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    The Health Care Industry and Staffing Policies

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    Read Case 6, "The Health Care Industry" then answer questions 1-4.

    The Health Care Industry

    The health care industry has been going through major structural changes in order to become more efficient to help stem rising costs of health care. During the previous decade, health care organizations hired MBAs to help streamline their organizations, introduce new efficiencies, and market their services. In addition, many physicians are obtaining MBAs in order to help introduce better management into the health care industry. Health maintenance organizations (HMOs) continue to hold down costs by emphasizing prevention, by limiting access to specialists, by requiring co-payments to make patients more sensitive to the costs of health care, and through increased bargaining power resulting from their size. There also have been mergers among health care organizations and hospitals. Unfortunately, many health care organizations have encountered financial difficulties and some have failed. The federal government also has tried to hold down costs by limiting Medicare and Medicaid reimbursements.

    At the same time that the health care industry is struggling to become more efficient, the demand for health care is increasing and is expected o increase in the future because of an aging population, increased affluence, and advances in technology. By 2008, 7.2 percent of the US population will be 75 years or older. This compares with 5.2 percent in 1978. Actual employment levels in selected health care occupations in 1998 and projections for 2008 are as follows:

    Note! See the attachment Occupations

    1. Most people have some familiarity with hospitals and the health care industry. Based on your knowledge, in which quadrant of the staffing policies matrix (fortress, baseball team, club, and academy; the four distinct strategic staffing types four distinct strategic staffing types) do you think hospitals are located? Are the staffing policies of hospitals more like baseball teams, academies, clubs or fortresses? Explain our reasoning.

    2. Examine the projections for the various health care occupational specialties. Are there substantial differences in the rates at which employment is expected to grow in the different occupations? How have the strategic actions by health care organizations, such as mergers, shifts to preventative approaches, and the focus on cost control, affected the expected growth of the different specialties? How is the market demand for medical care expected to affect employment in the different specialties?

    3. Given the uncertainty of the demand for health care workers, how can health care organizations be prepared to meet their future needs for such employees? How can they help their employees prepare for their employment futures?

    4. Do Porter's competitive strategies of cost leadership, differentiation, and niche or focus apply to hospitals or health care organizations? Explain.

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    Attachments

    Solution Preview

    Please see response attached, including one relevant article as well. I hope this helps and take care.

    RESPONSE:

    1. Most people have some familiarity with hospitals and the health care industry. Based on your knowledge, in which quadrant of the staffing policies matrix (fortress, baseball team, club, and academy; the four distinct strategic staffing types four distinct strategic staffing types) do you think hospitals are located? Are the staffing policies of hospitals more like baseball teams, academies, clubs or fortresses? Explain our reasoning.

    The Promotions or External Recruitment The Promotion Decision Scenario is based on the career system framework of Sonnenfeld and Peiperl (1988). These are the Club (internal labor market group loyalty), Academy (internal labor, performance-based), Fortress (external labor market group loyalty), and Baseball Team (external labor market performance based) profiles. The most important criteria are the source of the promotion candidate (e.g. internal vs external), the performance criterion used to evaluate candidates for promotion (e.g. group service/loyalty vs individual performance), and age. The problem setting is the creation of a new post to help an overloaded manager handle increasing business (Table 2). The German sample stands nearly alone in its concern for promoting managers based on objective performance criteria. French managers are at the other extreme in basing promotion criteria on seniority or group loyalty (http://66.102.7.104/search?q=cache:oyfqc43DsR8J:studies.hec.fr/object/SEC/file/A/STPNAAHHBCRKVXKKJLZYBNDAQTRGAGCQ/Making%2520cross-cultural%2520research%2520relevant%2520to%2520European%2520corporate%2520integration%2520-%2520old%2520problem%2520new%2520approach.pdf+staffing+policy+fortress,+baseball+team,+club,+and+academy&hl=en).

    Hospitals are probably located as Academy with staff being promoted by seniority and performance based criteria.

