Medcath Case Analysis

1. How does MedCath create value in its hospitals? To what extent are these techniques that could be copied by other hospitals?

The strategic goal of MedCath’s specialty hospitals was to deliver higher quality care at a lower cost structure than traditional full service hospitals. In doing so, MedCath creates value for multiple stakeholders in the delivery of Cardiovascular care.

For patients and their families, the experience in a MedCath hospital leads to higher patient satisfaction. There are fewer delays in diagnostic and treatment plans, the small hospital footprint is easy to navigate, the smaller staff size results in a more personalized treatment experience, the new facilities highlight a brand image of state-of-the art approaches to care, the length of stay in the hospital is shorter and the quality of clinical outcomes rivals or exceeds other hospitals in the community.

For staff, MedCath facilities offered a culture of excellence, cooperation and interactiveness that had not been seen in the more hierarchical staff models of traditional facilities. This culture fosters nurses, therapists and others to take ownership of the patient experience and improves staff satisfaction and performance.

For physicians, the hospitals provided value to their practice. Scheduling was easier and procedures ran on time, resulting in less lost revenue due to downtime. To the extent that patient satisfaction and outcomes remains outstanding, they accrue more patients to their practice, and thus more revenue, based upon their affiliation with the institution. Inclusion in leadership positions gives physicians both a say in the management structure and clinical pathways; this structure creates accountability with physicians to make these practices function effectively. For those physicians who are investors in the hospitals, the financial success of the hospitals themselves provides a return on investment.

For payors, the hospitals provide high quality...