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Paul Levy Taking Charge of the Beth Israel Deaconess Medical Center (A) Case Solution
The merger of Beth Israel (BI) and Deaconess took place after the Partners Healthcare System was formed by a merger of a number of outstanding hospitals. The leaders of BI felt threatened that the Partners would capture a large part of the market; therefore, despite their numerous differences, they merged with Deaconess to form the Care Group System. It was immediately evident that the plan of merging was unsuccessful. Soon enough, BIDMC, one of hospitals in the merger, started making huge losses and other hospitals had to share the burden of their losses, as well. Every now and then, a turnaround plan was created and implemented. However, the situation of the hospital further deteriorated. Paul Levy understood the problem clearly. The hospital had poor leadership and lack of accountability. Further, the leadership problem caused problems in implementation of plans, which were also flawed many times. A hope to see better governance came when Paul Levy was offered to take over the leadership of BIDMC.
Following questions are answered in this case study solution:
What was the situation Levy inherited at BIDMC? What challenges did he face? Why had previous turnaround efforts failed?
How did Levy get started in his new job? What were his objectives? What did he accomplish?
What was distinctive about the way Levy went about formulating, announcing, and implementing the recovery plan? How did he overcome resistance?
What can we learn (to do or not to do) from Levy’s thought processes and his approach to leading change?
Paul Levy Taking Charge of the Beth Israel Deaconess Medical Center A Case Analysis
1. What was the situation Levy inherited at BIDMC? What challenges did he face? Why had previous turnaround efforts failed?
The situation that Levy faced at the time when he inherited BIDMC was in chaos. The hospital was making huge, double digit losses, numerous plans to turn around the situation were being devised, but no outcome was achieved over a number of years. Many of the good surgeons had already left the hospital due to the poor outcome and many sections of the hospital were performing poorly because they felt left out of the managerial decisions that were being made.
Levy, who was good at analyzing the problems that a company faced, realized almost immediately that the reason why BIDMC was going down was not medical. On the contrary, the reasons for the setback were purely due to the management and were to be blamed on poor leadership and lack of integrity.
Levy had attended a number of meetings before where he had seen plans being devised in order to improve the condition of the hospital. However, he also noted that at the time of implementation, not much action was being taken and when the time to evaluate the results came, the hospital was still in the same place as it was before the plan to bring about a change was designed. Therefore, one of the challenges that he faced was a lack of action or rather, lack of joint action and implementation. In order for the hospital to survive and succeed, Levy knew that it needed a strong leadership that overlooked the management well and made it accountable. He found this out after the report of the situation was provided by Hunter Group. Levy understood the challenge that he had to meet in the foreseeable future was to have a feasible plan and to ensure that it was implemented properly. Also, he realized that the hospital needed a clear set of objectives with mutual consent to reassure an upturn of situation.
2. How did Levy get started in his new job? What were his objectives? What did he accomplish?
Before he started; on his first day; his first week?
Being the liaison between the Dean of Medical School and the affiliated hospitals, Paul Levy attended the meetings that took place where turnaround plans were pondered for BIDMC. He observed the meetings and soon he realized that many of plans were flawed and were not properly implemented. Thus, the situation of the hospital, instead of improving, further deteriorated. Levy understood that lack of motivation and poor leadership were some of the reasons.
As soon as Levy started with the job, he brought about some change in plans. First of the apparent changes were that previously, the leaders of BI were planning to close down the obstetrics unit which annually delivered 5000 babies. Levy understood that this was not a good idea, not for purely financially reasons but because the obstetrics unit was held importance by the people of Boston too. Therefore, his immediate objectives were to dismiss decisions that had been made earlier, and that were unhealthy for the hospital.
Further, Levy had studied the government structure of BIDMC, and it was not really clear as to who was ruling the Care Group, whether it was BI or BIDMC. Having more than one ruling body is likely to create clashes in ideas and objectives; therefore, Levy reintroduced a governing body with fine leadership, which held management accountable.
His accomplishments cannot be overlooked because a hospital that was making losses due to bad governance improved its situation immensely once the leadership was restored.
3. What was distinctive about the way Levy went about formulating, announcing and implementing the recovery plan? How did he overcome resistance?
Before taking over the lead in BIDMC, Levy had attended the meetings where plans were devised to bring about a recovery to the situation of the hospital.
In one of the meetings, there were three components in the plan which included direct competition with the leading Harvard hospitals, a macro collaboration program where a drug company would provide money which would then be used for clinical, rather than research purposes.
Levy immediately spotted the flaws in a plan that apparently looked appealing and interesting. He pointed out at the meeting that while the hospital was planning to compete with the top Hospitals, they needed to remember that some of their very best staff had already left the hospital due to its poor performance in the past.
Moreover, he pointed out that there was no guarantee that a drug company would be willing to pay money to see the new medical miracles taking place in the hospital and even if a company does enter a deal; it will have the power to negotiate and the hospital will have no choice but to follow. Levy concluded by pointing out again that the hospital did not seem to have any milestones or long term objectives which ensured implementation and success.
This scenario shows the distinctiveness that Levy had when it came to create a plan. He knew where the problems could have arisen and how it could have been improved.
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