Operational Analysis of Cayuga Health System(WELL ELABORATED ESSAY ON THIS TOPIC)

What location planning strategies does the company have (process plant, product plant, or market plant)? Describe a location planning issue that the company has faced with. What solutions have they come up with and implemented? (20 points) · Product Plant & Market Plant: Cayuga Health System (CHS) is made up of two main hospitals: Cayuga Medical Center and Schuyler Hospital; underneath those two main entities lies the physician employed group Cayuga Medical Associates which is a group of multispecialty medical practices. The services offered by the health system is provided by each separate ‘plant’ and they deliver their services to the entire market. Each different ‘plant’ has their own requirements, specialization of labor, materials and equipment etc. based on the services they are providing. This type of planning results in the system’s ability to capitalize on economies of scale. Most of the organizations locations are located relatively close to one another. This is what classifies the organization as using a product plant strategy, but one could argue they also employ market plant strategies as well. This is because the health system is designed to serve a particular geographic segment of the market – the Finger lakes region encompassing Broome, Cayuga, Chemung, Cortland, Schuyler, Seneca, Tioga and Tompkins counties. Cayuga Medical Associates (the physician employed group made up of multiple medical practices) also faces very high operating costs and actually operates at a loss which is offset by the stable operating margin of Cayuga Medical Center. The main plant (CMC) and its subsidiaries produces essentially all of the organizations services to specific geographic locations. CHS also uses a very centralized approach when it comes to decision making and must be able to respond quickly and efficiently to changing market conditions, especially in the instance of expansion or downsizing. · One issue CMC has faced in the past was the inability to serve specific locations within their targeted market. In October of 2014 Cayuga Medical Center acquired Schuyler Hospital to form Cayuga Health system in an attempt to better serve the entire region in which both facilities are situated. This merger allowed the system to begin serving a larger geographic area and serve a broader population. Both organizations have been enabled to provide more efficient and effective patient care and both hospitals have realized major cost savings derived from economies of scale. The organizations have also reduced duplicative services which dramatically reduces health care costs as well as have been able to better utilize their providers time and talent which provides patients with great access to higher quality health care. Describe two quality control issues (e.g., recall ...) that the company has faced with recently. Use quality control tools (e.g., Pareto analysis, Cause-and-effect ...) to analyze those issues. (20 points) · One of the leading quality control issues seen at CMC has been misdiagnoses/physician inaccuracy, or medical errors. This has been seen mainly with medication errors or infections caused by failure to provide the appropriate care. There has also been errors caused by equipment failures, deviations from processes, product malfunctions, mismanaged care coordination etc. All of these types of errors that occur within CMC negatively impact the organization. Not only do they provide a threat to patient safety, but they also put a significant strain on the organization financially. Most recently, CMC has seen number of medical errors. To analyze these issues the Quality and Patient Safety Department has been closely tracking multiple measures and benchmarks within their dashboards. These dashboards measure multiple different sources of data, adjust for risk and test the measures against one another and other practices. CMC uses a “Plan-Do-Study-Act” effort which focuses on establishing a relationship between changing behaviors and outcomes. This model helps to impact and assess change through small and focused efforts which eventually grow into system wide changes. The first step in this process is determining the scope and nature of the error or problem, determine what changes can and should be made, understand the impact of those changes and then as those changes are made CMC collects the data and analyses it to measure whether or not those key measurements indicate success or failure. In the case of medication errors, CMC has been very closely monitoring different dosages, pharmacy requests and inventory and paying very close attention to the patients on the floors and making sure staff reviews the patients information, medication lists and doses prior to administering medications. Describe how the inventory management and control system works in the company. Describe what their holding costs are. Describe what their ordering costs are. When do they place their orders (Fixed-intervals or ROP systems)? How much is their inventory holding (dollar value or percentage of their capital)? (20 points) · CMC has to be very strategic when it comes to inventory. While overstocking ties up funds that could be allocated elsewhere, the risk of being understocked can put not only the organization, but also patients at risk. In some cases overstocking can lead to high interest on money borrowed to purchase items, depreciation of inventory, deterioration of supplies, spoilage, warehousing issues etc. These are some of CMC’s holding and carrying costs, which are directly related to physically having the medical supplies in storage. Sometimes these costs can get very high especially if the organization is dealing with high prices inventory such as top of line pharmaceuticals. CMC’s ordering costs can be considered the time and effort needed to calculate how much inventory is need, how much time it takes to prepare invoices, the time it takes to inspect the quality and quantity of good when they arrive and how long it takes to transfer and store the inventory to the right location or department. Depending on the department, there are different methods of inventory management. Some departments function on a periodic system where items are counted and tracked on a daily, weekly or monthly basis and most supplies are typically ordered at the same on a regular basis which can reduce the times for process and shipment. Other departments use a perpetual system that continuously tracks the removal of inventory so when inventory reaches a certain amount it is automatically reordered.