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Lenox Department of Obstetrics and Gynecology (A)
Charns, Martin P.
Functional Area(s):
   Organizational Behavior
   Healthcare Management
Difficulty Level: Beginner
Pages: 4
Teaching Note: Not Available. 
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First Page and the Assignment Questions:
David Rand, M.D. was planning his initial actions to reshape the Department of Ob/Gyn. He had just assumed the chairmanship and knew that considerable change was needed to create a department of regional and national stature. As Dr. Rand considered his initial actions he wondered not only about what actions to take but also about the sequencing of efforts.


Lenox Medical College (LMC), located in Urbania, was a large private U.S. medical school, and the largest of four medical schools in Urbania. Many of its vast group of private alumni practiced in the city of Urbania or the surrounding region and provided an excellent referral base for the hospital and the department. Among clinical Ob/Gyn departments in the area, Lenox was generally ranked second of the four, when considering patient preference surveys and resident recruitment. Lenox University Hospital (LUH) was very innovative in its organization and management. The hospital had developed relationships with several community hospitals and was seeking to build a strong referral network. Strategically it had committed to emphasis on and development of three clinical areas: cancer, cardiovascular disease, women's health in that order.

Much of the strength of the Department of Ob/Gyn was in its voluntary faculty, who had strong clinical skills and reputation in the community. Several outstanding clinicians also were members of the full-time faculty, but their research output was very small. Faculty at Lenox had been early adaptors of chorionic villus sampling (CVS), and had the largest CVS practice in the region. Other subspecialties were not as strong, and the general section, which relied heavily on the voluntary staff, was stretched thin. For many years the department had been on a plateau with regard to its performance; the rapid changes in medicine during this time led to Lenox's relative decline.

The department had severe financial problems. The outpatient "clinic service," Gynecology & Obstetrics Associates of Lenox (GOAL-A), was a major financial drain on the department due to high utilization and the lack of sufficient payment for public patients. The department also had failed to aggressively build a private practice group, especially in the subspecialties. At one time the private practice and clinic service were integrated and patients were seen in the same clinical area. That history and continuing close physical proximity of the practices contributed to the perception of the private practice as the "clinic service." About five years ago, the departmental finances had become so bad that the Medical School actually withheld the clinical practice component of salary payments for two months to full-time Ob/Gyn faculty members to cover GOAL-A deficits.

 The department did not have strong administrative systems. When he asked for financial reports, Dr. Rand was told, "They're around here somewhere." The department administrator reportedly, "read magazines all day" and had no administrative training. Financial control systems and accountability were lacking, antiquated word processing and other equipment were used, and overall there was no strong work ethic among the support staff.