): In this case, Jamie, the nursing home administrator, and Logan, the system’s Chief Operations...

Question

): In this case, Jamie, the nursing home administrator, and Logan, the system’s Chief Operations Office, are under the impression that the management team at the nursing home, in question, needs to focus more attention on improving operational efficiencies and addressing perceived safety concerns by utilizing a Lean production approach. The system vice president of finance, Reilly, expressed concern that utilizing a Lean may actually lower the quality of care provided to the residents due to the cost cutting that will result. In addition, he is concerned that resultant changes in processes will put unnecessary pressure on employees and, finally, that diminished quality of care and unnecessary pressure on employees are inconsistent with the current mission of the organization.This mini-case does a really nice job illustrating that there isn’t always unanimous support for cutting costs to increase profits. With that said, there is a lot of pressure on organizations to lower their operating costs in order to generate the needed profits to reinvest in the business. Healthcare reforms have increased the number of previously uninsured residents and citizens, which has correspondingly increased the volume of clients utilizing healthcare services. At the same time, reimbursement methodologies are moving away from the fee-for-service model
	
Document Preview: Unit 5: DiscussionIntroductionSynopsis of Mini-Case 11.1: Perfecting Patient Care (p. 173; Lee textbook): In this case, Jamie, the nursing home administrator, and Logan, the system’s Chief Operations Office, are under the impression that the management team at the nursing home, in question, needs to focus more attention on improving operational efficiencies and addressing perceived safety concerns by utilizing a Lean production approach. The system vice president of finance, Reilly, expressed concern that utilizing a Lean may actually lower the quality of care provided to the residents due to the cost cutting that will result. In addition, he is concerned that resultant changes in processes will put unnecessary pressure on employees and, finally, that diminished quality of care and unnecessary pressure on employees are inconsistent with the current mission of the organization. This mini-case does a really nice job illustrating that there isn’t always unanimous support for cutting costs to increase profits. With that said, there is a lot of pressure on organizations to lower their operating costs in order to generate the needed profits to reinvest in the business. Healthcare reforms have increased the number of previously uninsured residents and citizens, which has correspondingly increased the volume of clients utilizing healthcare services. At the same time, reimbursement methodologies are moving away from the fee-for-service model, which is based on volumes, and instead are using a value-based approach, which is focused on the quality of the case provided. In addition, there is a growth in capitation and bundled payment systems—each compelling providers and provider organizations to better manage their expenses. These same healthcare reforms and insurers are adding pressure the healthcare leaders to adopt new models of care delivery that will improve outcomes while better controlling costs. This trend isn’t likely to lessen. Instead, healthcare organizations...

Robert · Accepted Answer

Due to the structure of the market and the nature of the goods and services it produce, the health 
care market does not meet the conditions that facilitate the efficient resource allocation. Thus 
inefficiency is very common in health care market. Information asymmetries play a major role 
behind such inefficiency. In the health care market, information asymmetry is very much present 
between the doctor and the patient and between the consumer and the insurance companies. For 
example, patients   solely rely on the doctors for the service. Doctors only know about the illness 
and the required treatment and he is a position to determine the demand for the service. So 
demand and supply both are determined by the same party at the same time that can result 
market failure. This is termed as supply induced demand. Doctors can induce the demand for the 
service driven by the self-interest or profit motive. As supply and demand are not determined 
independently, it leads to market failure. Several research studies have indicated that increasing 
the number of physicians per capita has substantially increased the inpatient and outpatient 
service. American study also supports such findings stating that similar market inefficiency is 
very common in large metropolitan areas (Ari Mwachofi1 & Assaf F. Al-Assaf, 2011).

): In this case, Jamie, the nursing home administrator, and Logan, the system’s Chief Operations Office, are under the impression that the management team at the nursing home, in question, needs to...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment