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Copyright © 2017 by Health Professions Press, Inc. All rights reserved.

Manufactured in the United States of America by Versa Press, East Peoria, Illinois. Cover and interior designs by Erin Geoghegan. Typeset by Absolute Service, Inc., Towson, MD.

This casebook can be used alone or in conjunction with other texts. To help instructors use the cases most effectively in the classroom, the editors have prepared an instructor’s guide, Instructor’s Manual for Cases in Health Services Management, available to faculty as a downloadable PDF file from Health Professions Press (see website and address above or call 1-888-337-8808 or 1-410- 337-9585). Cases in Health Services Management can also be used in conjunction with the textbook, Managing Health Services Organizations and Systems, also published by Health Professions Press.

The cases presented in this volume are based on the case authors’ field research in a specific organization or are composite cases based on experiences with several organizations. In most instances, the names of organizations and individuals and identifying details have been changed. Cases are intended to stimulate discussion and analysis and are not meant to reflect positively or negatively on actual persons or organizations.

Library of Congress Cataloging-in-Publication Data Names: Darr, Kurt, editor. | Farnsworth, Tracy J., editor. | Myrtle, Robert C.,

editor. Title: Cases in health services management / edited by Kurt Darr, Tracy J.

Farnsworth, Robert C. Myrtle. Description: Sixth edition. | Baltimore : Health Professions Press, Inc., [2017] |

Preceded by: Cases in health services management / edited by Jonathon S. Rakich, Beaufort B. Longest, Kurt Darr. 5th ed. c2010. | Includes bibliographical


references. | Description based on print version record and CIP data provided by publisher; resource not viewed.

Identifiers: LCCN 2017008811 (print) | LCCN 2017010156 (ebook) | ISBN 9781938870736 (epub) | ISBN 9781938870620 (pbk.)

Subjects: | MESH: Hospital Administration | Health Services Administration | Total Quality Management | Organizational Case Studies | United States

Classification: LCC RA971 (ebook) | LCC RA971 (print) | NLM WX 150 | DDC 362.10973—dc23

LC record available at

British Library Cataloguing-in-Publication data are available from the British Library.


To the Alumni of the GWU MHA Program (Dedication of Dr. Darr)

To my wife, Michelle; parents Karl and Jackie;

and children, Lindsey (Dan), Taylor (Jill), Rachel (Steven), and Dallin

(Dedication of Dr. Farnsworth)

To my students, who made this work possible (Dedication of Dr. Myrtle)


Additional titles on healthcare management and administration

Managing Health Services Organizations and Systems (Sixth Edition)

Ethics in Health Services Management (Sixth Edition)

Climbing the Healthcare Management Ladder: Career Advice from the Top on How to Succeed

Superior Productivity in Healthcare Organizations: How to Get It, How to Keep It (Second Edition)

Becoming an Effective Leader in Healthcare Management: The 12 Essential Skills (Second Edition)



About the Editors Contributors Preface Acknowledgments Introduction


1 Carilion Clinic Alexandra Piriz Mookerjee and Kurt Darr Led by a new CEO, the efforts of a mid-Atlantic acute care hospital to develop a vertically integrated, clinic-driven health services system result in allegations of antitrust, excessive healthcare costs, disruption of physician referral patterns, and use of harsh collection practices, all of which cause a negative reaction in its service area.

2 Flu Vaccine Mary K. Feeney and Abigail Peterman Flu vaccine shortages in 2004–2005 caused by a major manufacturer’s problems with quality control result in federal and state efforts to secure supplies of the vaccine and raise public policy and resource-allocation issues that users can role-play in three scenarios.

3 Merck’s Crixivan Kimberly A. Rucker, Nora G. Albert, and Kurt Darr A pharmaceutical manufacturer encounters significant negative stakeholder reaction to its introduction of a new medication for the human immunodeficiency virus despite having met expectations for clinical rigor and carefully assessing stakeholders and the external environment.


