Hospital Organizational Structure
Does Your Organization’s Form Follow Function?
Peter Drucker, the Dean of Management Consultants once said, “Hospitals are the most complex social organizations ever designed by man.” We agree with Dr. Drucker—except for the “designed” part. That is part of the problem. Most hospital organizations were never designed. They just grew over time.
Today’s hospital must be able to effectively plan, direct, organize and control resources. Most importantly, it must have the ability to react quickly when changes occur. If the hospital’s structure contains too many layers, or if there are span of control issues, it will not be able to do so.
Genuine and potentially very significant opportunities to increase net revenue and reduce expenses are available to hospitals that act to reorganize business lines, realign reporting relationships, and rethink corporate structures. Current and projected revenue and expense trends have created a perfect storm that makes taking action critically important.
Although opportunities will vary from hospital to hospital, nothing prevents many hospitals from spinning off corporate entities unencumbered by the hospital’s cost structure. A wide variety of carefully-selected existing and new outpatient services could be outsourced to those entities, potentially at lower and more competitive costs. It goes without saying that any potential corporate restructuring must be carefully evaluated to determine the net cost, accessibility, and quality benefit to the organization and to the community served. We will apply recognized organizational design principles to evaluate the structure of new or existing healthcare delivery organizations. Click on the symbol on the lower-right corner of each box in the example to expand or collapse the view.
If you would like to arrange a video conference to discuss this with your senior management team, select this link. We will schedule a video conference with your senior management team to help you determine if our services are a good fit for current priorities.