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EXECUTIVE SUMMARY
The case study ascertains the significant impact of merger between Faulkner Hospital
(Faulkner) and Brigham and Women’s Hospital (BWH), a major Academic Medical Centre
(AMC). Both Hospitals were initially established in serving different market segment and were
providing diversified medical treatments. The hospitals had collaborated as they wanted to run
their business operation efficiently and to be cost effective and have specialized treatments.
Despite that, the hospitals still maintained their own identities and cultures. The hospitals needs
were different as Academic Medical Centre (AMC) is more expensive and entertains more
complex care patients. It has been equipped with capital intensive medical technology and
highly trained professionals. On the other hand, Faulkner Hospital merely a community
hospital that offers free care and variety services to their patients.
Due to constant changes in Health Care, Academic Medical Centre suffers high rising
of operation cost and fewer patients’ admission. Patients have option to opt for more less cost
treatments. This triggered hospitals to consider merging to create economic of scale and more
efficiencies and have ultimate power in negotiation with insurance companies. This was to
emphasize a WIN-WIN situation for small size and large hospitals. Brigham and Women’s
Hospital were slammed with internal issues such as resource management and poor negotiated
contract whereby Faulkner Hospital embracing to high cost and reduce in admission. Both
hospitals struggling to survive and decided to merger taking consideration the advantage of
their respective hospitals. Outcome of the merge was creation of Brigham and
Women’s/Faulkner Hospitals that targeted different market segment, resource and space
utilization and to minimize cost and maximize revenues. Faulkner Hospital was treating
outpatient cases and Brigham and Women’s Hospital on more critical and specialized need
cases.
Such allocation had made the business operation more efficient and customer oriented.
More changes were introduced at Faulkner Hospital that emphasizes on outpatient services
such as Foot and Ankle Centre. More spaces was utilized and tackle high volume of outpatient
cases and be more cost effective. Apparently, BWH was catered for more acute cases and more
specialized services were offered to the patients. Further to that, this enabled the hospitals to
maximize their manpower, save cost and focus on staff training. Moreover, Faulkner Hospital
was able to address their challenges by focusing on the root cause of the problem. For instance,
hiring a bone radiologist to train existing staff and enhance the department service, allow
doctors to perform rounds on weekends, add value service to patients. The Hospital
Management succeed in specializing their services to the patient’s need and reduced the
treatment hours. They have experts handling Department of Orthopaedic which consist of Foot
and Ankle and Sports Medicine and Hand Clinic and sustained to higher growth.
Basically, merger is beneficial for Faulkner and BWH Hospitals as they were able to
cut down their operating cost, provide better services and meet their patient’s need. The
Hospitals changed the processes to be more efficient and implemented economic of scale for
their services.
CONTENTS
EXECUTIVE SUMMARY
1.0 INTRODUCTION………………………………………………………..5
In 1990s, Academic Medical Centres (AMCs) have developed and many of these
medical centres were based in large metropolitan areas and many were destination centres for
patients who were gravely ill. This centres carrying out a three-part mission of medical
education, research and is also care provision. Doctors in other hospitals often referred their
patients to AMCs for more serious care. AMCs spent more per patient than hospitals. Costs
had not been a concern for AMCs. They were able to receive full reimbursements from
insurance companies.
Boston was a major health care centre in the United States. Boston’s best known AMC’s
were Beth Israel Deaconess Medical Centre (BIDMC), Boston Medical Centre (BMC),
Brigham and Women’s Hospital (BWH), Massachusetts General Hospital (MGH) and New
England Medical Centre (NEMC). Hospitals faced increasing pressures as the dynamics of the
health care industry changed. Health care costs begun to rise and reimbursement were
shrinking. Due to this, hospital faced the dual pressures of rising operating deficits and a decline
in patient admissions. AMCs were hard hit by these changes and many of the community
hospital doctors refer their patients other less costly hospitals. The health care industry had
seen a flurry of hospitals mergers to create economics of scale and more efficiencies and also
to strengthen their negotiating positions with the insurance companies. So, in this case study,
we will explore the merger of Brigham and women’s Hospital (BWH) with The Faulkner
Hospital, and how they reorganize services to enjoy the efficiency of new creation. It focuses
on the Orthopaedic ward in a hospital.
