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For the exclusive use of R. JAFRIN
Harvard Business School

9-101-067
Rev. April 9, 2001

Montefiore Medical Center
I did not want to spend my life reducing head count. I had to make some major changes to have Montefiore grow and become more customer-focused. Elaine Brennan was remarking on the challenges she faced in 1996 as the newly-appointed senior vice president of operations at the Acute Care Division of Montefiore Medical Center. The Center, the result of a merger of a large urban teaching hospital with a small university hospital, had a $57 million annual budget deficit and operated within strong functional silos. It was the largest provider of medical care to the 1.2 million residents of the Bronx, 65% of whom were Hispanic and African-American. The borough had become a national symbol of urban decay, with deteriorating tenements, and high rates of unemployment, addiction, poverty and disease. Montefiore’s patients came from all the ethnic groups of the Bronx, and included more Medicare patients than any other US institution.

History1
The Montefiore Home for Chronic Invalids was dedicated on the morning of October 26, th
1884, to honor the 100 birthday of Sir Moses Montefiore, a Jewish leader and philanthropist. The Home cared for the chronically ill patients that other hospitals could not help—patients with tuberculosis, syphilis, “the opium habit,” arthritis, and chronic kidney disease. The Home grew larger and moved from Manhattan’s Upper East Side to Harlem, and then finally to the Bronx. Some of the best doctors in the city donated their time for patient care, teaching and research, and Montefiore soon became known for its commitment to social service and scientific progress through innovative health care, information and discoveries.

In a separate development, Yeshiva University sponsored the creation of The Albert Einstein College of Medicine2 in the Bronx in 1955. Einstein quickly became a highly successful medical school. In September 1963, Montefiore agreed to operate Einstein’s patient-care facility, the Hospital of the Albert Einstein College of Medicine (HAECOM). Montefiore and the Einstein hospital remained distinct entities with separate administrations for the next 13 years. Four miles of busy

1 Material drawn from Dorothy Levenson, Montefiore (New York: Farrar, Straus & Giroux, 1984). 2 A small group traveled to Princeton to ask Professor Albert Einstein for permission to use his name. Professor

Einstein initially declined because he was not a physician, but the group persisted due to the value of his recognized and distinguished name.
Professor Robert S. Kaplan and Research Associate Noorein Inamdar prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright © 2001 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. 1

This document is authorized for use only by Riffat Jafrin in AU2 Accounting for Managers taught by Alexandra Mutiu from March 2012 to May 2012.

For the exclusive use of R. JAFRIN
101-067

Montefiore Medical Center

urban streets separated the two hospitals. Together they were one of the largest and most respected medical centers in the country, providing complex tertiary care to patients as well as primary care to the multiple ethnic populations that lived within the borough. By 1986, however, Montefiore was experiencing severe management and financial problems. The board selected Spencer Foreman, M.D., as the new president,...
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