Case Study - Doctor's Hospital's Organizational Change

Doctor's Hospital was facing a serious financial hardship as healthcare costs continued to spiral out of control and reimbursement plummeted. A new chief executive officer (CEO) was hired to turn things around in an effort to salvage the hospital. The CEO was determined to change the company culture, which he identified as apathetic and accustomed to mediocrity. He noted that the financial performance was suffering and attributed much of this to a variety of process issues as well as a lack of focus on the core business of patient care.

The CEO immediately took action to look at financial issues and cut costs. A drastic cost and labor reduction strategy was implemented with an aggressive timeline to turn the financial bottom line around. Within a few months, the hospital started to show less of a financial loss and things seemed to stabilize financially. However, the morale of the staff had taken a significant hit. Turnover increased as a sense of job security decreased, and the impact on the patients began to be seen in an increase in patient complaints and lowered patient satisfaction scores. A training program was introduced to remind employees about customer service with no impact on results. Finally, the CEO hired a consultant who performed an assessment. A multilevel program was implemented that incorporated all levels and all aspects of the business. This assisted leaders in understanding the link between finances, employee morale, and patient satisfaction. A culture of accountability began to emerge and began to shift the culture to one of service after two years. Finally, all business metrics began to move in the same direction.

Questions

1. What were the key components of changing the organizational culture?

2. Why wasn't the training effective?

3. Why do you think a culture change was necessary?

4. What steps do you think the consultant recommended in order to effect this change?

(Borkowski 359-360) - Borkowski, Nancy. Organizational Behavior in Health Care, 2nd Edition. Jones & Bartlett Learning, 2011. VitalBook file.