Brigham and women’s Hospital (BWH) was established in 1832. In 1980, the Peter
Bent Brigham Hospital, Robert and merged to form BWH. BWH employed around 12,000
people, and had more than 44,000 inpatients admissions, 950,000 outpatient visits and almost
55,000 emergency department patients visit per year. The hospital specialized in maternity,
transplant surgeries, heart, lung, kidney and heart- lung transplant surgery and bone marrow
transplantation. US world news &Report had ranked BWH among nation’s best hospitals 10
times since 1996. The hospital also had been named on Solucient’s “Top 100 Hospitals” list.
The Faulkner Hospital was established in 1903 by Dr. George Faulkner. The hospital
provided care to residents of surrounding communities. They also offered free care to those
who could afford it. In 2006, the Faulkner offered services in internal medicine, cardiology,
psychiatry, pulmonary care, orthopaedics, gastroenterology and general/ GI surgery. The
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Faulkner employed around 1,400 people and 204,000 patients visit in a year. This hospital
appeared on “Top 100 Hospitals for Performance Improvement” list.
Based on this document, both Faulkner and Brigham Women’s hospitals were
increasing pressure to reduce costs and improve quality. Before the merger, BHW met
resource-management issue, where the hospital was running out of rooms to continue their
operating treatments. On the same year 1990s, Faulkner had to face another problem where the
operating cost raised, however, the admissions were decreasing until all the resources were
underutilised and had more vacant space.
After 1998 merger of Faulkner and BWH hospital, focus on the new direction for
Orthopedics. Patients not comfortable about the Faulkner’s brand if compared to BWH, they
prefer to be seen at BWH. The BWH’s work culture moved to the Faulkner-like work additional
hours and all nursing staff’s needs supporting each other and teaching responsibilities to
exchange their knowledge. Besides that, some of the Faulkner doctors’ still preferred send their
patients to BWH for additional services even though they had the similar services.
3.1 Past
The case study overall discussed the problems that faced by Brigham Women’s
Hospital and Faulkner Hospital in the early 1990s until their process of merging. Before both
BWH and Faulkner Hospital affiliate, BWH was facing the space issue, running out of rooms
for their patients’. BWH had a positive perception of the public point of view where attract
more admission to get their treatments. To overcome their problems, BWH had a contract with
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Harvard Vanguard Medical Associates (HVMA), one of the leading managed-care companies
at Boston. Throughout this period, BWH was under major pressure to cut costs because of their
poorly negotiated contract between BWH and HVMA. After that, BWH had initiated to cut
expenses and started to explore the possibility to merge with other community hospitals to
lower the structure cost.
According to the case study, during the same period of time Faulkner facing the biggest
challenges which were totally opposite to BWH. Faulkner’s cost was getting higher but the
admissions deteriorating its operating deficit until most of their resources underutilised and
more vacant space. Moreover, the reimbursements cost from insurance agency were reducing
when the medical cost was getting higher. To attract more patients’ and secure them financially,
Faulkner partnership with other group cares. In 1998, Faulkner merges their partnership with
BWH. This partnership beneficial for both BWH and Faulkner Hospital; improve their space
and resources by aimed towards minimised cost and maximised revenues.
After the merge, Brigham and Women’s/ Faulkner Hospital (BW/F), further patient’s
admissions at BWH were sent to Faulkner to continue their treatments. Unfortunately, there
were another few issues raised, first, the Faulkner physicians failed to handle those acute cases
even though they had all the treatment’s facilities and resources. Second, the patient’s weren’t
had the confident on Faulkner hospital’s brand and their services. It seems BWH board member
become president for BW/F hospital, the BWH work culture was implemented at Faulkner by
their staffs, like working extra hours or exchange knowledge among the nursing staffs and etc.
