Case Study of Hospital Reengineering 1
Jessica Collins
BUSI691: Healthcare Administration Capstone
Assurance of Learning Exercise
August 3, 2025
Respectfully submitted to: Dr. Geraldine Rosol
Case Study of Hospital Reengineering 2
St. John’s Reengineering Disaster
St. John’s Hospital has been struggling since the merger with St. Agnes Hospital.
Some questionable decisions were made by the President, Abhishek Ghost, and the
organization suffered for it greatly. In an attempt to mitigate those decisions, an executive
meeting was called to figure out how to pull themselves out of the red. Corporate
Counselor Joe Alexander proposed hospital reengineering; the leadership team was
looking to capture three foundational principles: increase efficiency, lower costs, and
improve quality of care.
The organization failed in its attempt to reengineer both hospitals for several
reasons. Whenever an organization is going through major changes, leadership should be
actively engaging with employees, actively communicating its vision, mission, values, and
the benefits to making changes. Poor communication and a lack of inclusion with
management led to dissatisfaction with the new project. The goals were not clearly
defined or expressed other than stating the project would turn their fortunes around.
When management is not included, the unification of the organization is unstable.
Managers are the front-line supervisors to get people on board, they hash out any
discrepancies so there is no confusion, and they voice concerns so that every angle is
accounted for. It should be the other way around. “Usually, a negative reaction towards
change happens when it is expected to result into more workload, uncertainty, and
fatigue, especially when change is rapid and spans the whole organization or large parts
of it” (Khaw et al., 2022, p. 1). This is exactly what happened for the people inside the
organization. They reacted negatively to the changes, and it seemed like not a lot of
thought went into how the changes would affect the processes overall.
Another major fail was the lack of involvement from administrators, which
morphed into a lack of buy-in from people that mattered. Asking lower-level people and
Case Study of Hospital Reengineering 3
consultants how to run departments without seeking guidance from the people who are
actually in charge is absurd.
The purpose of this communication is to consider the general role(s) of truth and
buy-in in the organizational change process. Truth and buy-in are the focus given
their critical roles, yet frequent omissions, in organizational change initiatives.
Here, truth in the context of organizational change pertains to the “why” change
may be necessary, whereas buy-in pertains to stakeholder commitment and
engagement in a change initiative. Lacking understanding and acceptance of the
“why” (truth) and subsequent buy-in (commitment to engage fully), the
likelihood of a change initiative’s success can be limited (Hubbart, 2023, para. 1)
Mostly in healthcare, organizations adopt a functional structure. “Hospitals typically have
what is called a functional design: an organizational structure based on specialized skills”
(Steinmann et al., 2022, para 5). Within these departments there are highly qualified
people whose opinions could benefit the hospital. But somehow, “the greatest
disadvantage is the potential for poor communication and coordination among units”
(Walston, 2023, p. 330). Since the important people with insight were left out, this led
to an exacerbation of the current issues. The main objective was to cut costs and
improve care; however, the costs increased, and care was stagnant. The entire
organization was dissatisfied with how things were handled and the patients’ satisfaction
also decreased. Poor communication and a lack of engagement with stakeholders caused
the reengineering to fail tremendously.
Process Improvement
To truly gauge the position of both hospitals, an analysis should have been made to
assess the present situation. A plan should have been prepared and presented to the
executive leadership team to potentially address any issues that may arise. The executive
Case Study of Hospital Reengineering 4
leadership team knows every area of both hospitals and how they were performing; to
make plans without them in the room seems amateur. Testing the new strategies in
certain areas of the hospital would have been helpful because it allows a full picture to
be painted and how tough integration could be throughout the entire organization. Six
weeks is not enough time to make major changes and cut a percentage of employees
without testing the waters to verify the challenges ahead.
“It would be said; a key barrier to implementing change is employee resistance to
change. So that, resistance to change is widely recognized as the main reason for failure
when it comes to change initiatives” (Cheraghi et al., 2023, para 1). Addressing resistance
inside the organization while doing trials of new strategy implementation would have
benefitted the executive leaders because it allows them to see change happening in real
time and could tweak things if it did not have the effect it intended. Preparation is
required for employees who are expanding their roles inside the organization. Was any
thought put into the amount of training needed to fill the positions of people who are
now dual hatting? Any thought of monetary compensation for more responsibilities? The
executive leadership team had time to address all of this if they were more involved with
the processes.
Recommendations
Currently it is out of the question for this organization to go back to what it was.
They are in a worst position than when they started and it is time to abandon all that has
got them there. The next step for them is to downsize. The skilled nursing facilities and
urgent care centers are barely breaking even. They could sell the real estate to another
organization looking to expand, so they can recoup some of their losses due to the
reengineering attempt. Another thing they could look to do is look for mergers with
other healthcare organization looking to expand. They initially had great success in the
early 2000’s when they merged with St. Agnes Hospital and it would behoove them to try
Case Study of Hospital Reengineering 5
again. To get the hospital operational, reinstate admission personnel to so Medicaid
patients can be seen.
In healthcare, culture plays a significant role in the success of the organization,
and it comprises many factors. Culture, as defined by Longest and Darr (2014),
includes the organization’s values and ethics, its cohesiveness, its philosophy
about continuous quality improvement, its customers and employees, and the
compatibility of culture with the mission (Wayland & McDonald, 2021, p. 127)
The cultural competency is at an all-time low and the executive leadership is the only
ones who can fix it.
A merger would successfully take over the financial crisis this organization is going
through. Mergers are not bad; companies merge for various reasons. “In literature,
political and economic issues are reported as the main merger drivers. Aimed at
achieving economies of scale and scope, rationalizing services, financially sustaining
smaller hospitals, increasing the ‘bargaining power’ and enlarging organizations to
address commissioner challenges” (Mariani et al., 2022, p. 191). Without proper
leadership and guidance throughout the reengineering process, employees and
managers had kept quiet about changes because of the chance of being fired. Without
proper communication and assessment from game changing professionals, organizations
will continue to fail.
Case Study of Hospital Reengineering 6
References
Cheraghi, R., Ebrahimi, H., Kheibar, N., & Sahebihagh, M. H. (2023). Reasons for
resistance to change in nursing: An integrative review. BMC Nursing, 22(1), 310.
https://doi.org/10.1186/s12912-023-01460-0
Hubbart, J. A. (2023). Organizational change: Considering truth and buy-in.
Administrative Sciences, 13(1), 3. https://doi.org/10.3390/admsci13010003
Khaw, K. W., Alnoor, A., Al-Abrrow, H., Tiberius, V., Ganesan, Y., & Atshan, N. A.
(2022). Reactions towards organizational change: A systematic literature review.
Current Psychology (New Brunswick, N.J.), 1–24. Advance online publication.
https://doi.org/10.1007/s12144-022-03070-6
Mariani, M., Sisti, L. G., Isonne, C., Nardi, A., Mete, R., Ricciardi, W., Villari, P., De
Vito, C., & Damiani, G. (2022). Impact of hospital mergers: A systematic review focusing on healthcare quality
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32(2), 191–199. https://doi.org/10.1093/eurpub/ckac002
Steinmann, G., Daniels, K., Mieris, F., Delnoij, D., van de Bovenkamp, H., & van der Nat, P.
(2022). Redesigning value-based hospital structures: A qualitative study on value-
based health care in the Netherlands. BMC Health Services Research,
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Walston, S. L. (2023). Strategic healthcare management: Planning and execution (3rd
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Wayland, M. S., & McDonald, W. G. (2021). Strategic analysis for healthcare: Concepts
and practical applications (2nd ed.). HAP/AUPHA, Health Administration Press.
