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Syracuse Essay 2

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Sunset Medical: Outsourcing Medical Professional Services

Introduction
Dr. Sally Jones, a practicing Orthopedic Surgeon, owns Sunset Medical, a professional corporation located in Colorado. Sunset is a small practice servicing patients from the local community and tourists who are in the region to frequent one of the area’s ski slopes and hiking trails. Sunset is well respected by both Sally’s peers and patients; Dr. Jones has been approached several times to move her practice to a large urban hospital where her practice could increase its $1 million revenues several times over. However, Dr. Jones prefers the quite lifestyle of rural Colorado to the more frenetic pace of urban living.

Sunset Medical experienced a great deal of turmoil over the past few years. In 2008, while at a medical convention, Medical Management Inc. (MMI) approached Dr. Jones with a proposal to provide managerial and billing services. MMI’s pitch centered on utilizing synergistic core competencies, exploiting MMI’s marketing and managerial expertise and Dr. Jones’ professional reputation to increase revenues, decrease expenses, and improve cash flows. After lengthy negotiations, Dr. Jones signed a contract with MMI and after a three-month trial period, effectively turned over Sunset’s day-to-day operations. However, at the end of the first full fiscal year, Dr. Jones finds herself questioning whether to continue Sunset’s contract due to unforeseen financial setbacks or to terminate the contract and in-sourced all previously outsourced activities. Sunset Medical Pre-2009

Prior to contracting with MMI for managerial and billing services, Dr. Jones fostered a family atmosphere within the practice; many of the employees had been with the practice since its inception in 2000. This informal atmosphere facilitated a great deal of flexibility in employee roles, allowing Sunset Medical to function efficiently and effectively with minimal staff. In addition to Dr. Jones, Sunset Medical...