At the time of the merger BW/FH focused more on Orthopaedics, the BWH
Orthopaedics’ practitioners were encouraged to move Faulkner which could be offered more
clinics space and operating hours. The vacant office spaces were utilised as an operating room
(ORs) for Foot and Ankle services. BWH Orthopaedics’ spaces and resources were occupied
for acute cases. Faulkner built more additional rooms and introduced the Hip Fracture Service
department. At the beginning stage, BW/FH faced few issues such as surgeries faced delays
and potentially poor outcomes. Those hip fracture patients’ admissions at emergency using a
traditional style which was same as the outpatient concepts. Next, unavailable surgeon’s to give
treatments; So that, more than half of hip fracture patients’ surgeries were treated at night or
on weekends. In this situation, the employees forced to do overtime and it’s pushed
management costs more. Afterwards, the medical evaluation of the patients’ poorly managed
and delay.
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3.2 Current
Brigham and Women's Faulkner Hospital (BW/FH) improve their services, admission
process flow, treatment methods and other facilities are provided according to the current
advance technology functions. BW/FH now offers its patients with the some of the many
sophisticated medication safety technologies by utilising a combination of computerised order
entry, management records, infusion pumps and automated drug dispensing devices. In fact,
Brigham and Women's Faulkner Hospital now utilise a “Bedside Medication Verification
System,” known as barcoding coding that instantly checks an individual medical record to
make sure that they are getting the appropriate medicine and the correct dosage at the right
time. In acknowledgement for effective or successful programs to reduce its environmental
effects, BWFH received the “Partner for Change Award from Practice Greenhealth”, the
nation’s prominent organisation dedicated to environmental sustainability in healthcare.
BW/F eventually has plentiful set ups while supporting the merger. Their strategic
planning as per to date practising value added approach to reach the hospitality management
with various programs are being offered to patient to deliver their service. Primary and
secondary inpatient care has been revised for caring centre. As such values varies from quality
patient care to deliver quality patient care with fullest support services given, teaching
excellences by providing highest standards in training healthcare professionals, leaderships
researchers, customer orientated, embracing changes and having operational efficiencies.
BW/F has also introduced to 9 joint programs by both hospitals as an integral component using
new expertise to access the community. The current situation in performing the hospitality is
seen that BW/F seeking for new staffs to be added for the new ORs. Notice that estimated cost
consideration has been at top discussion on recruiting new permanent staffs. Also attaining
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more space of workstation has been in the discussion too. Increasing the hospital as profitable
source being tried to be ratified.
Afterwards, BW/FH improved a lot in terms of technologically. They have well adapted
themselves according to the current technology updates neither in the medicine treatment
equipment utilisation nor in the management system. Their advanced medical treatment with
the latest equipment has been safe many patients’ life and improve or get back their normal
lifestyle. Furthermore, Online question and answer enquiry with their preferable doctors,
request advance appointments with the right surgeons, provide medications online studies to
create the awareness to all generally. These services are very useful for current generation with
their daily busy routine. BW/FH, keep exploring and introducing new treatment method and
services according to the current necessity. Finally, they introduce the BW/FH Using a
Smartphone to Screen for Male Infertility. Investigators at Brigham and Women’s Hospital and
Massachusetts General Hospital (MGH) set out to develop a home-based diagnostic test that
could be used to measure semen quality using a smartphone-based device. ("Brigham And
Women's Hospital - Press Releases").
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Health Care Industry They mainly focus on changes in the dynamic of the
health care industry focus both hospital to adopt to
changes.
Patients The patient of the hospital are from various categories:
- Pregnant Mother
- Poor Patient
- Patient whom are old and seek for orthopedic
treatment
- Any patient seeking for sport injury treatment
Staff The total staff are consist of:
- 12,000 Staffs are employed to manage and
operate the hospital
- 46 Doctor & 3 Physician to manage the Faulkner
Orthopaedics Department
- 46 doctors and 3 physicians that manage the
Faulkner Orthopedics Department
Insurance Companies Insurance companies plays a vital role to reimburse
patients medical cost to the Hospital.
Board Members The Board of these hospitals consist of 11 Member from
BWH & 4 Member Faulkner with limited veto power to
provide direction for the Hospital Growth
B)
Management in form of BODs, CEOs, MOs and other related parties should deliberately
sustain the emerging of operations. Aligning to clinical standards should have been drawn out
during decision making process with simplest analysis as diversifying both hospitals database
is involved.
