- Why should program evaluation be used for public health and not-for-profit institutions in the development of adaptive strategies?
- Explain the strategic position and action evaluation (SPACE) matrix. How may adaptive strategic alternatives be developed using SPACE? Health Care Strategic Management
Case Study #8: “Dr. Louis Mickael: The Physician as Strategic Manager”
Develop an environmental assessment and an internal capabilities analysis using decision support tools that have been introduced in this module (such as PLC analysis, BCG portfolio analysis, SPACE analysis and so on). Analyze alternative strategies to include pros and cons of each alternative, then conclude with a recommended strategy and brief implementation plan.
CASE 8: DR. LOUIS MICKAEL590
By the early 1980s, costs to provide these health care services reached epic proportions; and the ﬁnancial ability of employers to cover these costs was being stretched to breaking point. In addition, new government health care regulations had been enacted that have had far-reaching effects on this US industry. The most dramatic change came with the inauguration of a prospective payment system. By 1984, reimbursement shifted to a prospective system under which health care providers were paid preset fees for services rendered to patients. The procedural terminology codes that were initiated at that time designated the maximum number of billed minutes allowable for the type of procedure (service) rendered for each diagnosis. Health Care Strategic Management
A diagnosis was identiﬁed by the International Classiﬁcation of Diseases, Ninth Revision, Clinical Modiﬁcation, otherwise known as ICD-9-CM. The two types of codes, procedural and diagnosis, had to logically correlate or reimbursement was rejected. Put simply, regardless of which third-party payor insured a patient for health care, the bill for an ofﬁce visit was determined by the number of minutes that the regulation allowed for the visit. This was dictated by the diagnosis of the primary problem that brought the patient into the ofﬁce and the justiﬁable procedures used to treat it. These cost-cutting measures initiated through the government-mandated prospective payment regulation added to physicians’ overhead costs because more paperwork was needed to submit claims and collect fees. In addition, the length of time increased between billing and actual reimbursement, causing cash ﬂow problems for medical practices unable to make the procedural changes needed to adjust. Health Care Strategic Management
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This new system had the effect of reducing income for most physicians, because the fees set by the regulation were usually lower than those physicians had previously charged. Almost all other operating costs of ofﬁce practice increased. These included utilities, maintenance, and insurance premiums for ofﬁce liability coverage, workers’ compensation, and malpractice coverage (for which costs tripled in the late 1980s and early 1990s). This changed the method by which government insurance reimbursement was provided for health care disbursed to individuals covered under the Medicare and Medicaid programs. Private insurors quickly adopted the system, and health care as an industry moved into a more competitive mode of doing business. The industry proﬁle differed markedly from that of only a decade earlier. Hospitals became complex blends of for-proﬁt and not-for-proﬁt divisions, joint ventures, and partnerships. In addition, health care provided by individual physician practitioners had undergone change. These professionals were forced to take a new look at just who their patients were and what was the most feasible, competitively justiﬁable, and ethical mode of providing and dispensing care to them. For the ﬁrst time in his life, Dr. Mickael read about physicians who were bankrupt. In actuality, Dr. Charles, who shared ofﬁce space with him, was having a ﬁnancial struggle and was close to declaring bankruptcy. Health Care Strategic Management
The Impact Of Nursing Outcomes And Patient Care Efficiencies