Reference no: EM132166150

Evaluate how this situation would be different had the facility been a nonprofit or public entity, as opposed to a for-profit corporation. Be sure to include the role hospital governance plays in this situation.

Case Study-

At a time when many hospitals were on the brink of bankruptcy and struggling t survive, Brad, the administrator of a hospital a multihospital system had a positive bottom line in the millions. The hospital was located in an upscale, affluent community. Unfortunately, the money was siphoned off to support the operations and capital projects of other hospitals in the system. Meanwhile, Brad’s hospital was suffering from lack of supplies and funds for local capital projects.

Physicians and many community members, aware of the positive bottom line, were disturbed that the hospital’s funds from operations and donations were being earmarked to fund the day-to-day operations of the system’s failing hospitals. In addition, at a time when these hospitals were losing money, funds from Brad’s hospital were being earmarked for major building projects in these hospitals, as well as corporate office projects. It was trying to squeeze blood out of a stone to get people to donate to their own community hospital. The community had no trust their donations would stay in the community.

Corporate leadership was expanding its capital projects, expanding nonrevenue producing projects, relocating corporate offices to a more expensive site, building lavish suites, adding staff with vague job descriptions that served only to burden and penalize the revenue-producing entities, and jeopardizing patient care with their pet projects by deluging hospital staff with paperwork so they could produce even more paperwork to justify their own existence. Hospital staff felt that corporate staff had become an obstacle to the provision of high-quality patient care. No relief from battlefield fatigue seemed to be on the horizon.

Brad was able to work with some local community leaders (e.g., banker, lawyer, physician, newspaper editor, real estate agent) to establish a fundraising board whose mission was to oversee the local fundraising process and ensure the proper allocation of community funds to the local hospital. Although many corporate leaders privately objected to the concept, the corporate board reluctantly recognized the community board’s existence, hoping to make inroads into the pockets of the wealth. With half-hearted support by the corporation’s leadership, the death of many of the founding fathers of the community board, and the resignation of Brad, who had developed the trust and provided the leadership, the community board slowly faded out of existence under the leadership of the administrators that followed him.