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Transformational Change in Healthcare

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Transformational Changes in Healthcare: Two Case Studies
Patrick Chapman
MHA 601
Professor Sherrie Lu
November 29, 2010
Transformational Changes in Healthcare: Two Case Studies
The economic downturn has led healthcare organizations to think big changes. We understand that all organizations experience micro changes in their normal adjustments to operating; however, occasionally a unique climate comes together to force new ways of thinking. This new way of thinking is usually a whole novel vision and an entire new direction which “transforms” the organization. When successful, these organizations become a learning experience for other organizations that perhaps need to make similar changes. This paper discusses two …show more content…

According to its website, Henry Ford Health System now manages six major hospitals with 102,000 inpatient admissions, over 80,000 surgeries, and 3.1 million patient contacts including outpatient (“Henry Ford Health Systems,” 2010). Palm Drive Hospital in Sebastopol, California near Santa Rosa opened in 1941 with 15 inpatient beds and later made expansions in 1974 and 1991 to reach the current licensure for 37 beds. The small community governed non-profit hospital is supported by tax revenues and serves a community of about 8,000 people (“Palm Drive Hospital,” 2010).
Both of these hospitals had community leaders who cared about their future and were willing to invest community resources for a transformational change. During Valade’s tenure as Chairman of the Board at Henry Ford Health Systems, the Board of Directors invested over $1 billion dollars in new innovated projects and expansions of their hospitals. “Despite the poor economy, it maintained its Standard and Poor’s A rating and Moody’s A1 rating, increased its market share by 37 percent since 2005” (Welch, 2009). Dan Smith, a community leader, was the director of strategic planning in the community of Sebastopol, California. He noted that the hospital was on the brink of total collapse being unable to pay its bills. His bank stepped in and guaranteed a loan of $600,000 to the hospital (Hixon, 2008).
The issues that surface during the transformation change at Henry Ford Health Systems were

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