Managing Orthopedics At Rittenhouse Medical Center Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Managing Orthopedics At Ritten house Medical Center Case Solution

Question 4

The main objective of the Ritten house Medical Center is to provide high quality patient care, alongside quality based academic services. The hospital’s bottlenecks included the 3B surgeons, faculty surgeons, nurses and the anesthesia specialists. The hospital had to manage these bottlenecks effectively, so that the operations of the hospital remain smooth, efficient and effective. Dr. Booth’s claim was to provide a merit based pay increase to the staff, including the nurses and technicians, as they performed a greater volume of surgeries with greater efficiency and with greater value towards the hospital.

The model followed by the 3B orthopedics was relatively different from the model followed by the faculty surgeons. The main objective of the 3B’s orthopedic model was to find different ways of reducing the time required for performing the surgeries, without compromising on the quality of the services rendered. Dr. Booth, claimed that the minimal surgical time helps the department in improving the medical outcomes and reducing the risk’s complications. In addition, Booth’s 3b department had provided different benefits to the hospital.

First of all, the 3B orthopedic department had maintained a 22% percent share in the overall net patient revenue at RMC. The hospital’s administrator explained that other hospitals did not have much net patient revenue weightage coming through a single source. Moreover, Booth’s 3B department generated a high volume of surgeries as compared to the faculty surgeons and other competitors’ hospital (See Appendix 1). Booth conveyed that his specialized and quick knee replacement involved the usage of standardized practices followed by the technicians and nurses. The 3B orthopedic unit had the highest number of surgeries, which helped the RMC in being the largest joint replacement provider in the North America.

Booth claimed that, it takes one to two hours for a typical surgeon to perform a knee replacement surgery; however, it takes only 30 minutes for Booth to perform the same surgery. The greater speed along with standardized quality and services at 3B orthopedic weremade possible because of the specialized nurses and technicians, who were paid lower than the market salary rate, and Booth was afraid that his staff might leave as they were not compensated for their stressful job and extraordinary services. On the other hand, Neela Wilson (the RMC’s Chief Operating Officer) believed that increasing the pay at 3B orthopedic department would create tensions in the hospital. It would be so, because the faculty surgeons added research to the hospital along with patient care services.

From the analysis, it has been concluded that nurses and the technicians at the 3B orthopedic center deserve an extra compensation for performing standardized services, leading towards a higher volume of surgeries. It is suggested that Neela should implement a fixed plus variable compensation system, whereby the fixed salary for both the faculty and the 3B surgeons should be kept same and a variable pay system should be introduced, whereby the volume of surgeries should be used for rewarding the merit based pay to the staff. It would increase the job’s satisfaction and the motivation of staff, working in the overall RMC orthopedic center.

The strategy would be effective as 3B units’ concern would be satisfied and it would not create a conflict between the faculty unit and the 3B unit. The higher performing units would be compensated higher and it would seem quite fair. Increasing the merit based pay for the nurses and the technicians would increase the hospital’s cost, but the uplift in cost is much important, because if the 3B staff leaves the RMC hospital; it would then face difficulties in maintaining such high surgery volume and such a higher profit margin. Increasing the pay would lead towards having a satisfied staff, which would ultimately lead towards increased efforts and commitment towards the job. Not only this, the variable compensation based on the surgery volumes will also motivate the faculty surgeons to increase their volume by following the practices at 3B center. Overall, the operations would be efficient as a result of staff’s dedications and commitment towards their job. It is so, because the staff will be motivated towards the fulfillment of their job’s responsibilities and they will put on extra efforts for maintaining the quality services and reaching the department’s goal.

Moreover, to enhance the RMC’s profitability; Neel should restructure the operations i.e. an effective negotiation process should be implemented so that the reimbursement should be guaranteed. Moreover, Neela should focus on the requirement of the authority for setting own prices in negotiations with the Medicare Diagnosis Groups. It would enable the hospital to charge more from the private firms. In addition, the rates for reimbursement should be increased, which would recover the cost for procedures followed at the hospital. In addition to this, Neela should focus on introducing an improvement in the operations and profitability of the hospital by adding new products or services, efficient and cost effective technology, an improved network of supply and an improvement in the overall organizational structure. These strategic decisions are important, because it would enable Neela to keep both of the groups satisfied, while retaining the staff for a longer duration. These strategies would enable the hospital to remain profitable and competent as compared to other hospitals in the healthcare industry...........................

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