Financial Issues

Bright Road Health Care System is experiencing financial problems, for example insurers with late payments, Medicare patients with high readmission rates within 30 days (lost Medicare reimbursement), high staff turnover increasing costs, and low admissions to its obstetrics service. The Chief Administrative Officer, Mr. Baxter, is very concerned as he knows this reflects poorly on him and may erode the Boards confidence in his judgment and competence.

What this scenario does well is highlight the complex nature of healthcare delivery and like any other firm within any other industry, there are multiple challenges facing leadership teams. When faced with too much variability in the outcomes of key processes, a methodical approach should be undertaken to identify causal factors, ascertain the nature and extent of the problem, and utilize the resulting information to make well-informed decisions on how best to lower the variability to within an acceptable range.

There are several tools that operations professional use to ensure quality control and improvement within organizations of all sizes and structures. In most cases, organization will utilize a combination of qualitative and quantitative techniques to investigate process problems with the ultimate goal of improving efficiency and effectiveness. In this scenario, a heavy reliance on qualitative data obtained through interviews with key stakeholders was employed. This, of course, is a good start; however, it falls short of providing the depth necessary to really understand the true nature and scope of the problem (contributing factors) that is resulting is too much variation in process outcomes.

This is why organizations also need to use quantitative approaches to collect, analyze, and interpret numeric data so that the information generated can be leveraged to formulate lasting solutions which lower outcome variability to within acceptable limits (e.g., statistical process control). It isnt possible to eliminate variation in process outcomes, since there exists some level of natural variation in all processes. The key is to lower the variation to statistically acceptable levels. When there is too much variation in a process the costs associated with the process will be high due to the operating inefficiency; outcomes will be challenging to predict, which impacts quality; and the bottom line performance associated with the process will be virtually impossible for forecast. Remember, quality control and improvement is focused on strengthening the efficiency and effectiveness of processes and that not all problem is appropriately investigated using more sophisticated quantitative methodologies, for example, disciplinary issues with personnel. 

Directions

he student will assume the role of a member of a two person financial consultant team hired by Bright Road Health Care System to objectively investigate four areas that the Chief Administrative Officer, Mr. Baxter, believes are adversely impacting the financial performance of the company: a) late payments from third party payers; b) readmissions within 30 days of discharge (impacts Medicare reimbursement), c) decreased admissions to the obstetrics department, and d) voluntary employee turnover. While your partner is conducting interviews with key stakeholders, you are expected to focus your efforts on what is perceived to be the two most impactful issues on the companys financial position: late payments from third party payers AND readmissions within 30 days of discharge. These outcomes are associated with organizational processes and are linked to the firms revenue cycle. As a result, it will be necessary to collection and analyze of relevant quantitative data in addition to the qualitative data being obtained through interviews with your partner.

Realizing the need to investigate deeper into the nature and scope of the late payments from third party payers and the premature readmission of Medicare clients, your team will require more than a week to complete the project. Since this will be the case, you have requested a meeting with Mr. Baxter to not only plead your case for more time, but to lay out a data collection and analysis plan. He has scheduled the meeting, so in preparation, you will prepare, on behalf of the team, an action plan that will specify data requirements and describe the tools and techniques for quality control that will be used to analyze the data and come up with meaningful information that can be leveraged to make thoughtful decisions intended to improve process outcomes (decrease accounts receivables and decrease the rate of early readmissions). Keep in mind that Mr. Baxter may have limited technical understanding of quality control, so include in your plan a clear explanation for why certain data will be required and why the tools and techniques were chosen to analyze the data given the processes and outcomes being examined. The action plan should be logically presented, well-supported, and thoroughly vetted.

Instruction Guidance: It would be prudent to consider content covered in chapters 9 and 10 of the textbook; however, there are many other useful resources available on the Internet and in the literature to support the construction of your action plan.

The initial posting should be prepared as a Microsoft Word document, and then attached to the unit discussion thread. There is no minimum or maximum in terms of the word count; however, the response should explicitly address all required components of this discussion assignment. The document should be prepared as a practical business deliverable (single-spaced) and reflect higher-level cognitive processing (analysis, synthesis, and evaluation). 

Support the initial posting with at least 3 references of credible or peer-reviewed sources. The in-text citations and the list of references should be consistent with the APA writing style (7th ed.). To earn the maximum number of points for the initial posting, the overall quality of the writing should be consistent with that expected of a graduate student and industry professional.

 

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