4 Pineridge Quality Alliance: A Case Study in Clinical Integration and Population Health Tracy J. Farnsworth A new CEO urges his board to move toward becoming an accountable care organization and promoting regional population health, which demands choosing among three common approaches to navigating the challenges and opportunities of developing a clinically integrated network.

5 Hawaii Health Systems Corporation: The Politics of Public Health Systems Governance Earl G. Greenia A healthcare executive facing continual public policy restructuring of Hawaii’s Health Systems Corporation must develop strategic options for his board to consider in response to this environmental uncertainty.


6 Riviera Medical Center Michael J. King and Robert C. Myrtle The CEO of a 350-bed hospital explores strategic alternatives to enhance its financial situation and reputation by asking the hospital board to approve a worksite wellness program to be marketed to area companies to improve workers’ health and decrease employers’ healthcare costs.

7 Edgewood Lake Hospital: Leadership in a Rural Healthcare Facility During Challenging Economic Times Brent C. Pottenger, Douglas Archer, Stephen Cheung, and Robert C. Myrtle The new CEO of a 30-bed, not-for-profit rural hospital faces a turnaround situation to make the hospital profitable after 3 years of losses. Problems include challenging payer mix, employee overstaffing, and difficulty recruiting physicians.

8 Klamath Care: Targeting and Managing Growth and Company- Wide Development Tracy J. Farnsworth, Leigh W. Cellucci, and Carla Wiggins


The CEO of a growing system of urgent care centers recounts the organization’s development over a decade while considering strategies and options for future growth in an increasingly crowded marketplace with an analysis that uses financial, market share, and demographic data.

9 Hospital Consolidation Tracy J. Farnsworth This case focuses on the relationship healthcare providers have with their local and regional markets and the need to balance organization and community interests when making decisions that affect the healthcare marketplace.

10 Service Area Management Tracy J. Farnsworth Users are challenged to analyze, prioritize, and use disparate information common to a dynamic and competitive healthcare marketplace as part of an organization’s strategic planning and marketing processes.

11 Western Healthcare Systems: A Healthcare Delivery Continuum Robert C. Myrtle Western Healthcare Systems was creating an integrated delivery system when an opportunity to acquire a large multispecialty group arose, but it may be imprudent to proceed because of hospital and multispecialty group physician resistance.


12 Hartland Memorial Hospital: Part 1, In-Box and Prioritization Exercise Kent V. Rondeau, John E. Paul, and Jonathon S. Rakich The VP for nursing services of a 285-bed for-profit hospital must decide what actions to take regarding her in-box, which includes e- mail, correspondence, and phone messages that communicate various challenges, such as two angry nurses, a wandering patient, staff shortages, and increasing numbers of OR infections. Emphasizes priority setting, decision making, and delegation.

13 Bad Image Radiology Department


Kurt Darr Management of a community hospital is unwilling to recognize and address major problems in its radiology department, which is directed by a radiologist whose disruptive behavior and preoccupation with income and stock market speculation have diminished the quality of radiograph readings with tragic results.

14 Westmount Nursing Homes: Implementing a Continuous Quality Improvement Initiative Kent V. Rondeau The future of a total quality management initiative is threatened when the CEO has to overcome more than the expected barriers and pitfalls in a chain of seven nursing homes and the initiative becomes entangled in negotiations with the union representing nurses.

15 District Hospital: A Lesson in Governance Cynthia Mahood Levin and Kurt Darr A tax district community hospital has major problems with its governance structure because of historical animosities among internal stakeholders, medical staff politics, weak and ambivalent senior management, and a disruptive member of the medical staff who has ambitions to attain major power in the hospital.

16 Restructuring Decision Making at Holy Family Hospital: Overcoming Resistance to a Shared Governance Program Kent V. Rondeau A change initiative introduced to democratize decision making and improve clinical care in a healthcare organization is met with staff suspicion, derision, and resistance.


17 Attica Memorial Hospital: The Ingelson Burn Center Bonnie Eng-Suess and Robert C. Myrtle After the merger of two hospitals, planning must include how to consolidate duplicated services and realign units, including a burn center, while considering the center’s financing and community and organizational impact.


