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    Operating Service Delivery Problems for Margaret Harrison

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    Memo - Based on the two attachments forecast how to fix the problems.

    Now that you have developed some key points that will be summarized in a memo recommending service level improvements, identify the impact to the organization for each of the solutions if Margaret Harrison chooses not to implement the recommendations. 

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    To: Margaret Harrison

    I. System-wide Assessment & Assumptions

    The medical center currently occupies 20000 sq. ft and employs 10 physicians, 2 pharmacists, 20 nurses and 4 administrative personnel. The organization operates on a 3 shift basis, 24 hours per day and offers both general medical and minor outpatient surgery services which accounts for 75% of the overall business. The average gross revenues for the facility are $1.6M with an estimated net revenue base of $804568. This assumption is based upon a total tax base of 40% ($640000) and the cumulative monthly operation costs ($155432). Based upon a 25% profit margin of $201142/month, the physicians and pharmacists are paid the remaining amount of $603426 in evenly distributed percentages equating to $50285/month/individual (8.3%). Recent history of the medical center showed a regular patient base of 600 patients and an average of 1000 walk-in patients per month.

    Over the past few years, several similar clinics have entered the market offering relatively the same services and have established a competitive presence based upon cost, efficiency, quality of service. The result of this has been a decrease in the patient load to approximately 450 regular patients (a 25% decrease) and 800 walk-ins (20% decrease) for a total decline in patient load of 22%. Some of the reasons identified for the sharp decline in patient load can be attributed to growing waiting times, poor medical treatment, rising costs, facility comfort and cleanliness, friendliness and availability of staff and the increasing occurrence of lost medical records. These conditions have all been identified directly from patient surveys and specific complaints. Unless these issues are individually addressed and a strategy is developed to create a 'turn-around' process (retrenchment), the losses will continue to grow resulting in severely decreased revenues and total business failure within 5 years.

    II. Operations Strategy and Impact

    The strategies involved in addressing each of the deficient areas of patient services are driven by a combination of tasks, business philosophies and available technologies. In addition, they fall under three separate strategy categories: Directional, Competitive and Adaptive. The issue of extreme waiting times (up to 50 minutes) can be addressed by several different solutions or any combination of these solutions. First, a root cause analysis should be performed to determine if the primary reason patient waiting times have increased and are continuing to grow. On several accounts it is an issue of poor staff productivity and resource utilization. Management needs to determine what, if any, tasks are being duplicated by personnel, the efficiency of current scheduling procedures, if personnel are being under utilized in any area, if certain staff is being utilized beyond a realistic capability and if equipment or supplies are available and are being properly distributed. Borrowing from the 6 Sigma philosophy of DMAIC (Define, Measure, Analyze, Improve and Control) the workflow of each section should be reworked to optimize the efficiency of the processes involved. When redundancy or poor utilization of resources is identified, measures are put into place to rectify the condition creating improved patient flow and staff workload management. In addition to the application of DMAIC principles, advanced technology should be employed to minimize duplicate work such as registering patients each time they utilize the medical center, obtaining the history and physical information from the patients and the course of treatment notes. All these tasks are easily accomplished through the utilization of computers tied into an Electronic ...

    Solution Summary

    This solution provides a forecast on how to fix the problems for Margaret Harrison.