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Case 6

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by Aaron Orchard on 25 October 2012

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Transcript of Case 6

Introduction Leading Change at Tufts-NEMC Case 6: Ellen Zane Ellen Zane – First female CEO at Tufts – New England Medical Center
She accepted the CEO position and the hospital has since survived the worse of its financial troubles Case Introduction Ellen Zane struggled with the solidarity of the hospital that the financial crisis has created.
She has been able to reach their efficiency goals.
For the first time in years more doctors joined the hospital rather than leave it.
She helped the hospital have a bottom line of +$18 million.
She is working towards bettering the environment as an Academic Medical Center. Financial Problems Case 6 Ellen Zane- Leading Change at Tufts- NEMC Chad Iyoob
Aaron Orchard
Aryn Zimmerman Massachusetts’ hospitals are known for their innovative designs of combining together healthcare, education, and computer technology.
The Boston area “is a world-renowned destination for health care services.”
The hospitals in Massachusetts claim $2.3 billion of the National Institutes of Health’s (NIH) research money. It is only second nationwide to California. Health Care Industry: BOSTON Healthcare providers employ 12.2% of the workforce in Massachusetts.
These same healthcare providers make up 11.7% of the state’s gross product.
Healthcare services in the Boston area usually cost more than surrounding areas.
Consumers, producers, and government officials all seem to understand and accept this.
They accept these higher costs because of the cutting edge technologies and services offered in this region. Health Care Industry: BOSTON (2) 1990 2001 Distribution of Acute care Hospital Revenues by Payment Source in Massachusetts Exhibit 6/6 2001 1990 Distribution of Patient Disposition at Discharge from an Acute Care Hospital in Massachusetts Exhibit 6/7 Health Care Industry Environment Tufts is one of the oldest hospitals in the United States
The hospital gained a reputation for being innovators. Such innovations they showed are:
Assigned nurses to patients
Formed the visiting nurse’s association
Established multiple clinics History of Tufts – NEMC Innovation has continued in recent years with:
Cancer treatments
Transplants
Neurosurgeries
Tufts however is continuing to struggle financially.
Slow to react to market pressure.
Ineffective in approving processes and cash flows.
Harvard – Pilgrim Health Care discontinued insurance coverage. History of Tufts – NEMC (2) Tufts began to look for partners to fix their fiscal dilemmas.
In 1997, Tufts merged with the Lifespan Corporation in Rhode Island.
Would allow Tufts to have financial stability
Would allow Tufts to expand its Academic Medical Centers into Rhode Island The Lifespan Merger After 5 years the merger proved unsuccessful.
Tufts and Lifespan did not have an organizational fit together.
The distance between the two organizations was too great to work effectively.
Merger was terminated at a cost of $30 million to Tufts. The Lifespan Merger (2) Zane’s husband sold his successful business and retired, she was hoping to do the same.
After 10 years with Partners Zane was contacted by Tufts University and Tufts – NEMC to be the CEO of the hospital.
They were looking for someone with her skill of building and implementing a successful strategy to bring them out of their slump after their failed merger with Lifespan.
She ACCEPTED the position! Zane moves to Tufts As the new CEO, Ellen Zane, brought in a consulting group, who determined they were losing $6 million monthly.
The hospital was behind in many areas:
Accounts receivable and Accounts payable.
Average length of stay.
Operating margin.
It was the smallest of Academic hospitals in the area. Diagnosis: Critical (2004) Ellen Zane began to implement changes within the hospital:
Staff changes
Replaced members of senior management
Increased focus of communication and outreach
Created “Agenda for Change”
Improved length of stay times
Reworked negotiations with insurance companies
Improved reimbursement rates
Worked on rebuilding successful networks
Worked on improving relations with Tufts University Treatment (2004-2006) In 2006, Tufts – NEMC added $28 million in capital by selling a building to Tufts University.
Zane began planning for the future of the hospital:
Partnering with New England Baptist Hospital
Find a way to keep staff on track
Needs improved efficiency and cash flows to steer the company in the right direction Prognosis: Short & Long Term Outlook “In the past, hospitals have asked people in the suburbs to come to them and pay more for parking than the co-pay on their health insurance. Our view is: Wouldn’t it be a good idea to take sophisticated academic medicine and bring it to the people?”
-Ellen Zane Words of Wisdom Strength
Well known, innovative hospital
Prime location
Valuable CEO

Weaknesses
Lacking financial stability
Small size for academic medical center SWOT Analysis Opportunities
Build a hospital in the suburbs of Boston
Future mergers
Utilize innovations to achieve growth

Threats
Competition from other medical universities in area
Current influential management leaving hospital SWOT Analysis Find new hospital to merge with
Possibly another teaching hospital to combine the school and hospital

Invest in new technology that surrounding hospitals do not possess
To obtain new patients Contingency Plan CEO Ellen Zane retired from Tufts-NEMC in September of 2011.
She will continue to consult with the hospital until September of 2012.
She serves as a Vice Chairman on the Board of Trustees.
Zane pulled Tufts-NEMC back from its fiscal crisis and returned it to financial stability.
She strengthened its relationship with Tufts University and established its community physician network.
Her hallmark has been the high-quality care the hospital provides to its patients. Tufts-NEMC Today

How would YOU create
and sustain lasting change
for Tufts – NEMC? Question Sell hospital to a larger health
network so more capital is available.

Work with the Tufts University to make a program that reduces tuition if physicians agree to work at the hospital for a certain amount of years after graduation.
Gives incentive to go to Tufts instead of surrounding universities.
In long run could bring in more physicians to work at the hospital. Contingency Plan SWOT and Contingency History Diagnosis, Prognosis, Treatment, Words of Wisdom Tufts Today & Zane Question Competitors Partners Hospital
Caritas Christi Hospital
Care Group
Boston Medical Center
Blue Cross Blue Shield of MA
Harvard Pilgrim Health Care Question How do you feel about a woman as the CEO?
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