Dartmouth Hitchcock Medical Center Spine Care Case Solution

1. As the Spine Care Centre’s new CFO what specific steps could you take to improve the organization’s financial performance?

The Dartmouth-Hitchcock Spine Center was formed in 1997 and has since treated thousands of patients suffering from back pain. The spine center has 25 full-time equivalent staff consisting of surgeons, therapists, nurses, assistants, administrators and social workers. The basic model of the spine center is a matrix model, where the Spine Care Center has linkages with various departments of Dartmouth-Hitchcock. So, despite being a separate department itself, Spine Care Center has to rely on other departments to fill its need with required physicians, surgeons and therapists. 

The Spine Center has 25 full-time staff unit, but all its physicians belong to other related departments and are not primarily based in the Spine Center. The first main problem with this is that part time individuals do not make a team of physicians working together towards a successful diagnosis. These part time physicians offer a specific amount of time to the Spine Center and do not form a team of doctors working every day with each other, so they could effectively diagnose the situation. The second problem relates to Spine Center generating less revenue and more costs, which can be seen from its Income Statement. Revenue only comes from the little amount of technical fee they charge from the patients, whereas, they have to pay a whole host of money to nurses, therapists and also have to pay overhead and administrative costs.

The first thing to be done is to allocate the revenues that belong to the Spine Care department. This can be done by isolating Spine Care department from the rest of the departments. Spine Care department should have its own team of surgeon, therapists, physician and nurses. Spine Care department should have its own budget allocated, and it should record its revenue and costs, accordingly. Two teams of personnel should be formed which should be the same, so the personnel know and coordinate well with each other. One team should do the night shift and the other should perform morning shift. Secondly, all MRI, X-Ray and CT scan required of patients should be done within the Spine Center because they have all the relevant technology available, so the cost of that equipment could be matched with the revenue generated.