For Office Use: Grade WRITTEN ANALYSIS AND COMMUNICATION INDIVIDUAL ASSIGNMENT NO- 02 Case Analysis Report On The

e Quality Improvement Customers Didn SUBMITTED BY Name: Suprav Talukdar Roll no: 121354 Section: C Institute of Management, Nirma University Date of submission: 14TH August 2012 EXECUTIVE SUMMARY The report highlights the decision to be made by Allan Moulter, CEO of Quality C are, a Health Maintenance Organization(HMO) which follows the staff model and is the third largest HMO in the region behind HealthCare One and MediCentres. The decision regards whether to install computerized reception system in its facilit ies. The long term objective is: i) keep the company competitive and ii) gain market leader s position. The short term objective: i) Increase employee satisfaction. ii) Not to cause dissatisfaction amon g its customers. The options are to: i) Install the computerized reception system in a) all its facilities or b) some of its facilities. ii) Install the next generation computerized reception system with artificial in telligence in a) all its facilities or b) some of its facilities. iii) Continue with the existing system. The decision is to install the next generation computerized reception system wit h artificial intelligence diagnostic programs in some of its facilities. It will give them a glimpse of the future trend in HMO, the technology s acceptance among i ts customers and its profitability in terms of revenue and increased customer an d employee satisfaction. If not found economical then Quality Care can take corr ective actions in terms of rejecting the system and accepting the basic computer ized reception system or going back to its existing system.

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SITUATIONAL ANALYSIS Quality Care, which has affiliated hospitals and health clubs and has got tie-up s with corporate entities, is the third largest HMO in its region behind HealthC are One-the market leader and MediCenters. Its strategy to remain effective and competitive in the market is open communication and feedback with its customers. This culture has been instituted by Allan Moulter, the CEO of Quality Care for nine years. This has resulted in good track record of customer retention and 86% of its 200,000 customers reporting satisfied or completely satisfied by its ser vices. But this figure may be misleading. According to market research only the completely satisfied customers may be considered loyal. Also the customers may b e loyal because in healthcare sector a customer does not switch his consultant o r facilities once his treatment is underway as it may not be economically or phy

siologically feasible. Hence, it will be a mistake for Quality Care to bank on i ts existing customer loyalty and refusing to adapt to the future. HealthCare One - the market leader in HMO has begun using computerized reception system in 14 of its 22 facilities. MediCenters, the number two player, plans to install it within a short period. Hence, it can be concluded that this system i s the future as it is being trusted and implemented by the top two market player s. In this system, when the customer comes in and slides his identification card , the computer pulls the member s record and updates it by asking the customer quest ions regarding his present medical condition and reason for the visit. The compu ter then processes the information and routes the customer to the appropriate nu rse for consultation. HealthCare One has already started testing the next genera tion of computerized reception system with artificial intelligence diagnostic pr ograms which incorporates weighing machine and blood pressure instruments. The advantages of computerized/next generation computerized reception are: i) Presently QualityCare employs 3,000 employees for its 200,000 customers i.e., 3 employees to take care of 200 customers. Without any computerization this mea ns a huge workload for its employees and lots of routine work to the point of nu rses racing the patients like on a conveyor belt. Overstressed and dissatisfied employees will lead to high attrition rates and poor quality of service to its c ustomers. This system, specially the next generation one will eliminate a lot o f routine work and will free up the company s resources to give more personalised ca re towards its customers and less crowded waiting rooms. ii) A receptionist may not be equipped to understand a patient s problems and needs and direct him accordingly to the appropriate staff. Thus a patient may be unwil ling to disclose his problem properly to the receptionist. Moreover, when a rece ptionist leaves, her replacement will take time in building the trust and unders tanding of the customers. iii) At present a customer is tied down to a particular centre of Quality Care a s it is not possible for the company to physically share each customer s records acr oss all its facilities. Hence, with computerization the data of a customer can b e centralized across all the facilities through a common network. This will pres ent new business opportunities as the customer can avail its services from any o f its facilities according to his convenience. iv) This system will standardize records of the customers to be used by insuranc e companies and government agencies. The challenges in adopting this new system are: i) The perception that healthcare is a personal field and customers, specially s enior citizens may resist the change to computerization. But then again all tech nologies, like- refrigerators, modern cooking appliances, processed foods, mobil e phones, televisions, internet, etc. were looked at with scepticism by the cust omers and were thought to remove the human touch, but now one cannot imagine lif e without these technologies. Moreover, the literacy rate of USA is about 99 per cent of its total population and this country is one of the most technology frie ndly country. ii) Adopting this system will entail a total physical redesign of its facilities , and redesign of work procedure across the vertical and horizontal level of emp loyees. iii) Adoption of this system will cost the company a minimum of $350,000 which i s about 4.3% of its net profit for the past year. This additional cost, although relatively small compared to revenue, may erode the cost competitive edge it ma y have over other HMOs. Now, Allan Moulter has to decide whether to continue with the existing system. I f not than he has to decide how to implement the computerized reception system a nd whether to go for its next generation one.

