Managing Orthopaedics at Rittenhouse Medical Center Harvard Case Solution & Analysis

Managing Orthopaedics at Rittenhouse Medical Center Case Solution

Q.1) what is RMC’s business-level strategy? Is it compatible with 3B Orthopedics’ strategy? What process strategies are utilized? How have RMC resources been aligned for operations to support these strategies?

Rittenhouse Medical Center (RMC) was a leading hospital in United States and provided a range of diagnostic and therapeutic services, teaching, and research. Hospitals’ major service areas were obstetrics, orthopedics, and other surgical expertise. However, the business level strategy of Rittenhouse Medical Center was mergers, joint ventures, acquisitions, and affiliation agreements.

The hospital had deployed this strategy due to the significant financial pressure, which was caused due to the declining reimbursements form care organizations and insurers. The insurers were not paying claims that the hospital had. However, the management of the hospital intended to gain the economies of scale and to negotiate effectively with the insurers and the payers through this business level strategy.

Furthermore, the orthopedic services were divided into two groups of surgeons. The first group of the surgeons was the hospitals’ academic faculty and the second group  of surgeons was 3B Ortho, which included seven surgeons.

The 3B orthopedic strategy is somewhat compatible to the other strategy. As, it helps to add greater value in the RMC through providing different services such as; joint replacement and hand hip replacement. Moreover, 22% of the RMC’s net revenue generated from the 3B orthopedics. In addition, the 3B strategy was focused on providing greater care to its patients, with greater efficiency that could lead towards a high quality in care and surgical procedures. Moreover, the major goal of 3B Orthopedic model was to reduce the surgical time in order bring greater care efficiency, as the longer surgeries involved high risk.

 In order to support the goal of 3B model, RMC had aligned its resources in a unique way. The surgeons had reduced their practices to knee and hip replacement. In addition, the two other operations were established in order to simultaneously perform surgical procedures. Moreover, dedicated nursing was provided to assist surgeons while they performed surgery.

 The team of anesthesia together with the anesthesia induction room has also been demanded by RMC surgeons to ensure that the surgical procedures do not get delayed. Moreover, there were several other initiatives taken in order to support the hospitals’ strategy aligned with the resource allocation.

Q.2) if the goal of RMC is to make money, how should they structure operations? What resource(s) is (are) the bottleneck? How should they design operations with respect to the bottle neck?

The ultimate current goal of the RMC hospital is to provide greater care together with greater academic services. However, if the goal of RMC is to make money then it is expected that, the hospital would need to restructure its operations. The hospital should make an effective negotiation process in order to guarantee reimbursement.

 Moreover, the hospital would also require to set its own prices by negotiating with the medicare diagnoses related groups, so that the private firms could be charged more. The hospital should make a separate pricing structure for private organizations. Furthermore, reimbursement rates should be increased so that they could help to recover the cost of hospitals’ procedures.

It is expected that, the bottleneck resources of the RMC hospitals were the 3B surgeons, anesthesia specialist, faculty surgeons, and the nurses that could limit the hospitals’ performance and profitability. Therefore, it is important to manage them effectively in order to prevent their impact on the hospitals’ revenues and profitably. The hospital would require maintenance and an effective design, so that the continuity of the procedures that they perform can be ensured................

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