Introduction

This paper strives to answer questions based on the case study “Emanuel Medical Center: Crisis in the Health Care Industry”. As excerpted directly from the case study, Mr. Robert Moen, Emanuel Medical Center (EMC) president and CEO, was experiencing a number of challenges in 2002. The medical center faced numerous challenges in its external and internal environment. First, EMC garnered an onslaught of negative attention for the “Haley Eckman incident” in which a young man, who happened to be a gang member, died within view of EMC’s Emergency Department (ED) medical personnel rendered no care and watched. The emergency department at EMC was also experiencing greater pressure to deliver services in an increasingly …show more content…

However, the flipside is that the Emergency Department still generated nearly 50 percent of EMC revenues. Lastly, Moen could choose to do nothing at all, continue to try and maintain the status quo and continue wrestling with the hospital’s myriad operational issues. The status quo is challenging to say the least as EMC’s problems are systemic in nature. First, the company has a long-term funding crisis. Previously the organization was able to reinvest into expanding and periodically restructuring its business plan as the market dictated. EMC’s current tight operating margins do not allow for this. Therefore, its facilities are aging and its patient capacity dwindling. This invariable leads to gaps in service, as the unfortunate Eckman case illustrates. Although the number of fully-insured patients is growing incrementally, it still sits at a paltry 49 percent of admissions to the ED. This further exacerbates the funding crisis as most other patients are unable to pay for the cost of their treatment.
The most pressing operational issues President Moen faces The first issue is funding. The government and insurers are employing their buying power to reduce payouts and operating costs are increasing. In short, this creates an ever-widening gap between EMC revenues and costs. Secondly, as mentioned earlier, is the chronic nursing shortage. This increases the organization’s turnover rate, which in turn increases costs to recruit