MASSACHUSETTS GENERAL HOSPITAL: CABG Surgery (A)

Today, governmental, corporate and individual customers increasingly are resisting insurers' attempts to pass on rising healthcare costs. Healthcare providers' costs meanwhile are escalating in the face of an aging population, expensive technologies and therapies... Both payers and providers must determine their true competencies and find ways to remain profitable despite leaner margins. In 1994, Massachusetts General Hospital (MGH), with its $1 billion budget and its dozens of thousands visits per year, is urged to find a new business model to resist cost pressure… In other words, how MGH could lower its costs while enhancing the quality of care provided?

Financially speaking,
One way to do it is to apply Total Quality Management techniques to MGH, in a comprehensive approach: MGH would have to identify and define its processes and its areas of improvement, by creating lists of recurrent problems for each process. In brief, MGH could improve its operating processes by creating a "care path", i.e. reengineering the service delivery process to make it shorter and smoother. The aim of such an initiative is to minimize delays in the flow of interventions (rearranging sequencing and compressing time-lines), optimize resource and capacity utilization (personnel, beds…), while maximizing the quality of care (checking whether the patient is either "on the path" or "off the path" as a quality indicator).
One of the main objectives is to shorten hospital stays for instance. Another objective is to create a stable process of care flexible enough so that the medical staff can respond to every patient's individual needs. Yet, as long as the hospital changes its processes, it will also have to change its decision systems and powers accordingly so that the decision-making process is as smooth as possible. Such a care path would also require greater coordination and communication between various medical disciplines. Managing change and changing behaviors across departments would thus be a crucial part of the solution if MGH