The Washington Mercy Hospital is a large not for profit hospital in a suburb area with a capacity of 450 beds. The hospital at its existing capacity offers various services like inpatient, medical-surgical pediatric and many more. Washington Mercy is in the phase of addressing drifting demands of services in patients considering the ease of availability and time consumed on the newly introduced services by the other smaller medical services centers. The hospital is facing the dropping subscription of inpatients due to the increased subscription of outpatient services. In view of addressing the changing demand, the hospital management has established an ambulatory surgery center. Besides the hospital management has initiated to change the information system in order to upgrade and enhance the older one. Also, the existing system has been undergoing extensive up gradations and modifications every now and then, costing the management high expenses. The management has worked out a request for proposal and hired DCS, a system integration company specializing in the medical field; to prepare and install a new server-based information system that includes advanced software features specified in RFP. The system has been installed successfully but is not performing up to the specification. It resulted in a dispute between Washington Mercy and DCS regarding the performance of the newly installed software and Ben Solomon is hired as a mediator to resolve the dispute between two parties and propose an equitable settlement.
- The core managerial problem that Washington Mercy faces is the lack of attention towards details that was much needed in the installation of an expensive information system. The management did not do the realistic forecasting of the capacity needed in the coming five years. It should have been of the prime importance that the request of the proposal has to be crucially accurate since the DCS management would solely dependent on the information provided in that.
- Besides as the hospital is undergoing organizational changes like adding new departments; it should have been proactively forecast the effectiveness of their marketing strategies by evaluating the response of their customer to their provisions of new services. If it were pre-established that there would be a greater subscription to an ambulatory surgery center the capacity could be better estimated.
- The management also takes longer to make a decision as it first established committees to propose system features and took several executive meetings to finalize it. Still, the effort failed to ripe an effective request for proposal.
- As the industrial norms were changing and patients were churning to more convenient services than inpatient the Washington Mercy management should have addressed the changes timely. It may well is responding to the market drifts by adding ambulatory service and upgrading the information system, but it is late in anticipating the magnitude of the change and the measures it needs to be taken in order to be prompt.
- Washington Mercy is a big hospital with heavy capital spending; it strives to meet the demands of its external customers aggressively but resist providing resources to its internal customers in terms of the higher capacity server. It has to balance out its expansion strategy and should prioritize its budget allocation.
- The technical problems are with the newly installed advanced information system. It takes longer than estimated time to respond. The capacity server usage is close to 100 percent while the system many times bears the extra load. It results in delays the processing time and questions the ability of enhanced systems.
- The addition of an additional 12 network computers brings extra demand and hence affects the overall responsiveness of the system.
- The newly installed system already works close to capacity and does not have room for additional capacity prospected for years to come.
- The management at Washington Mercy is defensive and putting the blame of their lack of grasps over projections on the system providers. It does not ready to admit its shortcomings in order to come down to a realistic discussion that proposes the best possible solution to the problem.
- The management also has a lack of objectivity and nonprofessional attitude that is the stumbling block in the proposition of a solution and make them take too long to come down to a decision.
- If the organization has been working on the addition of an ambulatory surgery center; it should have made a clear and ultimate decision on a timely basis. It should have a proper marketing research department that forecasts the market drifts and establish the Washington mercy’s positioning among its competitors as to when it is appropriate to add a department.
- The company should also put a reality check on its resources and to what extent it can expand in order not to collapse internally.
- The realistic capacity requirements for coming five years should be worked out.
- The effectiveness of systems and procedures should be questioned and checked. For example, the time, money and effort spent on preparing the request for proposal were worth it and whether the specifications mentioned in it were accurate and sufficient to fulfill the original capacity of the hospital in coming five years.
Technical Solutions :
- The information system installed should be upgraded by consulting DCS professionals. The response time should be improved by either swapping the network server to an advanced one or by adding a RAM and additional disk. For the long-term ease, the Hospital management should consider installing the expensive network an additional capacity. It will make them pay once higher but will bring stability in the system for coming years preventing them with the pain of constantly upgrading the systems.
The solution was chosen:
- In the short run, the hospital management should understand its dependence over the information system and need of spending over additional capacity. It should be materialized by accepting the DCS’s proposal of swapping to a larger server and enhance its operations. This way they can also eliminate the evening shift and reduce the cost of extended operations as well as of an additional employee. The person hired should be given a severance payment in order to retain the company’s goodwill.
- In long run, a clear expansion strategy is needed to be established that is in line with the financial and capital resources available to the hospital.
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The problems encountered by Washington Mercy’s management brings into light the fact that how important it is to be realistic and proactive to address the demand effectively. If the organization wishes to undergo any changes; it is crucial to perform prior research about establish the magnitude of change and the capital as well as the human resource it is needed for effective implementation. The organization has to be clear, pragmatic and on-time in developing its strategy of expansion and budget allocation to resources.