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Published by: NACRA - North American Case Research Association
Published in: "The Case Research Journal", 2000

Abstract

Ralph Soto, Chief Executive Officer of Community Memorial Hospital (CMH), was grasping for strategies to stem the progressive decline in the hospital''s financial situation and occupancy rate. An exclusive provider contract with a rapidly growing health maintenance organization called Quick Care would have an immediate and significant positive effect on the hospital''s financial condition. Ralph accepted the contract based on the hospital''s chief financial officer and financial staff reports, without consulting the board of directors or members of the hospital medical staff. Two senior and highly respected hospital physicians learn of a contractual arrangement between Quick Care and The Hill Medical Group, a young multi-practice physician group affiliated with the hospital. Although recognizing the benefits for the hospital, a portion of the physician stakeholders viewed it as a direct threat to their practices. Pressure from the hospital''s board of directors and senior physicians meant that Ralph must also consider a long-term proposal for resolving stakeholder conflict and the hospital''s financial position.

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Abstract

Ralph Soto, Chief Executive Officer of Community Memorial Hospital (CMH), was grasping for strategies to stem the progressive decline in the hospital''s financial situation and occupancy rate. An exclusive provider contract with a rapidly growing health maintenance organization called Quick Care would have an immediate and significant positive effect on the hospital''s financial condition. Ralph accepted the contract based on the hospital''s chief financial officer and financial staff reports, without consulting the board of directors or members of the hospital medical staff. Two senior and highly respected hospital physicians learn of a contractual arrangement between Quick Care and The Hill Medical Group, a young multi-practice physician group affiliated with the hospital. Although recognizing the benefits for the hospital, a portion of the physician stakeholders viewed it as a direct threat to their practices. Pressure from the hospital''s board of directors and senior physicians meant that Ralph must also consider a long-term proposal for resolving stakeholder conflict and the hospital''s financial position.

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