Montefiore Medical Center

Topics: Health care, Balanced scorecard, Strategic management Pages: 6 (1552 words) Published: June 12, 2012
TO:Dr. Spencer Foreman
SUBJECT: Montefiore Medical Center Analysis
DATE: May 5, 2011

Montefiore Medical Center (MMC), developed from the consolidation of two hospitals in the Bronx, New York, consists of two acute care hospitals, 31 primary care centers, a home care agency, and a physician/medical joint venture with an annual operating budget of over $1 billion. By 1995, from a combination of lower payment arrangements, increased competition, and unsatisfied patients, MMC was running a $57 million budget shortfall.

In response, consolidation of operations was performed leading to almost immediate cost savings of $15 million. However, with consolidation came a reduction in staff, an increase in individual responsibility, and concerns about a reduction in the quality of care. Business strategy development lead to the creation of two care streams including a population-based approach for residents of the Bronx, and specialty care centers to deliver high quality subspecialty care to local patients and patients from outside the Bronx. The strategy, termed GRIP (page 3), provided four imperatives to be utilized in the development of the two streams of care. The implementation of the Balanced Scorecard developed at Harvard was used to measure and manage performance, with scorecard development to be performed for each section of the organization. Issues and Analysis:

Despite some success in meeting envisioned targets for MMC, financial, organizational and strategic challenges remain. This memo will make recommendations in key areas upon which MMC may further improve upon what has been achieved to date.

Financial Performance:
Application of an external analysis including a service-client/sponsor matrix and a PEST analysis (Appendices 1 and 2) identifies areas where MMC may target portions of the GRIP strategy in order to improve financial performance. The population-based approach to care delivery for the people of the Bronx requires further growth of the community-based programs already in place. Expansion of community-based clinics will provide increased points of access, greater continuity of care between patients and providers, and greater opportunities for preventative care. Continued investment in an electronic medical record will allow increased information sharing through the MMC system, better clinical data management and outcomes analysis, and further opportunities to increase preventative care. In a capitation environment, increased emphasis on prevention improves patient care and outcomes, while reducing costs to the system.

Emphasis on components of specialty care, with services provided to individuals beyond the Bronx, will help to increase market share amongst private payers and less cost-conscious insurance plans. Ongoing investment in technology, emphasis on strong academics and research, and recruitment of high quality health professionals in the designated subspecialty areas, all in line with the GRIP strategy, will further improve MMC outcomes and reputation in these areas. Increased patient satisfaction from these endeavours will expand referral volumes and increase market share both locally and outside of the Bronx. These efforts, combined with a reduction in costs through improved outcomes such as shorter hospital stays, reduced emergency room visits, and lower patient readmission following discharge, will drive improved financial performance.

Reframing Organizational Change:
The organizational and structural change that occurred at MMC from consolidation lead to uncertainty amongst health care providers, academics, and administrators about their respective roles in the new organizational framework. The barriers and challenges to change are outlined in Appendix 3, reframing organizational change. Each frame requires attention as part of the reshaping of organizational culture to ensure that all members of the organization are engaged in...
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