From the case study it is learnt that Management should improve the outcomes using
Clinical Decision Supports(CDS) for merging both the hospitals as it carries a heavy data
transmission to keep their patient to be attended as usual. On the new directions on setting the
orthopaedics at BW/F, the plans on setting up more Operation Rooms (OR) the management
should be accountable in the processes and outcome that affects the CDs for instance on having
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organized staffs to run new ORs, cross cutting on the quality and safety oriented issues, expand
more medical informatics to underpin CDS interventions on new OR. Apart from that,
stakeholders also keep monitoring on the operations by evaluating data information’s of
patients to develop the merging of BW/F.
From the case study, it is noticed that the economic rationale should be determined from
the point of cost analysis which consists costs of hiring workers, renting, capitals, general
operating expenses as in salary, laboratory expenses, interest payments on borrowed funds to
raise the welfare of the hospitality. Bearing in mind on the opportunity cost that allowed inputs
for BW/F to expand. Total Cost = Fixed Cost + Variable Cost can increase the returns. In the
long run from economic view, BW/F should consider inputs to be variable in making decisions.
General principles of hospital facilities management suggest that clinical space needs to be
renovated, upgraded, or substantially changed to continually provide the highest standard of
healthcare, particularly higher acuity care. Academic medical centres like BWH are
particularly challenged to provide space which keeps pace with their innovations in healthcare.
As described below, the need for new mergers at BWH results from a variety of factors.
Higher Acuity Care and Growth - Due to the health, age, and other demographics of the
patient community, BWH is experiencing an increase in the seriousness of the medical
problems it faces every day. More seriously ill patients require more procedures, longer
Intensive Care Unit (ICU) stays, more testing and imaging, ultimately creating more
pressure on the physical and infrastructure constraints of the hospital’s facilities. Today’s
patients also suffer from co-morbidities (multiple diagnoses) and chronic conditions that
require care in multiple specialties, coordinated care among practitioners and long-term
treatment. Treating these patients and coordinating their care requires connectivity of
services and space for doctors’ offices near service areas. The optimal clinical
environment provides adjacencies that align diagnosis, treatment and inpatient facilities,
as necessary. With an aging population, combined with enhanced disease detection and
diagnosis capabilities, BWH will continue to see a significant number of patients that
require visits to two or more departments and need higher levels of care. These trends lead
to the need for BWH to organize itself into centres of excellence in various disease classes:
Women's Health, Cardiovascular, Oncology, Neurosciences, Orthopaedic, etc. At the
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same time, BWH is seeing patient volume increasing from 3 to 10 percent per year
(depending on the service line) due to the success of BWH’s state-of-the-art medical care
and BWH’s strength of reputation in the Boston medical community. BWH’s service
volumes are particularly remarkable considering the small physical size of the hospital.
New Technology and Changes in Medical Care: Rapid changes in the diagnosis and
treatment of illness are requiring changes to the physical layout of hospital space and
utility infrastructure. BWH is challenged to continually renovate and expand its aging
physical plant to keep up with this dynamic growth in medical knowledge. Examples of
how advances in technology and medical care are creating the need for new and renovated
facilities include new Image-guided procedures and minimally invasive surgeries, many
of which have been pioneered and developed at BWH, require larger procedure rooms,
more support space, and more power and cooling. At BWH, Interventional Neurology,
Magnetic Resonance Imaging (MRI) equipped operating rooms, Hybrid Operating
Rooms, focused ultrasound, laser procedures, PET scan, and nuclear medicine are some
of the burgeoning technologies all placing great demands on the physical space and
infrastructure supporting them.
Inpatient trends that require additional clinical/office support - Inpatient trends that require
more single rooms for better privacy and more intensive care patient rooms create great
demand for more space for patient rooms, which require that other hospital functions be
reduced in size or be developed elsewhere. The emerging standard of care requires the
creation of more single rooms particularly with the higher acuity patient care predicted at
the hospital. As space is a fluid commodity in a hospital, an increase in space available for
one service can help relieve stress for space demands in other service areas. For example,
growth in available space in research on-campus could allow a testing function to relocate
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from space which could then be used to decompress inpatient beds. Similarly, being able
to relocate clinical space can provide space to grow faculty office space in the backfill.
