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Rush-Presbyterian-St. Luke's Medical Center
Author(s):
Young, David W.
Functional Area(s):
   Management Control Systems
Setting(s):
   Healthcare Management
Difficulty Level: Advanced
Pages: 15
Teaching Note: Available. 
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First Page and the Assignment Questions:
Right now, it seems like I’m worried about everything. Before, all I had to worry about was whether or not we had our number of bed days filled. Now, I have to worry about how much toilet paper we use, what medicines my doctors are prescribing, whether they’re using 10 sutures when they could be using five, a name brand antibiotic rather than a generic one, etc.
Eventually, I’ll also be expected to worry about our payer mix. I would never do this because of my ethics, but sometimes I think we should tag all of the patients and say, Mrs. Jones has a red tag so we can keep her longer, but Mrs. Smith has a white tag so we have to get her out quickly.

George D. Wilbanks, M.D., Chair of Obstetrics and Gynecology at Chicago’s Rush-Presbyterian-St. Luke’s Medical Center, and Chair of the Department of Obstetrics and Gynecology at Rush Medical College, was pondering his new managerial responsibilities. He was especially concerned about the additional level of accountability he would have under the Medical Center’s new budgeting approach, and he wanted to identify the processes he would have to manage to assure a successful effort.

BACKGROUND

Rush-Presbyterian-St. Luke’s Medical Center had a long history. Rush Medical College was over 150 years old, and was actually incorporated several days before the City of Chicago. Presbyterian and St. Luke’s were two very old and established hospitals in Chicago that merged with Rush Medical College in the 1960s to form Rush-Presbyterian-St. Luke’s Medical Center, or “Rush,” as it frequently was called.

In 1992, Rush was the largest academic medical center in Chicago. Its downtown campus housed a 912-bed tertiary care hospital, a 176-bed rehabilitation facility, and a health university that comprised four colleges: Rush Medical College, the College of Nursing, the College of Health Sciences, and the Graduate College. In 1991, these four colleges enrolled 1,228 students in several health fields, ranging from medicine to health care administration. In addition, in the fall of 1991, there were 447 residents and 97 fellows enrolled in graduate medical education tracks.

In addition to its downtown campus, the Rush system contained two community hospitals, a staff model HMO with 150,000 members, an IPA-model HMO, a PPO, and a for-profit subsidiary that was involved in a variety of different ventures including home health care, home pharmacy, and the operation of eight occupational health centers. Total operating revenues for 1991 were over $733 million, and total assets as of the end of 1991 were approximately $900 million. . . .

Assignment

  1. What is Rush’s strategy? Please be as explicit as possible. How has the strategy evolved over the past few years?
  2. How have responsibility centers been designed at Rush? Specifically, what kind of responsibility center is the Women’s and Children’s Hospital? What kind of responsibility center is a section in the W&C hospital? An operating (nursing) unit? Are there other responsibility centers? Are the responsibility centers well designed?
  3. What factors can cause W&C to come in under or over budget? Please be as specific as you can in identifying these. What role can each of the participants on the team play in managing those factors? Are any factors left unmanaged?
  4. What should Dr. Wilbanks do?