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CASE STUDY 1: Caraga Hospital

CARAGA Hospital has 50 bed capacity. The newly appointed Chief of Hospital, Dr.Jack
Melo, just finished his residency training and passed the specialty board in Surgery. He is the son-
in-law of the President of the Board of the Xavier Educational Foundation which owns the
The past ten years of operation has not been good for the hospital, having accumulated
collectibles due to unpaid hospital bills. Besides the laboratory which used to be a good source of
income, has recently been downgraded by the DOH-Regulations Team, because the equipment
are already outmoded and non functional, aside from the fact that the personnel manning the
unit are fresh graduates and lack appropriate trainings. The chief Medical Technologist has been
absentee recently and is allegedly moonlighting in a nearby newly opened laboratory.

The senior doctors have resigned, leaving the operations of the hospitals to those two
fresh graduates who are alternating in moonlighting at the hospital. A Junior resident, has not
been performing recently due to some health problems. A non board passer of medicine stays as
volunteer but seldom do his rounds. Dr. Melo, lives in the staff house with his family and is on call.

The nursing staff are inadequate in number, so the chief nurse had allowed the nursing
students to do the charting in the morning shift, including the admissions. He found out errors of
carrying out orders so he had called the attention of the chief nurse for close monitoring of her
few nursing staff.

When Dr. Melo made an inventory of the medical supplies with the Supply officer, who is
also acting as the warehouseman, he noted that the remaining drugs were just a few plastic bags
of fluids and a few boxes of 500 mg tablets of paracetamol, not a single capsule of antibiotics nor
any parenteral medications for emergency use. The supply officer, Mr. Pons is retirable and sickly
while the hospital Pharmacist is on indefinite leave, having been petitioned by her daughter to

The Records officer, Mrs. Lee, had a miscarriage and is on Maternity leave. Records are
left at the nurses’ station and unrecorded. Complains on un-acted/unfilled PHIC claims are filling

AS DR. MELO’ Consultant:

1. Cite situation of the following and give a very brief explanation of each

a.Priority Technical concern

b.Priority Financial Concern

c.Priority Commercial Concern
d.Priority Security Concern
2.Draw the three levels of managers, and identify them in the diagram.
3.How would Dr. Melo apply the different functions of management to improve the hospital
4. Cite one Organizational theory that you would apply in your Caraga hospital.


A. Priority Technical concern

Attainment of the Millenium Development Goals (MDGs) is considered to be of great technical
concern in the hospital, wherein MDGs includes eradication of extreme poverty and hunger,
achieving universal primary education, gender equality and women empowerment, reduce
child mortality, improve maternal health, combat HIV/AIDS, malaria and other diseases
including tuberculosis, ensure environmental sustainability, and global partnership for
development. All of these can be achieve through taking commitment and prompt action in
terms of an efficient financing mechanism, a competently trained and adequately paid
workforce, dependable and good source of information for decision and policy-making and a
well-maintained facilities and logistics to deliver quality medicines and technologies to all

B. Priority Financial Concern

Adequacy of laboratory services and suitable medical supplies should have been taken into
consideration. This would help to strengthen health service delivery systems to be more safe,
high quality, people-centered and integrated. More people will be given an equitable access
and receive cost-effective and immediate medical services that would alleviate their certain
condition in as soonest as time possible.

C. Priority Commercial Concern

Big investors, with their financial resources and expertise, have the advantage of being able to
start big, and to run hospitals more efficiently. This, in turn, accelerates the modernization and
expansion of the health-care sector.

The acquisition of investors to hold claim in the hospital would strategically prioritize the
improvement of machineries and financing trainings for the employees.

D. Priority Security Concern

The hospital lacks in legalities that could back-up their claim against their employees.

Co-management arrangements, under which a hospital pays physicians to fulfill defined duties
and meet performance objectives

These arrangements can be structured to meet many objectives, such as lowering hospital
costs, achieving operational efficiencies, improving quality and outcomes, adherence to
evidence-based medicine and increasing profitability, patient satisfaction, physician
recruitment and even emergency call coverage.