New regulations - Hospitals are subject to a myriad of local and national regulations
promulgated by the city, state, and federal governments. Hospitals are also subject to
review by professional organizations such as the Joint Commission on the Accreditation
of Healthcare Organizations (JCAHO) and the National Institutes of Health. These
requirements are subject to continual change as codes become more and more restrictive
and new public safety issues are identified.
Market and payer changes - BWH exists in an environment of a rapidly changing market
for health care. Managed care; rising medical costs; insurance reimbursements, as well as
changes to the Medicare and Medicaid systems cause changes in the way BWH delivers
health care. The changes can be sudden and dramatic and often have significant impact on
the clinical environment. New healthcare legislation pending in the Congress will likely
cause changes in the way BWH delivers healthcare and provides the facilities BWH will
need to support those changes.
Besides that, Faulkner’s operating rooms cases had also shown increase in cases from
year to year. This is mainly due to newer staff in training occupying the rooms and BWH
surgeons operated in the new rooms that bring more serious and complex cases. On top that,
one BHW based doctor had moved the Foot and ankle centres to Faulkner influenced by
Faulkner’s personalized support and faster surgical turnaround times where in BWH, the
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surgery suites are less efficient, due to significant longer between case turnaround times caused
by greater acuity of care of cases at BWH stretched resources and often temporarily diverted
by anaesthesia or nursing staff.
BW/F eventually has plentiful set ups while supporting the merger. Their strategic
planning as per to date practising value added approach to reach the hospitality management
with various programs are being offered to patient to deliver their service. Primary and
secondary inpatient care has been revised for caring centre. As such values varies from quality
patient care to deliver quality patient care with fullest support services given, teaching
excellences by providing highest standards in training healthcare professionals, leaderships
researchers, customer orientated, embracing changes and having operational efficiencies.
BW/F has also introduced to 9 joint programs by both hospitals as an integral component using
new expertise to access the community. The current situation in performing the hospitality is
seen that BW/F seeking for new staffs to be added for the new ORs. Notice that estimated cost
consideration has been at top discussion on recruiting new permanent staffs. Also attaining
more space of workstation has been in the discussion too. Increasing the hospital as profitable
source being tried to be ratified.
Recommended solutions for BW/F in the current situation certainly could be driven
out. BW/F have to determine by building good relationship with their patients by educating the
specialty of obtaining service from BW/F with providing success factor patients who recovered
at the mean time. This will enhance in expansion of patients daily and could even increase
profits annually. Besides that, BW/F also should build a very good relationship with insurance
companies so that the reimbursement process can be speeded up. They may work together to
get some agreement of the reimbursement period so that it is agreed and acknowledged for both
side. Apart from that, BW/F should consider on research to build potential partners for driving
out new merging’s. As on financial factors, BW/F should charge on reasonable assurance to
maintain their patients which could increase potential profitable growth. From the researcher’s
points of view, the outcome from the research should be implemented using the patient
satisfaction surveys by improving the nurses’ calls systems, prioritize the much need service
groups for efficiency job done, and also revise the established process to ensure changes could
be made time basis using hi-tech advancement technologies in the clinical industries.
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REFERENCE LIST
Altman, L. K. (1993, December 07). 2 Major Boston Hospitals Are Likely to Merge. Retrieved
June 03, 2017, (Online) Available from:
http://www.nytimes.com/1993/12/08/us/2-major-boston-hospitals-are-likely-to-merge.html
(Accessed Date: 5 June 2017)
Brigham And Women's Hospital - Press Releases". Brigham and womens.org”N.p., 2017.
Web. 4 June 2017.
Brigham and Women's Hospital (2016) Brigham and Women's/Faulkner Hospitals: About Us
(Online) Available from:
http://www.brighamandwomens.org/About_BWH/locations/bwhfaulkner/default.aspx
Brigham And Women's Faulkner Hospital". Facebook.com. N.p., 2017. Web. 4 June 2017
Entrepreneur Media, Inc (2017) Growth Strategies: How to Take Your Company Global
(Online) Available from:
https://www.entrepreneur.com/article/159252
https://www.healthit.gov/sites/default/files/cds/3_5_14_stakeholder_responsibilities_and_role
_descriptions.pdf
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