Union Medical Center Harvard Case Solution & Analysis

Union Medical Center

To: Chief Surgeon

Subject: Identification in the Management Control System

From the given material in the case physicians were concerned about the following things:

The labs in the hospital were over-used; patients were staying more in the hospital against the physician’s referrals. On the other side, if we look into the exhibits they show that physicians were right that the labs were over-used and per patient’s use of lab increased the cost. They should allow physicians to charge from customers for their services.

The surgical department in the Union Medical Center was the information center for the physician where all the record about patients was available; in fact it should be the surgical room where all surgeries should be operated.

From analyzing the case data in exhibit 3 and 4 the chief of surgical department will consider to select pages from the report where the cost is higher and where complaints of patients had been recorded. The profit center in the case is the patients’ room where the higher rate for the room could be charged and the expense center is testing labs where the cost is higher due to their over-usage.

Recommendation:

The Management control system is using the four step process; these four steps are used to determine costs incurred during the patient’s stay in the hospital. From the case analysis; it could be concluded that the management control system should be gathering the discharge summaries of patients and these summaries should be signed on the integrated system from surgeons. The reporting of the management control system should be included in the incentive plans for surgeons. It should also include fees of services delivered to patients by surgeons during their discharge.

Please refer the excel sheet for calculation and the data for the case.

The below appendix is showing the total cost incurred by receiving total patients.........................

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