Clough Case Study
Mount Auburn Hospital
Originally named the Cambridge Hospital, Mount Auburn was founded in 1886, as a charitable medical facility that was funded by donations. As was a hybrid hospital that served the community and also had an affiliation with the Harvard Medical School. This provided an opportunity to train specialists and interns in the residency program across many medical specialties, thereby enabling Mount Auburn to be on the forefront of new medical technology and cutting-edge clinical research.
By the mid 1990's, like many hospitals, it adopted the "fee for service" system under Frank Lynch's regime. Mount Auburn was the leading hospital in the primary health service area with 23% of patient discharges in 1993. However, by 1998 it experienced significant operating losses of $10 million. This was partially due to the merger and acquisition activity of Boston area Hospitals at that time and partially due to the internal tension between the hospital administrators and physicians. Lynch's response to this situation was to eliminate positions and cut costs, which further demoralized the physicians groups to stay at Mount Auburn. Physician groups left the hospital to join the network of competitors, which further caused losses, which lead to Lynch's resignation and paved way to new leadership.
Dr. Andrew Brotman, a former Chairman of Psychiatry at Harvard Medical School took over Mount Auburn as the interim CEO after Lynch. The antagonistic relationship of Lynch had eroded the confidence and trust in hospital leadership, especially with the Physicians. Physicians were relieved by this change; they could relate to him and felt he could understand their problems. They were pleased to have a doctor at the administrative level who could understand them. There was an immediate change in morale. Because of his pedigree and background many individuals naturally assumed that he would transition into the CEO role. However, much to the surprise to a lot of people at
Originally named the Cambridge Hospital, Mount Auburn was founded in 1886, as a charitable medical facility that was funded by donations. As was a hybrid hospital that served the community and also had an affiliation with the Harvard Medical School. This provided an opportunity to train specialists and interns in the residency program across many medical specialties, thereby enabling Mount Auburn to be on the forefront of new medical technology and cutting-edge clinical research.
By the mid 1990's, like many hospitals, it adopted the "fee for service" system under Frank Lynch's regime. Mount Auburn was the leading hospital in the primary health service area with 23% of patient discharges in 1993. However, by 1998 it experienced significant operating losses of $10 million. This was partially due to the merger and acquisition activity of Boston area Hospitals at that time and partially due to the internal tension between the hospital administrators and physicians. Lynch's response to this situation was to eliminate positions and cut costs, which further demoralized the physicians groups to stay at Mount Auburn. Physician groups left the hospital to join the network of competitors, which further caused losses, which lead to Lynch's resignation and paved way to new leadership.
Dr. Andrew Brotman, a former Chairman of Psychiatry at Harvard Medical School took over Mount Auburn as the interim CEO after Lynch. The antagonistic relationship of Lynch had eroded the confidence and trust in hospital leadership, especially with the Physicians. Physicians were relieved by this change; they could relate to him and felt he could understand their problems. They were pleased to have a doctor at the administrative level who could understand them. There was an immediate change in morale. Because of his pedigree and background many individuals naturally assumed that he would transition into the CEO role. However, much to the surprise to a lot of people at