Booth bartolozzi balderston booth robert md

For the exclusive use of S. Reddy, 2016. 9-607-152 REV: MARCH 11, 2010 RICHARD M.J. BOHMER ROBERT S. HUCKMAN JAMES WEBER KEVIN J. BOZIC Maanaging g Ortho opaediccs at Riittenho ouse Meedical Cen nter Neeela Wilson, COO C of Ritteenhouse Medical Center (R RMC), mulled d over the reequest she had just receiv ved from Dr. Robert Booth h, the hospitaal’s Chief of Orthopaedic O S Surgery. Thou ugh Booth hiimself was not n employed d by the hosp pital, he had asked that th he staff nursees and techniccians who wo orked with him—all h of whom w were hospital h emplloyees—be given a signifiicant, merit-b based pay inccrease for th he coming fisccal year 2007.. In making this t request, Booth B knew that t the staff members wo orking with other o surgeon ns were slated d to receive on nly a modest increase. As such, he was requesting sp pecial consid deration for the t members of his operating-room teaam. His ratio onale was sim mple. His stafff was integrral to the efficciency and qu uality of the care c he deliveered. They were w intimately y familiar wiith his uniqu ue approach to t knee replaacement surg geries and wo orked with him h in the op perating room m as a highly y-integrated team. t Ceentral to Bootth’s approach h to knee replacement was the belief thaat performing g a high volume of proceedures using highly standardized practices served the t best interrests of patieents. Booth viiewed volum me and stan ndardization as essential to increasin ng the speeed with whiich he comp pleted proceedures. Whereeas the typicaal orthopaediic surgeon miight completee a routine kn nee replacement in one-to o-two hours, Booth would d consistently y take less th han 30 minuttes. Nevertheeless, he coulld not achiev ve such speed d without hiss dedicated staff, who weree paid, in his view, at or below b market level. Simplly put, Dr. Bo ooth was conccerned he wou uld soon lose his staff. Wilson did nott take Booth’ss request ligh htly. She had recently reviiewed a copy y of Pennsylvaania’s first-eever report ca ard on hip an nd knee replaacement and was w pleased to see that RM MC had been n well rated in the reporrt, largely due to the perfformance of Booth B and hiis partner, Drr. David Nazzarian (Exhib bit 1). No onetheless, it would not bee easy for Wiilson to acced de to Booth’s request. The orthopedic seervice at RM MC was divideed into two groups g of surg geons; the facculty practice— —comprising g faculty emp ployed by thee medical sch hool for which h RMC served d as a primary y teaching insstititution—aand Booth’s private practiice called Boo oth Bartolozzzi Balderston Orthopaediccs (3B Ortho)). The formeer was the kiind of diverssified faculty y practice found at teaaching hospiitals through hout the Un nited States, with responsibilities forr teaching and d research, ass well as patieent care. The latter was com mprised of hiighlyfocuseed surgeons who treated d a high volu ume of patieents with a liimited numb ber of orthop paedic ______________________ __________________________________________________________________________________________________ Professo ors Richard M.J. Bo ohmer and Robertt S. Huckman, Jam mes Weber, Senior Researcher, R Globall Research Group, and Kevin J. Boziic, M.D., Assistan nt Professor in Residence, University of California San Francisco, prepared this case. Certain n details have been n disguised. HBS cases c are develop ped solely as the ba asis for class discussion. Cases are no ot intended to serv ve as endorsementss, sources of primaary data, or illustraations of effectivee or ineffective man nagement. ght © 2007, 2009, 2010 President and Fellows of Harvarrd College. To ord der copies or requeest permission to reeproduce materialss, call 1Copyrig 800-545--7685, write Harvarrd Business Schooll Publishing, Boston n, MA 02163, or go o to http://www.h hbsp.harvard.edu. No part of this pub blication may be reproduced, stored in a retrieval sysstem, used in a sp preadsheet, or transsmitted in any form m or by any mean ns—electronic, mecchanical, photoco opying, recording, or o otherwise—with hout the permission n of Harvard Busin ness School. This document is authorized for use only by Surender Reddy in 2016. For the exclusive use of S. Reddy, 2016. 607-152 Managing Orthopaedics at Rittenhouse Medical Center conditions and did not carry formal teaching responsibilities. Beyond 3B Ortho’s track record of efficiency and quality, the practice was also highly profitable for the hospital. Nevertheless, Booth’s proposal would slightly increase the hospital’s labor costs. More importantly, Wilson knew that paying the staff working with 3B Ortho’s surgeons differently from those working with the faculty surgeons might cause tensions within the hospital. Rittenhouse Medical Center In FY 2006, RMC had net patient revenue of over $335 million. It had roughly 350 beds and 20,000 inpatient admissions annually (Exhibit 2). The hospital provided a full range of diagnostic and therapeutic services, teaching, and research. Its major service areas included obstetrics, orthopaedics, and various surgical specialties. For the better part of two centuries, RMC had been committed to training new physicians and other medical professionals and, as of 2006, remained among the leading hospitals in the United States in terms of education, research, and patient care. As part of its commitment to medical education, RMC offered residency programs to train new physicians in several clinical areas. The nursing and technical staff at RMC were not unionized. Throughout the 1990s, hospitals in the United States faced significant financial pressure due to declining reimbursements from managed care organizations and other insurers. Hospitals responded by joining forces through mergers, acquisitions, and affiliation agreements to create larger health care systems. The aim of these systems was to allow hospitals to gain economies of scale and scope so as to deliver care more efficiently and negotiate better with payers. In the face of growing financial pressure in the mid-1990s, RMC became part of an integrated health system that included two other hospitals and a major medical school in the greater Philadelphia region. In addition, the system owned several primary care and specialist physician practices, as well as home care and hospice services. Orthopaedics at RMC Orthopaedics was the branch of medicine dealing with the diagnosis and treatment of disease and injury to the skeletal system and related structures such as muscles, tendons, and ligaments. A significant portion of the orthopaedic procedures performed at RMC were total replacements of hip and knee joints.