18 Pediatric Dental Care Center Eleanor Lin A not-for-profit pediatric dental care center that has struggled financially for years as it serves a Medicaid population is offered the opportunity to become part of a federally qualified health center, but to do so requires expanding services and significantly changing its governance structure.

19 Radical Innovation on the Idaho Frontier: Bengal Telepharmacy Julie Frischmann, Neil Tocher, and Alexander R. Bolinger Efforts to provide pharmacy services in a rural community are successful because of creative thinking, perseverance, political deal making, and using telepharmacy in a unique and effective way.

20 Structure and Funding of Hospitalist Programs John E. Paul and Gillian Gilson Watson An academic medical center must decide how to structure and fund hospitalist services in the context of its relationship with an affiliated school of medicine; the history and content of hospitalist functions; and other revenue that might be derived from hospitalist services, even while considering several alternate strategies.

21 Appian Health Systems Robert C. Myrtle A negotiation simulation allows participants to assume union and hospital roles to work toward an acceptable collective bargaining agreement.

22 Evolution of the Healthy Communities Initiatives Barry Ross Several years after initiating healthcare services for diverse, underserved communities, hospital leadership is planning how to take its activities to a level with greater impact and sustainability.


23 Hospital Software Solutions (A) Elizabeth M. A. Grasby and Jason Stornelli A software company supplying information technology services to


Ontario (CN) hospitals has an ill-defined structure and controls that frustrate a new employee with conflicting demands from the firm’s managers, including expectations inconsistent with her job description.

24 The Case of Tim’s Last Years Kurt Darr and Carla Jackie Sampson Declining physical health forces an accomplished retired professor to enter a life care community in which his diminished independence leads to conflicts with management and staff even as further health problems result in an apparently willed death.

25 Autumn Park Cara Thomason Embry and Robert C. Myrtle The executive director and the director of assisted living in a community for independent and assisted living must resolve a disagreement as to the appropriate level of care for a difficult resident.

26 Appalachian Home Health Services Kathryn H. Dansky A not-for-profit home health agency faces a controversial choice after learning its best applicant for a nursing position is a convicted felon, and a review by management shows more widespread problems with recruitment and staffing.

27 Suburban Health Center Bruce D. Evans and George S. Cooley The supervisor of the suburban branch of a city health department faces problems with an insubordinate and possibly incompetent nurse, even as the lack of authority and inadequate support from superiors are complicated by the absence of employee performance evaluations.

28 Team Building: From Success to Failure in 24 Hours Cherie A. Hudson Whittlesey What starts as a highly successful team-building exercise becomes problematic when one physician challenges the process and forces the facilitator to consider underlying issues and then devise responses


that will preserve team cooperation.


29 Ethics Incidents Kurt Darr Twelve mini-case studies cover the spectrum of administrative and clinical ethical issues, from conflicts of interest to dishonest contractors and from infection control to advance medical directives.


Administrative Ethics Incident 1: Borrowed Time Incident 2: ED Repeat Admissions: A Question of Resource Use Incident 3: The Administrative Institutional Ethics Committee Incident 4: Bits and Pieces Incident 5: A Potentially Shocking Revelation Incident 6: Intensive Care Unit Dysfunction

Clinical Ethics Incident 7: Protecting the Community Incident 8: Decisions Incident 9: The Missing Needle Protector Incident 10: To Vaccinate, or Not Incident 11: Demarketing to Avoid Bankruptcy Incident 12: Something Must Be Done, But What?


About the Editors

Kurt Darr, JD, ScD, LFACHE, is Professor Emeritus of Hospital Administration, and of Health Services Management and Leadership, Department of Health Services Policy and Management, School of Public Health, The George Washington University. Dr. Darr holds the Doctor of Science from The Johns Hopkins University and the Master of Hospital Administration and Juris Doctor from the University of Minnesota. His baccalaureate degree was awarded by Concordia College, Moorhead, MN.