Discuss the following question: What would you recommend that David do, aside from beginning to look for another position? Each student must comment on at least 1 or 2 other student's posts.
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Several of UTHS's hospital have been in existence for more than 100 years. Many of the system's facilities are dated, and the system has very modest amounts of philanthropy, endowments, and research. Further, the metropolitan market served by UTHS is large and overbedded. Recruitment of physicians who have large practices and regional / national reputations could help UTHS bring new business to the system, but competition for such physicians is fierce. Overall physician compensation within UTHS's market has been bid up above national averages, even when factoring in the local cost-of-living differential.
A New Vice President for Ambulatory Care
A new corporate vice president (VP) for ambulatory care has recently been recruited to help develop and implement strategies to expand the ambulatory care service line for the system. At this time, inpatient services represent approximately 75% of UTHS's operating revenues, and outpatient services represent the remaining 25%. In contrast, the national averages are hovering around 55/45 for the inpatient / outpatient revenue mix.
Each of the UTHS hospitals has vice presidents for ambulatory care who would report to the new corporate VP on the dotted line, with their primary reporting relationship remaining with the local hospital's chief operating officer (COO) or president. The new corporate VP would directly report to UTHS's COO and also have a dotted-line reporting relationship to the local hospital presidents and chief operating officers. This structure is commonly referred to as a matrix relationship.
David Harris, who has spent his entire career successfully managing ambulatory care services and physician practices, has been offered the position. During his recruitment, he had been told by UTHS's COO that all of ambulatory care would be removed from the authority of the local hospitals and placed into an enterprise under his responsibility. Although skeptical about the strategy, David did not voice any negative opinions about it during the recruitment process. The COO at CTHS had a reputation for getting what he wanted, and David did not see any upside in trying to change the COO's mind during the interview process.
After reviewing the UTHS financials prior to accepting the position, however, David was convinced that he would have limited capital to work with in attempting to develop a larger ambulatory care footprint. Lacking a strong balance sheet, and further limited by slim profit margins and a small amount of endowment, David knew capital resources would be scarce. His experience in other major healthcare systems suggested that, when push came to shove, ambulatory care was always last in line after all of the inpatient needs were funded. However, he had enjoyed maneuvering on this very narrow tightrope in his past positions, so these concerns did not scare him away from accepting the offer.
Clarifying the Challenge Ahead
Once David came on board, he decided to spend the first 8 to 12 weeks visiting all of the hospitals and ambulatory care facilities and meeting with the hospitals' senior management, including the vice presidents from ambulatory care who would have a dotted-line reporting relationships to him. During these visits, David immediately found that, although many of the senior managers were warm and friendly, none of them were particularly interested in giving up responsibility for any of their ambulatory care enterprise, in spite of the edict of the UTHS's COO. In some cases, managers directed overt hostility at David. At one hospital, the local vice president for ambulatory care refused to share any financial or operating performance information with David, under instructions from her hospital's president. In another hospital, the local vice president for ambulatory care refused to meet with David at all.
After visiting all the ambulatory care services throughout UTHS, David summarized what he had found: 1. Most of the facilities and services has been underfunded and undermanaged for years. 2. Meaningful financial and statistical information did not exist.
- A direct ratio seemed to exist between the distance from the main campus and the managerial interest in the various ambulatory care service assets, especially the physician practices.
- No one was evaluating the overall performance of the ambulatory care services, and because no ambulatory care strategy had been delineated, the services lacked data with which to benchmark performance or the appropriateness of each asset.