Hospital Turnaround Strategies Summary and Critique

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| Hospital Turnaround Strategies Summary and Critique | James Langabeer Strategic Management – MBA | | | | SAHAR AL-JOBURY - ESLSCA 39E | Hospitals are failing at a faster rate despite higher profitability. Leaving decisions on revenues and costs to CFOs is wrong. Through a 4-year research and analysis of hospitals and health systems with a high probability of immediate financial crisis or collapse, the author found that a common series of actions will help organizations evade collapse. Hospitals are affected by free market forces, competition and other external factors. Management and strategy are to respond creatively to such factors. How can organizations turn around their operations to become profitable? Theoretical Background on Turnarounds Organizations with negative performance have three strategic paths: closure, acquisition or merger, and turnaround. A turnaround, or the reversal of historically low financial performance, is the preferred path. To date, most researchers have taken a one-dimensional perspective of turnarounds, which is not likely to lead to long-term renewal. Their primary finding of most researchers was that cost containment and other financial strategies were the most likely strategic response to closure. A turnaround requires more effort and integration to succeed. Method: Research focused on hospitals operating today and likely will operate in the foreseeable future in severe financial distress. The sample was of sufficient size to be statistically significant. Using a specific technique, the author generated a score for each hospital. He collected financial and operating data for the sample and conducted distress calculations using the MDA model. He selected 20 with highest level of distress for analysis in the near-bankruptcy group and researched their anti-distress and bankruptcy strategies. Then divided it
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