    2. Examine the projections for the various health care occupational specialties. Are there substantial differences in the rates at which employment is expected to grow in the different occupations? How have the strategic actions by health care organizations, such as mergers, shifts to preventative approaches, and the focus on cost control, affected the expected growth of the different specialties?

    I examined the projections and to determine whether there was a substantial difference in the rates at which employment is expected to grow, I calculated the percentages in the above chart (divide 1998 figure/2008figure ? highest growth rates highlighted in red). Obviously, there are differences in the observed growth rates across occupational specialties. For example, notice that the top two are optometrists and dentists, followed by clinical lab technicians, licensed practical nurses and physicians. The two with the least growth are dental hygienists and physicians Assistants.

    The strategic actions obviously are expected to affect the expected growth of different specialties as predicted above i.e., lower expected rate for dental hygienists and physicians assistance could be due to mergers and cost cuts.

    How is the market demand for medical care expected to affect employment in the different specialties?

    This is reflected in the chart above. For example, as market demand changes (i.e., aging population, etc.) along with the cost drivers (i.e., next generation of technology promises to reduce cost), employment will be affected (i.e., move care to ambulatory settings will increase employment in this specialty) and improve outcomes.

    EXAMPLE: Trained Physicians

    The characteristics of today's workforce of fully trained physicians represent the cumulative decisions of many previous cohorts of medical residents. The future composition of the workforce depends on the makeup of the pool of physicians who are already trained and on the decisions made by current medical residents and future cohorts of residents about the specialties they will pursue. The workforce is also shaped by the characteristics of immigrating physicians.
    The Mix of Physicians in Primary Care Versus Non-Primary Care Specialties

    The relative balance of physicians in primary care specialties versus non-primary care fields continues to be an area of concern among health policymakers. Although no clear-cut definition of "primary care" exists, characteristics that tend to be associated with the concept of a primary care physician include being a point of first contact for a patient with the medical care system and providing routine examinations and vaccinations. Another distinction that people sometimes make is that primary care physicians are less oriented toward procedures (such as surgical interventions) than are non-primary care physicians. Yet another characteristic that is sometimes associated with primary care specialties is the breadth of patient problems that such physicians handle. Some people might argue that a primary care physician is one who engages in a broad range of activities, whereas a non-primary care doctor is one who treats only a narrow range of illnesses.

    The above set of plausible characteristics for defining primary care is somewhat unsatisfactory because certain physicians will fit some of the attributes but not others. Nonetheless, a widely accepted view is that general practice, family practice, general internal medicine, and general pediatrics are primary care specialties; obstetrics and gynecology might also belong in the primary care category. (http://www.cbo.gov/showdoc.cfm?index=17&sequence=2&from=0).

    EXAMPLE 2: Resident Physicians and Trained Physicians

    For example, besides the fact that resident physicians become the trained physicians of the future, another important link exists between the market for hospital residents and the market for the services of fully trained doctors. Namely, the incomes of trained physicians provide incentives to young doctors that affect the number of new physicians who choose to ...

    Solution Summary

    Referring to the Health Care Industry case, this solution explains in which quadrant of the staffing policies matrix hospitals are located (e.g. fortress, baseball team, club, and academy; the four distinct strategic staffing types four distinct strategic staffing types) and if the staffing policies of hospitals are more like baseball teams, academies, clubs or fortresses. A rationale is also provided. It then examines the projections for the various health care occupational specialties and whether or not there are substantial differences in the rates at which employment are expected to grow in the different occupations. It explains how the strategic actions by health care organizations, such as mergers, shifts to preventative approaches, and the focus on cost control, affected the expected growth of the different specialties and how the market demand for medical care is expected to affect employment in the different specialties. Given the uncertainty of the demand for health care workers, it then explains how health care organizations can be prepared to meet their future needs for such employees and how they can help their employees prepare for their employment futures. Whether or not Porter's competitive strategies of cost leadership, differentiation, and niche or focus apply to hospitals or health care organizations is fulled explored. Supplemented with a highly informative article on physicians and demand.

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