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Publish Date: 2024-12-03

Harvard Case - University Hospital: The Joint EP/CATH Lab Decision

"University Hospital: The Joint EP/CATH Lab Decision" Harvard business case study is written by Kevin A Schulman, Cindie Wu Gasper, David Scheinker. It deals with the challenges in the field of Operations Management. The case study is 33 page(s) long and it was first published on : Feb 26, 2020

At Fern Fort University, we recommend that University Hospital proceed with the construction of a joint EP/CATH lab. This decision should be based on a comprehensive analysis of the hospital's current and future needs, taking into account the potential benefits of increased efficiency, improved patient care, and enhanced revenue generation.

2. Background

University Hospital is facing a critical decision regarding the future of its Electrophysiology (EP) and Cardiac Catheterization (CATH) labs. The current separate labs are experiencing increasing demand, leading to scheduling challenges, longer wait times for patients, and potential revenue loss. The hospital is considering two options: 1) Continue operating separate labs, or 2) Construct a joint EP/CATH lab.

The main protagonists in this case are the hospital's administration, the EP and CATH lab directors, and the medical staff who utilize these facilities. The administration is tasked with making the final decision, balancing the needs of the various stakeholders and the financial implications of each option. The lab directors are advocating for the joint lab, citing the potential benefits of increased efficiency and improved patient care. The medical staff, however, are concerned about potential disruptions to their workflows and the impact on patient safety.

3. Analysis of the Case Study

This case can be analyzed using a framework that considers both financial and operational aspects:

Financial Analysis:

  • Revenue Generation: A joint lab could potentially increase revenue by allowing for more efficient scheduling and utilization of resources. This could lead to a higher volume of procedures, particularly for non-emergency cases.
  • Cost Savings: Consolidating the labs could lead to cost savings in areas such as staffing, equipment, and maintenance. The hospital could potentially reduce the need for duplicate equipment and personnel, leading to significant cost reductions in the long run.
  • Investment Costs: The construction of a new joint lab would require a significant upfront investment. The hospital needs to carefully evaluate the potential return on investment (ROI) and the payback period for this project.

Operational Analysis:

  • Efficiency: A joint lab could streamline workflows and improve efficiency by allowing for the sharing of resources and personnel. This could lead to shorter procedure times, reduced wait times for patients, and increased patient satisfaction.
  • Patient Care: The joint lab could enhance patient care by providing a more comprehensive and integrated approach to cardiovascular procedures. This could lead to improved patient outcomes and reduced complications.
  • Flexibility: A joint lab could provide greater flexibility in scheduling and resource allocation. This could allow the hospital to better respond to fluctuations in demand and ensure that patients are seen in a timely manner.

Strategic Analysis:

  • Competitive Advantage: A joint EP/CATH lab could give University Hospital a competitive advantage in the local market by attracting patients who value efficiency, convenience, and quality of care.
  • Long-Term Growth: The joint lab could support the hospital's long-term growth strategy by increasing its capacity to handle a growing volume of cardiovascular procedures.
  • Brand Reputation: A state-of-the-art joint lab could enhance the hospital's brand reputation and attract top medical professionals.

4. Recommendations

Based on the analysis, we recommend that University Hospital proceed with the construction of a joint EP/CATH lab. This decision should be implemented in a phased approach, with careful planning and execution to minimize disruptions to patient care and staff workflows.

Key Steps:

  1. Develop a detailed business plan: This plan should include a comprehensive financial analysis, operational plan, and marketing strategy. It should also outline the expected return on investment and the payback period for the project.
  2. Secure funding: The hospital should secure the necessary funding for the construction and equipping of the new lab. This could involve exploring various financing options, such as bonds, grants, or private investment.
  3. Develop a comprehensive project management plan: This plan should outline the project scope, timeline, budget, and resources. It should also include a detailed risk assessment and mitigation plan.
  4. Engage stakeholders: The hospital should engage all stakeholders, including the medical staff, nurses, technicians, and administrators, in the planning and implementation process. This will help to ensure that their concerns are addressed and that they are fully supportive of the project.
  5. Implement a change management strategy: The hospital should implement a change management strategy to minimize resistance to the new lab and ensure a smooth transition. This could involve providing training, communication, and support to staff.
  6. Monitor and evaluate performance: The hospital should continuously monitor and evaluate the performance of the joint lab to ensure that it is meeting its goals and objectives. This could involve tracking key performance indicators (KPIs) such as patient satisfaction, procedure volume, efficiency, and financial performance.

5. Basis of Recommendations

This recommendation is based on a comprehensive analysis of the case study, taking into account the following factors:

  • Core competencies and consistency with mission: The construction of a joint EP/CATH lab aligns with the hospital's mission to provide high-quality, patient-centered care. It also leverages the hospital's core competencies in cardiovascular care.
  • External customers and internal clients: The joint lab will benefit both external customers (patients) and internal clients (medical staff) by improving efficiency, reducing wait times, and enhancing the quality of care.
  • Competitors: The joint lab will give University Hospital a competitive advantage in the local market by providing a more efficient and comprehensive approach to cardiovascular procedures.
  • Attractiveness ' quantitative measures: The financial analysis indicates that the joint lab has the potential to generate a significant return on investment and improve the hospital's financial performance.
  • Assumptions: The recommendation is based on the assumption that the hospital can secure the necessary funding for the project and that the medical staff will be supportive of the change.

6. Conclusion

The construction of a joint EP/CATH lab presents a significant opportunity for University Hospital to improve patient care, enhance efficiency, and increase revenue. By carefully planning and executing this project, the hospital can achieve its strategic goals and maintain its position as a leader in cardiovascular care.

7. Discussion

Alternative Options:

  • Continue operating separate labs: This option would avoid the upfront investment in a new lab, but it would likely lead to continued challenges with scheduling, wait times, and resource utilization.
  • Expand existing labs: This option would involve expanding the existing EP and CATH labs, but it would likely be less efficient and cost-effective than building a joint lab.

Risks and Key Assumptions:

  • Funding: The hospital must secure the necessary funding for the project. If funding is not available, the project may be delayed or canceled.
  • Staff resistance: There may be resistance from the medical staff to the new lab. The hospital must address these concerns and ensure that the staff are fully supportive of the project.
  • Construction delays: Construction delays could lead to increased costs and disruptions to patient care. The hospital must carefully manage the construction process to minimize delays.

8. Next Steps

The hospital should immediately begin developing a detailed business plan for the joint lab. This plan should be presented to the board of directors for approval. Once approved, the hospital should begin securing funding and engaging stakeholders in the planning process. The project should be implemented in a phased approach, with key milestones and deadlines established to ensure timely completion.

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Case Description

Health care management requires careful planning for efficient operations, in an environment where technology, best practices, and patient demands continue to change rapidly. This case study presents an operations management decision at a large academic medical center in response to falling demand for cardiac catheterization (CATH) procedures and growing demand for electrophysiology (EP) procedures, and requires students to consider all angles of the decision. Merging two currently separate but clinically similar labs into a contiguous physical space would allow for more efficient scheduling and operational efficiency in the shared space, as well as affect clinical outcomes, and patient and staff satisfaction. In this case study, students analyze the operational decisions required to plan the merger of the two labs to achieve operational, financial, and clinical hospital objectives, using a dataset too large to analyze manually. The case asks students to create compelling visual representations of these data, use a discrete event simulation (DES) model, and present their results as if to hospital leadership.

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