Governance Challenges at good Hands Healthcare

Introduction

Good Hands Healthcare is a nursing home business operating more than 400 facilities in three areas: nursing homes, assisted living and outpatient facility, and care units for people with Alzheimer’s disease. A number of issues could be the reason behind the reduction of the organization’s performance. One of the issues encountered by the Good Hands is the decrease in the federal funding of elderly care. The healthcare industry was relying mainly on the government reimbursement services. In addition, the organization encountered increased liability due to increased lawsuits filed by patients’ families due to poor elderly care. Lack of succession plan, mission, vision, goals and objectives is another issue. Despite the poor performance of Good hands, their competitors managed to increase their profitability and market share.

Situation analysis

The financial position of Good Hands has deteriorated in the last three years and has experienced a decline in sales and net income. The company was in a critical cash position. This could be attributed to the decrease in federal funding and to the composition of the payer mix. The occupancy rate in 1999 was 86% and in the past three years, Good Hands’ percentage from each source has been about 55% from Medicaid, and 23% from private and other payors. This is one of the weaknesses of the organization because 43% of revenue is from Medicare. Moreover, the 1995 National Nursing Home Survey suggested that elderly Americans were reducing their use of nursing home care, thus the need to attract more Medicare patients.

Increased liability due to lawsuits is another external factor that affected Good Hands. One of the strengths of Good Hands is that they considered themselves as an extension of patients’ families. The Good hands culture had long emphasized that employees should treat residents as they would treat their own families and that each of the organization’s facility was similar to the family community. Good hands started to redesign several facilities to reflect he newest trend in nursing homes. The problem, however, is in the quality of staffing. 30% to 34% of the staff at a given facility was certified and skilled nursing professionals, while the rest was staff paid below the minimum wage. In addition, 98% of Good Hands’ employees were female with an average of high school education for non-certified staff. Liability is expected to reduce when good quality services are provided to customers.

One of the internal factors that cause this poor performance is the lack of succession plan and the absence of internal effort to develop leadership for the future vision. The other factor is the CEO’s personality and attitude. He considered the company as an extension of himself, which created an issue with the top management team thus; they started to play a supportive role to the CEO’s vision. Most of the board directors are related to the CEO in one way or another and he tends to favour and defend them during aggressive discussions.

Alternatives and recommendation

The organization should set realistic objectives and determine their mission and vision.

It should also increase operation revenue by attracting more Medicare patients and private payors by providing better and attractive incentives.

It should decrease liability by recruiting more qualified staff and skilled nurses to provide quality services

Expenses can be cut down by decreasing the number of nursing home facilities and purchasing of consumables, pharmaceuticals in bulk so as to pay less.

The organization’s board of management should have high transparency and trust and no relations with the employees so as to avoid bias and favoritism.

Implementation and results

The organization should set realistic goals work toward achieving the organization’s long –term objective and vision.

The organization’s performance should also be monitored regularly in order to determine the effectiveness of the implemented initiatives. A good measurement of performance is the achievement of the predetermined goals (Chong, 2008).

The organization could also attract more Medicare residents by providing better incentives and providing them with long-term care, nutritional services, rehabilitation services, speech therapy, and social and recreational therapy.

The top management should also recruit a more qualified workforce so as to ensure implementation of the best clinical practices. The recruited staff should also be skilled especially qualified nurses so as to provide patients with quality services.

The management should also cut some expenses by focusing on cost –saving models like drugs and pharmaceuticals and hiring of more clinicians and nurses.

The management should also implement initiatives to improve the safety of patients in the organization and also increase the organization’s performance.