Governance Challenges at Good Hands Healthcare

Governance Challenges at Good Hands Healthcare

The important role of the governance in healthcare cannot be under-estimated because of the impact it has on the patients’ well-being. The concerns to boost health outcomes and the publicized failures of effective governance in the health care setting, have led researchers, policy-makers, and administrators to evaluate what comprises good governance and how it can be implemented in the healthcare setting. For the past years, there have been disproportionate researches between the general corporate governance and healthcare corporate governance. In other words, many researchers have discussed what constitutes good corporate governance and to some extent, little research has been conducted on what constitutes efficient governance in the healthcare setting (Greve, 2008). As Greve puts it, healthcare sector is a complex entity that must have the best clinical and administrative practices to improve patients’ well-being. In this era, there is a growing demand and recognition that healthcare leaders must address patients’ safety and utilize resources that facilitates a good working environment. Therefore, this research highlights the empirical and theoretical literature of the healthcare governance at Good Hands. This case is designed to depict a series of governance issues for a health care company within the eldercare industry.

Good Hands Healthcare was established in 1970 as a small nursing home in Brownsville, Texas. Since its establishment, the company has created and emphasized on a strong culture that promotes quality care. Employees have worked hard to promote the wellbeing of patients and increase their satisfaction on services provided. Despite the company having a strong will to succeed in the healthcare sector, it has been faced with a number of governance challenges. In 2000, the company did not perform as expected. The company’s board of directors had become discourage by the financial and stock performance of the company. Good Hands was the subject of poor performance. After a thorough investigation of the factors that had attributed to the company’s poor performance, it was discovered that the CEO George Jackson had attributed to the decrease of performance and productivity. The organization had experienced many complaints from the patients’ families and the media. Overall, there were many incidents of poor care to the elderly. The organization was not conducting its activities as ought to and the board of directors wondered why the organization’s major competitors had increased their market share and profitability.

In response to Jackson’s assessment of Good Hands, the board of directors was concerned with the poor performance of the company. Although Jackson had a superb reputation of being an industry leader, there was a concern of whether he would revive the company’s growth. Still, Jackson’s leadership created contentious issue of whether or not the organization was managed effectively. Because of the Good Hands’ poor performance, the company was in a critical financial position and accumulated a lot of debts. The huge debts made the company to be disadvantage over its major competitors. The company had to bring some new leadership to succeed and emerge the best over its competitors as discussed by Mills & Spencer (2005).

As discussed in the case study, the board of directors emphasized the need for Jackson to bring in some unique and effectual leadership to transform the performance and productivity of the organization. Although he had a fantastic reputation of providing the best services in the elderly population, the use of nursing home care had reduced. The eldercare sector had deteriorated severely. Therefore, the company was experiencing a loss in the net income and sales growth. Despite that Jackson was a charismatic figure, the board of directors had to evaluate whether the CEO could revive the company. The board embraced the new concepts and ideas that would enhance a remarkable progress in the organization. The board proposed three strategies; whether to keep Jackson as the CEO and see how the company would perform in the coming months, asks the CEO to step down, or ask him to give up his job position, but stay as the chairman of the board.

From the case study analysis, this pamphlet affirms that the Jackson’s assessment of Good Hand’s problem was as a result of poor industry and external conditions. As highlighted in the case study, the organization was performing well in previous years, but deteriorated in 2000. The healthcare industry was subject to environmental factors. The most external factor that affected the industry was the reduction of federal funding in the eldercare sector. Despite this factor affecting the entire industry, the management team wondered why the organization’s major competitors increased their market share and profitability when Good Hands was deteriorating in its growth. Although the external factors had affected the entire industry, the government had targeted Good Hands because of its splendid reputation in the eldercare industry. The organization was among the largest companies in America, and its position attracted the government’s attention. Based on this argument, one would affirm that Good Hand was the first target or organization to be denied adequate federal funding in the eldercare sector. According to Bennington (2010), the government plays a crucial role in providing eldercare services. Now, when the government fails to provide the funding, an organization is more likely to deteriorate in its performance and productivity (Jamali, Hallal & Abdallah, 2010). Therefore, Good Hand’s performance was affected by the poor external conditions.

From the ongoing discussion in the case study, the main question is whether or not Jackson is the right person to lead a turnaround at Good Hands. In my opinion, Jackson is the right person to lead and enhance growth at Good Hands. It is paramount to note that, the CEO had led the company well until in 1999 when the financial position of the company deteriorated. The government had increased the cost of Medicare and Medicaid programs. The 1997’s efforts to reduce the funding for the elderly population created many problems at Good Hands. The company was not competent to provide quality care at affordable cost.  The decrease in the funding for the elderly care increased the health cost of the organization. Most patients could not afford the health care provided by the hospital. Despite having a strong will to succeed in the health sector, the organization could not perform well because it lacked adequate resources to achieve quality care. As a result, the company accumulated huge debts in an attempt to achieve the set goals and objectives. Considering that Jackson had led the organization for 30 years, it is reasonable to give him another chance to augment growth in the organization. Jackson had a solid background in leadership and thus, he is the right candidate to cause a turnaround at Good Hands. However, the CEO must embrace new tactics and strategies to enhance growth and productivity. For instance, the CEO must investigate how to cut medical cost without compromising quality care. He must evaluate how and why other competitors are flourishing in the industry regardless of the poor external conditions (Hillman & Seymann, 2004).

If I was the board member, I would suggest Jackson to remain as the CEO and see how the organization would perform in the coming months. With this, Jackson would be given a chance to prove his leadership expertise. To Greve (2008), competent leaders are those that learn to embrace every challenge and strive hard to become better. If the board of directors fails to give Jackson a second chance, then it would be wasting a lot of potential. Jackson would become deeply committed to his work if given a second chance to lead the organization. The CEO would have an opportunity to approach his leadership logically and thoughtfully and evaluate why the organization is deteriorating. Asking Jackson to step down would be a difficult task as this would have effect on the organization’s culture. Additionally, it would be difficult to ask the CEO to give up his position and stay as the chairman of the board. The CEO may not accept the offer and thus, step down from the company. Based on the above analysis, I would suggest Jackson to be given another chance to lead the organization with aptitude. The board may challenge the CEO to achieve some set goals and objectives of the organization. The CEO may be challenged to adopt the best leadership strategies to lead the organization accordingly.

 

 

References

Bennington, L. (2010). Review of the corporate and healthcare governance literature. Journal of Management and Organization, 16(2), 314-333. O’Donnell, P. (2011). Innovation is in for EU’s healthcare system. Applied Clinical Trials, 20(5), 24-24,26.

Greve, J. (2008). Healthcare in developing countries and the role of business: A global governance framework to enhance the accountability of pharmaceutical companies. Corporate Governance, 8(4), 490-505. doi:http://dx.doi.org/10.1108/14720700810899220

Hillman, A., & Seymann, M. (2004). Governance Challenges at Good Hands Healthcare. Ontario: The University of Western Ontario.

Jamali, D., Hallal, M., & Abdallah, H. (2010). Corporate governance and corporate social responsibility: Evidence from the healthcare sector. Corporate Governance, 10(5), 590-602. doi:http://dx.doi.org/10.1108/14720701011085562

Mills, A. E., & Spencer, E. M. (2005). Values based decision making: A tool for achieving the goals of healthcare. HEC Forum,17(1), 18-32. doi:http://dx.doi.org/10.1007/s10730-005-4948-2

 

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