Hyatt Hill Health Centre: Case Evaluation -1
Does the control mechanism ensure meeting objectives for the centre? Is the system of measurements appropriate?
Are the cost computations “relevant and accurate”?
The reason behind the establishment of HHHC was providing community-centred health care to the residents of Bedford.
The main objectives of the centre are:
Provide adequate preventive as well as therapeutic care
Do so by becoming an accepted force in Bedford community
Serve as a training ground for members of the Fowler Hospital / NYC Dept. of Health
In addition, one of the ancillary objectives of the centre was to become self-sustained over a period of time.
Management control is the process by which management ensures that people in the organization carry out organizational objectives and strategies. It includes all the devices / mechanisms managers use to ensure that the behaviour of employees is consistent with the organization’s objectives and strategies.
The features of the control mechanism of HHHC were as under: The control mechanism had financial information like – Average cost per encounter, per hour spent in seeing patient, for each practitioner Average cost of the different kinds of encounters entered on the encounter form A comparison of the actual cost to a standard cost based on the average cost, in the past, of that department Total revenues, per practitioner, and for the department
Thus the control mechanism of HHHC focus greatly on the meeting of the ancillary objective of becoming self-sufficient. It however, does not have any indicators with respect to the primary objectives mentioned above.
Therefore, it can be concluded that the control mechanism does little to ensure meeting objectives for the centre.
Appropriateness of system of measurement:
The average cost per department / physician is calculated on the basis of direct patient care hours only (walk-ins and regular appointment). It does not take into account the hours that are spent outside (indirect patient care, community development, training)
“Relevance and accuracy” of cost computations
For standard cost per visit, it takes the entire 400 hours available as direct patient care hours. The total cost of various activities like direct patient care, indirect patient care, community development, training and administration is divided by the Total available hours to arrive at the standard rate. The rate is used as the absorption rate applied for the direct patient care hours. This is not the correct way of allocation.
Suggest an alternate and hopefully superior system
Parameters that are aligned with the objectives of HHHC:
As a measure of providing adequate preventive as well as therapeutic care Hours of indirect patient care and community development along with the already measured direct patient care hours No. of walk-ins
Use of emergency room of the Fowler hospital as a substitute of family physician for therapeutic care As a measure of becoming an accepted force in Bedford community: No. of visits kept
No. of completed treatments
As a measure of training:
No. of for members of the Fowler Hospital / NYC Dept. of Health who underwent training in HHHC Measure of ancillary objective of becoming self-sustained over a period of time: To arrive at the cost per visit, first there needs to be an initial allocation of costs to various activities – direct patient care, indirect patient care, community development, training and
administration. Then the costs of indirect patient care, community development, training and administration need to be a reassignment of costs of indirect patient care, community development, training and administration. The rate derived from that can be used as absorption rate for direct patient care.