BUS644: Operations Management

Case Studies Week 2 Assignment

Memorial Hospital

Memorial Hospital is a privately owned 600-bed facility. The hospital provides a broad

range of health care services, including complete laboratory and X -ray facilities, an

emergency room, an intensive care unit, a cardiac care unit, and a psychiatric ward . Most of

these services are provided by several other hospitals in the metropolitan area. Memorial

has purposely avoided getting involved in any specialized fields of medicine or obtaining

very specialized diagnostic equipment because it was felt that suc h services would not be

cost-effective. The General Hospital, located only a few miles from Memorial, is affiliated

with the local School of Medicine and offers up -to-date services in those specialized areas.

Instead of trying to compete with General Hospital to provide special services, Memorial

Hospital has concentrated on offering high -quality general health care at an affordable

price. Compared with the much larger General Hospital, Memorial stresses close personal

attention to each patient from a nursing staff that cares about its work. In fact, the hospital

has begun to place ads in newspapers and on television, stressing its patient -oriented care.

However, the hospital's administrator, Janice Fry, is concerned about whether the hospital

can really deliver on its promises, and worries that failure to provide the level of health

care patients expect could drive patients away. Janice met recently with the hospital's

managerial personnel to discuss her concerns. The meeting raised some questions about

how the hospital's quality of health care could be assured. Jessica Tu, director of nursing,

raised the question, "How do we measure the quality of health care? Do we give patients a

questionnaire when they leave, asking if they were happy here?

That does not seem to answer the question because we could make a patient happy, but

give them lousy health care." Several other questions were asked concerning the hospital's

efforts to keep costs down. Some people were concerned that an emphasis on costs would

be detrimental to quality. They argued that when a person's life is at stake, costs should not

be of concern.

After the meeting, Janice began thinking about these questions. She remembered reading

recently that some companies were using total quality management (TQM) to improve

their quality. She liked the idea—if it could be used in a hospital.