Virginia Mason Medical Center Case Solution & Answer

Virginia Mason Medical Center Case Solution


Two people who have the shared vision and goal of starting a place where patients can get treatment for any type of medical issue. So, they put the foundation of Virginia Mason Center in 1920 based on 80-bed clinic and six offices. The shared vision was to provide best care to the patients and also work as a team to build the medical clinic. It is located in Seattle Washington. The co-founder were James Tate Manson and John M Blackford. Their basic intention was to improve the well-being and health of patients, which they did through providing quality products and services. Whereas it was a non-profit organization but still it needed to gain a competitive advantage in order to survive in the industry, so in 1986, due to the need of time VMMCopted for expansion in their services and technology, which limited clinic from physician partnership. For management the authorities believed in corporate culture so it adoptedthe case study as collaborative approach.

In 2000 Dr. Gray Kaplan became the CEO of VMMC, when he was appointed VMMC was also first time when the organization started losing money, as it was happening for first time in the history. VMMC was also facing threats from competitors and its employees were also getting demotivated. It was quite challenging for newly appointed CEO. In 2001, the CEOcame up with few strategies in order to improve the service quality. Gary totally understood the vision of VMMC and he emphasized on transforming the VMMC into a leader in the health care industry. One of the biggest challenge were the competitors for VMMC, less resources and also decreasing money stream. Gary was impressed by Toyota production system and wished to implement this system in order to reduce the waste and improve the quality. The management analyzed the TPS process and found that the basic TPS focus on customer satisfaction, maintain quality, safety and employee’s satisfaction. The management found this much similar to their vision,it adopted this strategy and improved the quality in order to maximize the revenue.

Problem statement

VMMC was facing issues in quality and services, which was leading it towards loss incurrences and having dissatisfied customers. Along with that, the transfer of information was one of the issues which VMMC was facing. Actually VMMC had intended to innovate the communication channel because it had aimed to increase the flow of information at the same time in all the levels of the firm. Due to higher number of staff; it had become a challenge to ensure the transfer of accurate information to all the staff members on time. The management found that the transfer of reliable information is key and timely and accurate transfer of information tends to increase the collaboration and also helps in treating the stoke patients time-accordingly. Along with that the main focus was on the improvement of the quality and services and cost reduction.

Question 1

What was the situation at Virginia Mason when Gary Kaplan took over?

Dr. Gary Kaplan was a physician who had become the CEO of Virginia Mason Medical Center at the time when VMMC was facing challenges and the situation at VMMC was difficult because it was facing numerous loss incurrences for the first time in its history. As the financial history of VMMC was very healthy and there was not any loss of money in the previous history of VMMC, but since the moment Gary joined; the hospital started incurring massive loss. Another issue was the low morale of the staff after Gary joined the organization as the CEO, as the staff had gotten very demotivated their moral was declining further with each passing day.One of the major reason of lower staff morale was due to the hospital’s low performance who had placed severe doubts in the staff’s mind regarding their job security and the level of competition which the hospital was surrounded with in the healthcare industry.  The competition in the industry was also increasing which was a massive threat for VMMC. VMMC was under pressure to sustain its competitiveness and to maintain an irreplaceable position in the industry. VMMC was struggling to implement the strategy changes and in maintaining the quality in the organization.

Question 2

How was Gary Kaplan trying to transform the situation at Virginia Mason? What specific things was he trying to improve and how did he go about doing it?

Dr. Gary Kaplan was analyzing every situation; he analyzed that the customers’ focus was on quality services and affordability, so after an analysis; he decided to maintain the quality and also to increase the organization’s profitability. Gary developed a plan to implement the Toyota production system because TPS was based on quality management and also matched the mission of the hospital. Kaplan timely recognized the need of change and suggested to implement the TPSsystem because he pointed out that VMMC and Toyota shared the same vision and goals, i.e. customer satisfaction, quality and safety management and staff commitment. He felt that at this time VMMC needs to adopt this system in order to tackle the situation. Dr. Kaplan believed in collaboration and corporate culture. He believed that it would be helpful to use the TPS system to manage the staff and communication. It would help in improving the quality of services. To control the cost; Dr. Kaplan decided to use just-in-time production system. Hospital was using many production models from years, but these systems needed to have an update in order to maintain the condition of the hospital. Previously, in 1990s; the hospital was using the TQM but it had failed. So, Kaplan first analyzed every situation and tried to understand what was happening and how the issued could be solved to overcome the troubling situation. Kaplan then selected the TPS system and hoped that the company will improve the situation. He developed an implementation plan and within one year, he noticed positive results……………………………..

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