers and offer them esteemed customer status. In such a situation, if the employer refers his employees in case of any diagnostic need for a high resolution MRI, then the employee has chances of recovering soon and thereby the non-productivity for the employer would be very low. If the employer refers his employee to a low resolution MRI which is cheaper when compared to the former one, then there are chances that the employee may not recover soon and hence the non-productivity levels may tend to be high. Discount will be given to such customers as an esteemed customer. Organizational structure may be defined as the framework of tasks, reporting and authority relationships within which an organization functions. According to Stephen P Robbins, “An organizational structure defines how job tasks are formally divided, grouped and coordinated.” There are six elements which are believed to be the building blocks for designing and organizational structure. They are – Work Specialization – This refers to the degree to which tasks in an organization are divided into sub-tasks, each of which is performed by an individual employee. Departmentalization – This can be defined as the process in which jobs are grouped together to bring coordination among the organizational tasks. Chain of command – This is defined as the unbroken line of authority that extends from the topmost level to the lowest level of an organization and clarifies reporting relationship within the organization. Span of Control – Span of Control refers to the ratio of managers to immediate subordinates. The number of subordinates who are directly under the control of a manager differs from organization to organization. Centralization/Decentralization – Centralization refers to the concentration of power and authority at the top most level of the organization. Decentralization means delegation of authority and decision-making power to different levels of the organization. Formalization – Formalization can be defined as the degree to which rules and procedures govern the roles and responsibilities of employees. Organizational Structures – There are three most commonly used organizational designs. They are the simple structure, functional structure and matrix structure. Simple Structure – A firm with a simple organization structure has a wide span of control, few departments, centralized authority and a low degree of formalization. The management of organizations with a simple structure is easy as the number of levels in the hierarchy is very few, may be two to three. The decision making power in such organizations is vested in one person. Functional structure – These kind of organizations are split into self-contained units which are able to react to environmental changes as quickly as small companies, they are also described as multidivisional or M-form organizations. Divisions encourage team spirit and identification with a product or region. Managers can develop broad skills as they have control of all basic functions. Each division is likely to have a devolved human resource function. But there is a risk of duplicating activities between head office and divisional human resource departments and of conflict between staff in successful and unsuccessful divisions. The divisional function may play a coordinating role, reconciling decisions taken at the corporate and business unit levels. This results in a complex picture of people management. Matrix Structure – Matrix structure is a structure which combines the features of a project design with those of a functional one. It is popularly used in sectors characterized by a high degree of specialization along with emphasis on projects and other specific goals such as R&D organizations, consultancies, advertising agencies, hospitals, universities, etc. After going through all the above discussed organizational structures, it is proposed that a simple organization structure is good enough for the orthopedic clinic under study. 3. Since more numbers of employers are coming in, employment opportunity will obviously go up. So general population can afford higher cost of medical treatment or there will be an inclination towards sophisticated healthcare. This will also bring in more competition. Increase in the competition levels means that the firms need to increase the level of customer service, hygiene and other similar factors at the clinic. Also, the clinic is specialized in provider-based delivery. In order to succeed in such an approach, the initial step would be to create awareness among the public. So embarking on an aggressive personalized mass communication mechanism along with focused communication on benefits of high resolution MRI through employers so as to reach the focused target segment would be an advantage. But increasing competition in a restricted market size will only lead to market expansion in that limited market and probably even saturation where only the best will survive and the rest will wither away. 4. Human Resource Plans/Initiatives The clinic needs to hire one Qualified Radiologist and four technicians to provide 24x7 services. Radiologist will be on call during weekend for providing emergency services. Radiologist available on – call means though the radiologist is free to do whatever he wants to, but in case of an emergency he will be contacted on a pre-defined number usually a hand phone. If for some reason, getting a qualified radiologist and technicians is a problem, and then the ideal way of handling it would be to look at recruiting more number of regular radiologist and technicians. Training should be given to the radiologist and other technicians who are already on rolls. So during the purchase of the MRI it should be so negotiated that free training and half yearly refresher courses will be given to both radiologist and technicians. Ensure more numbers of persons are trained so that whenever a person slips he can be kept idle and the other employees could be put to work. This way, the employee who is kept idle would face an ignominy and would try to perform well from the next time along with trying to be ahead of others always. Also all the other employees would be motivated towards better performance. This way the human resources can be utilized in an optimal way. This performance drive would also result in better customer service along with better experience to the customers. 5. Projected Quarterly Cash Flow Statement: (next Page) Assumptions: 1. The cost of amortization is done only once a year. 2. Cost of interest is assumed to be 8%. 3. Rental space is assumed to remain the same all through the two years. 4. The employees – both the radiologist and the technicians are given an increment of 10% of the salary in year 2. 5. During year 2, the HR costs are assumed to go up by about 10% of the total salaries. The HR costs include administrative costs, training costs, increments etc. 6. Marketing costs are assumed to be 100000$ per year. 7. In the same way, Liaison costs are also assumed to be 100000$ per year. References 1. http://www.netdoctor.co.uk/health_advice/examinations/mriscan.htm 2. http://www.facs.org/ahp/pubs/whatsurg0402.pdf 3. http://www.hrmguide.net/hrm/chap4/ch4-links3.htm 4. Introduction to Organizational Behavior published by ICAI Center for Management Research in 2003. Ref. no. IOB – 112K3 04. Read More