Paul Levy: Taking Charge of the Beth Israel Deaconess Medical Centre (A) Case Study Solution

Trouble for BIDMC

Beth Israel before becoming Beth Israel Deaconess Medical Centre, got into trouble when in early 1990’s Brigham was merged with the Massachusetts General Hospital, which led them towards capturing more market share of the market, however BI was unaware of their merger until the news was announced. Previously, there were discussions of merger between BI and Brigham, which couldn’t happen because there were differences in the leadership styles of the both hospitals’ managements. After this, partners of BI were more persuasive to merge the hospital for the purpose of getting more market share and to have better negotiations with insurance companies, which would have been possible if it had great impacts on them.

Finally in 1996 they decided to form a partnership with Deaconess, Mt. Auburn Hospital, the New England Baptist hospital and few others. For better competency, they created a business model which allowed other communities to have affiliation, which included physicians and primary care experts to facilitate the public at large. However Beth Israel and Deaconess were opposites in terms of their primary goal, and because of the change of authority; there was a distress among the expert chiefs of Deaconess, in result of which, some better physicians left as there was lack of trust, healthy feelings and hospitality.

They encountered more trouble after the merger while working on business side and clinical integration, because of the fact that both were not doing well, which was creating distress among the doctors as they were always against the decision of clinical integration. In order to make the situation better; the management decided to buy different plans for practice and paid more than the reasonable amount, which was increasing the cost. In addition to this, the incentives provided to employees were also inappropriate, which caused the hospital to have loss incurrence. Now the BIDMC was having double digits loss on annual basis, which resulted in BID losing its money, in 1990’s.

Lack of credibility, confidence and trust among the higher management, such as COO, CEO and the president of BI, led them make decisions on their own and there were times when decisions were taken by CEO Reinertsen and COO Sharon O’Keefe, and President Mike Rosenblatt was unaware of them and didn’t give his consent. Furthermore, there was no support for decisions made by COO by the chiefs, and there was a tradition of undo decisions by the people on her, on who used to visit members of the board…………………………………

 

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