However, each component of the fee must be based on fair market value and this needs to be
documented. Compensation cannot be related to the value or volume of referral needs.
Duties cannot overlap with what others are doing, and the hospital should review its
compensation arrangements to make sure this is not happening. Responsibilities have to be
clearly defined and determined in advance.
For the laboratory, fresh graduates who are manning the unit should be provided proper
training and be enrolled in seminars provided by the hospital. The Chief medical Technologist
should be talked to. If he wishes to continue working at the hospital, he should be given better
incentives or given an increased salary to motivate him. For the medical team, experienced
doctors should be hired, about 4 if money should allow. These doctors would then be I charge
of 4 teams, under them would be about 2 junior doctors who are also in charge of about 3-4
fresh graduates. The doctors would be given better incentives and increased salary to avoid
them from moonlighting in other hospitals. They should also be given trainings provided by
the hospital. Better healthcare should be given to the employees so that days absent due to
illnesses will be lessened. Dr. Melo should also interact more with the doctors in the hospital
and should provide an example to how doctors should be in the hospital. The hospital should
also hire more experienced nurses. If there is no money for hiring, then the student nurses
should be guided appropriately on proper charting and managing admissions. The hospital
also needs to hire another officer in the supply office for Mr. Pons. The new employee will
learn from the retirable supply officer, so that when Mr. Pons retires, there will be a smooth
transition in authority. The hospital needs to hire a new pharmacist, should be given better
incentives so that he/she does not skip work. The hospital should hire a temporary records
officer since Mrs. Lee is still on maternity leave.

The hospital should have a main centralized goal to better the services provided by the staff
and a better interrelationship between them. The hospital should also work at providing a
better image for itself. Seminars should be given to personnel to better equip them in
handling new patients and to update them as to the new protocols. The hospital should
endeavor in providing some free services to the people so that the hospital may be better
known, such as giving medical missions in far flung barangays and conducting health
education seminars to the community.

Monitoring and Evaluating

Monitor on what is being done to pay the debt the hospital owes. Review past records and
evaluate what was done previously. Determine which laboratory tests are ordered more
frequently and the most profitable. Update the equipments doing those tests to the standards
required by the DOH. Give a memo to the chief Medtech and delegate this work to him. Hire
licensed medical technologist and not fresh graduates. Give them training if the profitable or
most frequently ordered tests require them.

Hire more doctors so that they are not overworked and stressed out. Moonlighting is okay as
long they the doctors don't compromise the quality of care they are giving to the patients.
Better yet increase their salary so they won't resort to moonlighting. Ask Dr. Melo to vacate
the staff quarters as this is for the staff and not his family.

Hire more staff to completely avoid problems in carrying out orders. Assign a nurse in charge
of students (1:5) who will closely monitor and double check if what they are doing is right.
Errors done by his/her assigned student, the nurse in charge must be held accountable for
their mistakes.

Get a list of drugs are required for emergency use and order them. Make sure they are
stocked and replaced each time they are used. Hire a new supply officer and pharmacist.

Hire a new or substitute records officer. Evaluate methods that is being done currently and
replace them with a more streamlined method in order to lessen back log and improve


Systems Theory or Approach would be the best choice in organizing the hospital. First, Dr. Melo
must be open to his new environment. This means that he should be permeable to the
suggestions or recommendations coming from the experts. He should scan and assess first his
new environment. Second, the hospital must be viewed as a whole organism with different
subsystems that act interdependently. He should assess each subsystem/department and view
the hospital as a whole to assess its overall status. Third, he should establish a dynamic
interaction with each department since they are all interconnected. Ultimately, an
organization/hospital has its unified goals. Next, the goals in each department or the hospital
itself should be contingent and should be negotiated in each department. After all, there is no
“one best” way to organize each department. Dr. Melo must remember the principle of
Equifinality which provides that all ways of organizing are not equally effective. Furthermore,
separate goals in each department must be set gearing to the main goal of delivering quality
and excellent services to the patient and his family. The departments should be informed that
they don’t act in isolation, every change or problem in each department will affect the hospital
directly or indirectly. Dr. Melo must also recognize feedbacks, be it positive feedback or
negative feedback. Lastly, he must also remember that an organization has a tendency to
rundown, deteriorate and move towards disorganization once he fail reassess/monitor his

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