PROBLEM STATEMENT The problem faced by Allan Moulter is whether to go in for modernization and if yes then to what degree and to what scale. OBJECTIVES The long term objective is: i) keep the company competitive and ii) gain market leader s position. The short term objective: i) Increase employee satisfaction. ii) Not to cause dissatisfaction among its customers. OPTIONS i) Install the computerized reception system in all its facilities. ii) Install the computerized reception system in some of its facilities. iii) Install the next generation computerized reception system with artificial i ntelligence in all its facilities. iv) Install the next generation computerized reception system with artificial in telligence in some of its facilities. v) Continue with the existing system. EVALUATION OF OPTIONS Option i and ii: Since data of customer behaviour towards the computerized syste m is not available to QualityCare, it may conduct a customer and employee survey of HealthCare One. However, since Healthcare One is using this system in 14 of its 22 facilities and is also testing the next generation of the system, the sys tem must have been effective and customers and employees must be favourable towa rds this system. Option iii and iv: The next generation system has artificial intelligence which incorporates weighing scale and blood pressure measuring instrument and thus can reduce the routine work of nurses significantly. The advanced system will also produce standardized patient records for use by insurance companies. It can also be used by nurses and physicians for their notes on patients thus, streamlining follow up care. But since customer response and the data on effectiveness of th is system is not available, QualityCare can implement this on a pilot basis in s ome of its facilities. Option v: To preserve the human touch factor in healthcare QualityCare may conti nue with its existing system and not implement the computerization. However, thi s option will not be able to keep the customers satisfied since, employee satisf action will reduce in the present system and attrition rate among employees will be higher leading to poor service to customers. DECISION The decision is to install the next generation computerized reception system wit h artificial intelligence diagnostic programs in some of its facilities. If the future lies in next generation system then it is not economical to invest in the system and then having to upgrade it to the next generation level within a shor t period. Moreover this decision meets both the long term objectives and the fir st short term objective (Exhibit 1). PLAN OF ACTION i) Get regular feedback from customers regarding the user friendliness of the te chnology and the ways to improve it and customize it. ii) Get regular feedback from employees regarding the effectiveness of the techn ology in reducing their workload and providing them with more time for personal care towards their customers. iii) Keep the option of providing a receptionist for those customers who are dis inclined to use the technology but at the same time highlight the effectiveness of this system. CONTINGENCY PLAN If the next generation system is found to be unprofitable and/or rejected by the customers/employees then the original version of the computerized reception sys

tem should be implemented by Quality Care but only after doing a thorough custom er and employee survey of HealthCare One and Medicenters regarding the effective ness and utility of the system and analysing its effect on the operations and pr ofitability on these two companies. If the report is not in favour of the comput erized system, then Quality Care should continue with the existing system but sh ould hire more staff to reduce the workload of its employees and retaining its c ustomer loyalty. EXHIBIT 1: Objective vs Options Long Term Objective i Long Term Objective ii Short Term Objective i Short Term Objective ii Option i x x x Option ii x x x Option iii x x Option iv x x x Option v x

UNDERTAKING I, SUPRAV TALUKDAR, hereby declare that this assignment is my original work and is not copied from anyone/anywhere. If found similar with sources, I take comple te responsibility of action taken thereof by WAC team. Signature SUPRAV TALUKDAR ROLL NO.121354 SECTION C