St. Marys Hospital Case

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St. Mary’s Hospital Case Solution
1) Upon the story presented, necessary actions should be taken to overcome the hospital’s problems. St. Mary’s Hospital last year’s numbers showed the necessity of such actions. For the first time, since the hospital started operating, they presented deficit on its revenue. St. Mary’s hospital had some major problems in a few departments. During the last few years, the occupancy, or the number of patients in the hospital, has been declining. Such problem is explained by changes made to reimbursement policies, a larger emphasis on outpatient services, and an increase in local competition. Another major problem the hospital faces is the performance appraisal system. It seems inadequate for the system in operation because it lacks precise appraisal in individual employees. Such problem can be understood by the fact that the hospital never had to face a layoff before. This could be the reason why they have such a sloppy performance appraisal system in place. In reality, the hospital never had to make any use of it.

2) Since the situation requires immediate change, the use of attrition would not be appropriate. The deficit in their budget is a major problem for the hospital. The hospital needs short term and immediate alternatives. Maybe in the future, the hospital could try to incorporate attrition to a similar problem; but now is not the right now. One good alternative for the hospital is to adapt better marketing strategies in order to obtain more impatient services. Also, the hospital could position itself as a locally better service provider. It would increase and attract more patients. Another alternative that could be feasible is the hospital specializing in certain procedures such as skim burn cases, heart transplants, or any other procedure that would easily be accessible and not very costly to the training of the personnel. The number of employees could still be the same. It would attract not only locals, but also outsiders, bringing more patients to the hospital. One more alternative could be the use of fundraising events. If the local community believes and understand the importance of the hospital to the city, they probably would understand, participate, and help. It would raise funds, and hopefully the hospital would get out of this unfortunate situation.

3) As the problems presents, the only feasible solution to the hospital at the moment will be the immediate layoff of some of its staff. The hospital’s short term goal is to achieve the necessary budget and the demand for increase revenue. The Board has recommended up to 10% of layoffs, but the main goal would be to achieve a better outcome and solution, otherwise too many people will be losing their jobs. The turnover data then should be better analyzed. From the article, one can see how much the data vary between the staff. The medical staff, with the lowest turnover rate, should be the ones on the bottom of the list of the people losing their jobs. As a rule, the 60 day notice would be necessary for those that would be sent home. It marginally gives people a sense of security and time to look for another job. The hospital could also try to help these people out by giving them advice on how to find new employment or out-placement activities. On the other side, of the employer, necessary time will be vital in order to access how the hospital will operate with the lack of personnel. As stated in the case, merit and seniority have a positive relationship. The employees with less than 3 years of experience are the main part of the ones with “unsatisfactory” or “questionable” ratings. On the other side, employees with 7 or more years of experience roughly are the ones with “satisfactory” ratings. Upon this situation, merit and seniority will be taken into consideration. A probable way of achieving the hospital’s goal, trough the cut of some of its personnel is on the following chart. It represents the number of employees...
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