Running head: Assignment 2: Ellen Zane – Leading Change at Tufts / NEMC 1

Ellen Zane – Leading Change at Tufts / NEMC
Lynda Walker
Dr. Laura Forbes
HSA 599
May 1st, 2013

Running head: Ellen Zane – Leading Change at Tufts / NEMC 2
The Boston area was a world-renowned destination for health care services. The Academic
Medical Centers in Boston received $2.3 billion in National Institutes Health (NIH) research grant money. Hospitals in Massachusetts accumulated large amounts of debt in the 1970’s and the 1980’s as they refurbished older facilities, expanded services, and purchased expensive new technologies. Describe the health care environment in Massachusetts. Two years after enacting health-care reform to rein in costs, Massachusetts strengthened
"certificate of need laws" that prevent hospitals and other providers from competing with high- cost, entrenched suppliers. The state now requires that ambulatory surgical centers and outpatient treatment facilities get permission from regulators before they can enter the market. Their rivals invariably lobby the regulators to block competition, and usually win. Instead of attacking the real causes of the explosion in costs -- the combination of overly generous state aid and a dearth of competition among hospitals and physician groups –
Massachusetts is vilifying prestigious, non-profit insurers, and punishing them, believe it nor not, with price controls. The combination of heavily subsidized demand and tight, over-regulated supply is a textbook formula for perpetuating the big, chronic price increases that bedevil today's health-care system. Thirty-six states, from Florida to Georgia to Washington, have similar price- inflating laws on the books. The Obama bill does nothing to eliminate regulations that effectively cartelize the market. The battle in Massachusetts may foreshadow the results of the new federal law. It threatens to mirror precisely the cycle we're witnessing in the Bay State: spiraling costs that make coverage unaffordable for both patients and businesses, followed by price controls that drive private providers from the market. www.money.cnn.com/tufts-nemc/news/economony_healthcare_reform_fortune.htm
Running head: Ellen Zane – Leading Change at Tufts / NEMC 3
Describe what was happening within Tufts / NEMC in the 1990s. Throughout the 1990’s, insurance plans merged causing increase power to the marketplace. In 1991 Massachusetts deregulated hospitals for the first time in 10 years.
Boston’s health care leaders struggled for a strategy to survive in the new environment. Mergers, closures, and conversions loomed. Tufts-NEMC was struggling, although in the 1990’s the hospital had posted gains, it was largely due to write-down assets, and not improved efficiency or an enhanced revenue cycle. Tufts-NEMC continued to produce strong programs in cancer treatment, transplant, and neurosurgery. The hospital had fallen prey to the same negative market forces that had taken their toll on other non-affiliated hospitals in the
1990s (Swayne, Linda E., Duncan, Jack W., Ginter, Peter M. P, 549).
Describe what is wrong with Tufts / NEMC by 2002 and 2003 The hospital, which this year dissolved its merger with the Rhode Island-based Lifespan healthcare network, had an operating loss of $12.5 million in the fiscal year that ended in
September 2002. When the numbers are finalized, the hospital is expecting a similar operating loss for the latest fiscal year, $5 million of which was a one-time payment to Lifespan for leaving the network, executives said. The hospital employs 3,800 doctors, nurses, researchers, and other healthcare workers, includes Floating Hospital for Children, and has 450 beds. With pressing financial issues, trustees said they were looking at hiring a non-physician, a departure from past practice. And yesterday, they did. Executives believe it is likely the first time since the hospital was created more than 200 years ago that it is being run by someone who is not a doctor. Tufts-
New England Medical Center primarily based its decision on the value it receives through the supply services offered through Novation, VHA's supply chain management company and
VHA's capabilities in consulting around cost reduction. www.thefreelibrary.com/tufts-nemc/

Running head: Ellen Zane – Leading Change at Tufts / NEMC 4
Describe the four (4) actions Zane took in her first six (6) months Tufts-NEMC medical center in Massachusetts and how Ellen Zane was tapped to become
CEO. She was able to turn the hospital around and keep it from closing, but it took a great deal of work and a number of years in order to address all the issues. The hospital is still not "out of the woods" completely, but it is once again operating efficiently and appears as though it will remain open. Possibly one of the biggest problems with the merger, however, is that health care costs in
Rhode Island overall were not similar to health care costs in Boston, Massachusetts. The billing and payment departments, which were now in Rhode Island, failed to understand why the costs in Boston were so excessive. They frequently paid out far less than what was actually billed, because they did not feel that Massachusetts health care costs should be any different from those costs in Rhode Island. No amount of discussion appeared to be correcting that problem, which meant that Tufts-NEMC was continuing to simply lose money on the merger it made with
Lifespan. Often, health care companies do not realize the need to discuss these kinds of market issues with companies with which they are thinking of merging. That can mean serious trouble for the company or companies if they do not realize the market discrepancies and differences. many people in the community were angry at the hospital for "selling out" to a company in another state, so there was a personal and patient backlash with which to contend. www.boston.com/lifestyle/healthissues/

Running head: Ellen Zane – Leading Change at Tufts / NEMC 5
Reference
www.money.cnn.com/tufts-nemc/news/economony_healthcare_reform_fortune.htm
(Swayne, Linda E., Duncan, Jack W., Ginter, Peter M. P, 549) www.thefreelibrary.com/tufts-nemc/ www.boston.com/lifestyle/healthissues/