Dea Robinson
Small Feet OB/GYN was at one time a robust practice with five physicians, a midwife, and two PAs. The practice had a strong following in the community, was trusted by the many women it had served, and recently began delivering “legacy” babies of patients. Dr. Smith was the founder of the practice and had been the lead physician for many years.
Two competing systems with hospitals only one mile apart had vied for the affiliation with the Small Feet practice. Dr. Smith decided to change her affiliation to the other hospital. As a result, the practice experienced a move that seemed to only strengthen the patient base, and the new space (which was twice as large as the previous office) seemed to suit the new practice well.
The medical staff and CEO of the new hospital supported Dr. Smith’s move for several reasons. First, Dr. Smith, as mentioned, was delivering legacy babies and in the OB/GYN field this speaks to the trust the provider has been able to create and sustain throughout the years. This resulted in lots of community goodwill; that intangible quality is highly sought after in the medical community, yet is so difficult to quantify. Second, the new affiliation of Dr. Smith and her patients would bring positive revenues to the hospital through the move. Finally, the new hospital had a Level 1 trauma center, known for neurological cases, but not for delivering babies. The expansion of labor and delivery with the addition of a seasoned, legacy-delivering physician was a real coup for the hospital to attain.
Dr. Smith became ill and had to go on medical leave for almost a year. During that time the cohesiveness among the other providers suffered. When Dr. Smith came back things were very different. Dr. Smith became suspicious of everyone and had feelings that the staff and other providers were conspiring against her. Her suspicious attitude toward the physicians and staff in her practice led to dysfunctional problems throughout the practice. When Dr. Smith was confronted by the manager, Amy, she became distrustful and suspicious that Amy was conspiring with the other providers in the group against her.
The practice had also gone through some growing pains from a one-physician practice to five. Though originally the physicians worked well together, they now seemed to be less willing to collaborate. The practice also suffered as a result of a manager who had not kept up with the managerial requirements needed to run a midsize practice. For example, staff and provider performance reviews had never been done, the physicians had not established policies and procedures for the practice, there was no employee handbook, and tardiness was an acceptable behavior among the ranks.
When Dr. Smith wanted to complete a performance review on Amy, who had been with Small Feet for 13 years, she handed in her resignation the next day. Subsequently, three providers resigned and set up practices on the same hospital campus. Since the provider contracts (the ones who had one) were devoid of noncompete clauses, the providers exercised the right to set up a practice and some of them went into practice together.
Dr. Smith hired a consultant, Mary, to assist with management, as well as to handle the financial side of the practice. The consultant hired a new administrator, Susan, who had an MBA but little day-to-day experience. She subsequently resigned for another position with a large medical system. Mary provided an exit interview with Susan, even though Mary had mentored and been closely involved with Susan the entire time. Ironically, through the exit interview, Susan stated the reason for leaving was not because of the pay, but because of Dr. Smith’s harsh treatment of her, as well as her lack of appreciation and teamwork.
Now the practice can barely make payroll or cover other practice payables. The remaining staff is afraid of being laid off or fired due to the arbitrary and erratic lead physician behavior. You have just been hired as the administrator and learn about the many problems only after you’ve come on board. Other problems soon emerge. Embezzlement is discovered, and the lead physician was the only signer on the accounts. There was no system in place for ordering supplies or managing payroll; these duties had been performed by the prior manager verbally with no paper trail. Credit balances owed to patients had been written off at the end of the month by the manager. It was later discovered the practice owed new mothers and postsurgical patients almost $80,000 in credits that had been written off.
Dr. Smith contends that the culture of the practice comes from management, although it has been shown that culture comes from the “top.” Dr. Smith refuses to accept this, and continues to blame her staff for all of the problems that are at the forefront of the practice. You need to break this news to Dr. Smith and make suggestions on how to tackle the debt and how to manage the practice. One option is to encourage her to become a hospital system employee where she would have no control over management decisions. You know Dr. Smith does not want to become an employed physician due to her control issues; however, you see few options with the insurmountable debt as well as the clinical responsibility of the large patient base (most of whom are pregnant). The simple act of treating patients in the clinic has become difficult because supplies and devices (IUDs, etc.) cannot be ordered due to the lack of working capital.
Discussion Questions
- What are three organizational issues going on in this case? Which organizational theories do you think apply best to this situation?
- Make a list of things you need to do as the new administrator and prioritize them. What would you do on day one if you were the administrator in this practice? What data would you collect on the first day in order to go forward? What would you do next? Provide a rationale for your list and priorities.
- What type of management style does Dr. Smith practice here?
- What steps would you take to address and disclose the embezzlement issue to her?
- How would you actively manage the staff in this environment of “unknowns” among a pregnant patient base?
- Dr. Smith wants YOU to change the culture in the practice—how would you do this?
- Why do you think the providers left the practice? What could you have done to keep them in the practice, knowing they could leave with their practice and associated revenue?
ADDITIONAL RESOURCES
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Spreitzer, G. & Porath, C. (2012). Creating sustainable performance. Harvard Business Review, 90(1/2), 92–98.
