.What alternatives are available?
b.What strategies do you recommend?
c.Pros and cons
d.State what should be donehow, why, by whom
Wellbe Hospital is located in the rural community of Derricksville, which has a population of approximately 6,000. Like many small towns throughout the rust belt, Derricksville has seen more prosperous times. The oil industry, once a staple of the local economy, has long since migrated to places that still have oil. Likewise, the milling industry, the other large player in the local economy has completely collapsed. Today, the pride of the communitys economic development effort is a new Super 8 Inn and a Wal Mart. Many people in the community are now relieved they no longer need to drive 30 miles to buy basic things like socks.
Derricksvilles population once was 15,000. Having lost the bulk of its economic base, the largest employers are now the school district and the hospital. The surrounding counties are, likewise, seemingly at an economic low point. There are no major communities, nor are there major highways in this region. In addition, there are no major economic development activities. Basically, the four-county region that comprises the core of Wellbes market is a marginally depressed area.
The region has seen an influx over the last decade of the African-American population. While this group represents a very small percentage of the population, it has grown by approximately 40 percent over the last decade. The Caucasian population, as a percentage of the overall population has decreased only slightly, reflecting the fact that the minority population is less than 5 percent of the overall population in the 4-county area. The overall population in the 4-county area has, over the last 5 years declined by approximately 3,600 people, a slide of about 1.8 percent.
As the local economy withered during the last 20 years, large employers either shuttered their doors or left for greener pastures. Increasingly, young people growing up in Derricksville, believing there is no economic opportunity, are reluctant to return once they leave for college. Many dont pursue a college education, but leave the community for a better economic opportunity or for a life in the military. In a nutshell, the number of employers has declined; the number of employed people has declined and, so too, has the number of privately insured persons likewise declined. With the departure of jobs and opportunity, the community has lost a substantial portion of its population between the ages of 17 and 64. The attached Table 1 shows comparative age cohorts between 2000 and 2020.
Wellbe Hospital is a typical small community hospital. Licensed for 100 beds, it successfully staffs for around 50. The attached charts indicate the patient composition of the hospital among other information on the hospital. Wellbe enjoys strong loyalty from the people who know it; however, that is a diminishing number given population trends in the region.
The administration at Wellbe is experienced; the Chief Executive Officer has been in the job for 12 years. His senior staff- Chief Financial Officer, Director of Nursing and Vice President for Human Resources are people he recruited to their jobs. All have been in place 5 years or more. When the CEO first arrived, Wellbe was in dire financial straits. Because of his management acumen, the CEO is credited with saving the hospital. The hospitals operating margin is positive, hovering around 15%, but capital investments are declining. Unafraid to make tough decisions, the CEO has reduced staffing at the hospital. Likewise, he has called upon Wellbes foundation to provide funds for some necessary expenditures. The wall-to-wall union staff at Wellbe, has at this point, accepted managements explanations of the cuts and to date has not threatened a strike. The nursing staff is very competent and caring. Indeed, the hospital enjoys a reputation in the community for the fact that the staff is very caring. People generally appreciate that the hospital knows its limits, avoiding high end medicine beyond its abilities. The medical staff is aging and, partly for that reason, has endured high turnover in key subspecialties in recent years. There is adequate primary care in the community, though a group of Internal Medicine physicians has had a quarrelsome relationship with the hospital.
This is critical given the referral patterns by these physicians to subspecialties. Many doctors are concerned about the state of the relations with the physician group and the hospital. Both recruitment and retention of certain types of physicians seems problematic. General surgery seems to be a major concern. One senior surgeon has recently retired; a group of two has left the community for greener pastures. One surgeon has been recruited. Likewise the urologist in town has announced his retirement; the otolaryngologist is also leaving for a better practice opportunity. While the primary orthopedic surgeon is very competent, he seems abrupt with patients. He splits his practice between Wellbe and another hospital. His partner, with a less robust patient load, does the same, but spends most of his time in the competitor hospital. Some doctors complain about the hospital recruiting inept physicians; some members of the community within the hospital would like to end the turnstile nature of the medical staff.
The nearest competitor hospital is 25 miles away to the west. This is a medium sized community hospital, located in the county seat, that would appear to be luring significant orthopedic business from Wellbe because of the outstanding reputation of one of the orthopedic surgeons in the community. In addition, a major integrated delivery system associated with an academic health center has opened a facility approximately 45 miles away to the south and west. While local residents are resentful of the origins of this hospital it was an outgrowth of the closure of a community hospital and it offers very high quality care and access to one of the nations leading medical centers. The impact of this institution on Wellbe is unclear. To the north is a larger community that is served by 2 hospitals, one of which is a major tertiary care center. While these hospitals do not compete with Wellbe in its primary market, they both seem to be gaining some market share around the fringe of the market, like the other competitor hospitals in the region. Wellbe has an alliance with a cancer center from the larger of these two hospitals which are just outside of its market share, but otherwise has no major alliances with any other provider. There are no competitors (nor much population) to the east.
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