IOE 421 Team Paper 2
Internal Analysis
Team 11 Top Tier Consulting
Brian Cohen
Gopinath Jayaprakash
Matt McGill
Ariella Rose
Zakir Tyebjee
Yang Zhou
2013/12/6
EXECUTIVE SUMMARY
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St. Vincent Medical Group (SVMG) is a Catholic organization of physicians in Indiana
who work for St. Vincent Hospital, a member of Ascension Health, with the purpose of
providing “holistic care which sustains and improves the health of individuals and communities.”
SVMG is a service organization with a core technology of medical services. SVMG will fall into
the “Service Shop” sector of Schmenner’s Service Matrix and uses Engineering technology in
Perrow’s framework.
SVMG uses a matrix formal organizational structure with dimensions of medical
directors and operational directors. While this structure is advantageous for horizontal
communication, the structure is designed for uncertain environments that are not consistent with
the stable environment of SVMG; thus, SVMG operates its departments under a mostly
mechanistic structure.
The culture of SVMG is based on the assumptions of the Hippocratic Oath and the values
of Catholicism. In the Dennison model, SVMG fits a bureaucratic culture. Leaders of SVMG
tend to fit into the Guardian Supervisor or Protector Kiersey Sorter personality, showing care for
others, dislike of change, and dedication to tradition of religious culture. The power structure is
mostly bureaucratic and the Rational Model is used for conflict resolution. The matrix structure
thus emphasizes flexibility and not the more structured bureaucratic elements of SVMG’s
culture.
Top Tier Consulting recommends that SVMG stress the importance of the new internal
technical communication system to improve all types of communication. SVMG should move
toward a hybrid structure of geographical and functional structures to better fit the stable
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environment and bureaucratic informal structures while achieving coordination, separation of
expertise, and reduction of complications between leadership.
BACKGROUND
St. Vincent Medical Group is a work organization that exists under the St. Vincent
Hospital in Indiana, which is a part of Ascension Health, the largest Catholic health system in the
United States. Formed in July 2010, SVMG is an internationally recognized comprehensive
network of primary and specialty care physicians [1]. Together with their local healthcare
facilities, including 20 St. Vincent Health hospital ministries, SVMG physicians provide
healthcare to residents in thirty-five counties across Indiana [2]. The boundary between SVMG
and Ascension Health exists to serve the state of Indiana. For the purposes of this analysis, the
boundary of the system is SVMG. SVMG encompasses 850 physicians, other providers,
administrative positions, and operations positions, offering multiple levels of organizational
layers. That being said, SVMG is a focused group within the large operations of the St. Vincent’s
health system [1].
The purpose of SVMG is to serve people by providing “holistic care which sustains and
improves the health of individuals and communities” [2]. The customer is any person requesting
medical care. These customers need to be diagnosed and treated, so that they leave the hospital
feeling better than when they arrived. As stated on its website, the following statement of the
mission of SVMG expresses to stakeholders what the organization stands for:
Rooted in the loving ministry of Jesus as healer, we commit ourselves to serving all persons with
special attention to those who are poor and vulnerable. Our Catholic health ministry is
dedicated to spiritually centered, holistic care which sustains and improves the health of
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individuals and communities. We are advocates for a compassionate and just society through our
actions and words [2].
The goals of future accomplishment of SVMG include providing “high quality, full integrated
care at the lowest cost” [2].
Using Quinn’s Competing Values Framework, SVMG’s business strategy can be
described as Internal Process Emphasis, which is defined by an internal focus and a controlled
structure. The Internal Process Emphasis primarily focuses on stability and equilibrium, with a
secondary focus on information management and communication [3]. SVMG is already a
wellestablished group with high effectiveness throughout the state of Indiana; thus, the group is
focused on maintaining this effectiveness, and continuing to perform and provide high value to
their patients. However, SVMG must lean slightly toward the direction of thinking externally on
Quinn’s Competing Values Framework due to environmental trends. Using Miles and Snow
strategy typology, SVMG’s main focus is on stability and efficient control of the internal
workings. SVMG’s goals emphasize high quality and low cost, which classifies SVMG into the
Defender strategy. The Defender is well established, has a low need to change, and has a low risk
tolerance, but SVMG is not purely Defender because it needs to be adjustable to certain
environmental trends.
The environment surrounding SVMG is complex, with key influential sectors including
technology, government, market, and human resources. Technology is essential for providing
medical services, information management, and communication. SVMG must stay up to date
with research and training into new technologies. The government creates regulations dictating
operations, such as the Patient Protection and Affordable Care Act. These regulations often take
a long time to be formed and completed, but SVMG must be able to adjust when they do occur.
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SVMG must attract and retain customers from the market by being aware of social trends in the
customer base and increasing their exposure. Employing highly qualified individuals is also
essential for SVMG’s success. Recruitment is mostly accomplished by maintaining their
excellent reputation and offering beneficial student fellowship programs. On a broad scale, based
on Duncan’s framework, the environment is stable because the need for medical services will
always exist and the trends discussed are often slow to change. Also, as discussed, many
dissimilar elements of the environment exist. Therefore, the environment can be characterized as
low-moderate uncertainty and SVMG’s strategy follows this classification. However, SVMG
must stay aware of the environmental trends that do exist and obtain feedback from external
stakeholders on effectiveness.
Using Porter’s Competitive Framework, SVMG’s mission and environment can be
viewed by the analysis of five forces: new entrants, power of suppliers, power of buyers, threat
of substitutes, and rivalry among existing competitors [3]. New entrants are not of particular
concern for SVMG because the environment and competitors are relatively steady. Suppliers are
important for technology, but also for human resources to treat patients. SVMG must use
effective recruitment programs such as student fellowship in order to attract the best available
professionals. Buyers are important as defined as the customers seeking medical attention.
SVMG must maintain customer satisfaction based on service and fulfillment of needs, while also
attracting new customers based on reputation and leading in technical and social trends.
Substitutes are not of particular concern as healthcare systems are well established and personal
healthcare is not in threat of being accomplished by different means. Mostly, SVMG must stay
up to date with new technology and implement it into their systems. Rivalry is important as
many other hospital systems exist in the area, but SVMG relies heavily on its reputation for
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excellent, spiritually centered, and holistic care. Porter’s analysis shows that SVMG uses a
Differentiation approach with a broad competitive scope of all individuals and communities,
along with a unique competitive advantage focused on spiritually centered, holistic care [2].
TECHNICAL SYSTEMS ANALYSIS
The core technology of SVMG is medical care. SVMG has implemented, and is working
to further implement, an internal communication system as well as a decision making system.
Both of these two technical systems help SVMG provide the best possible medical care while
operating within a realistic budget. Physicians must regularly make complex decisions that have
a significant impact on the life of their patient and the reputation of SVMG. Therefore, SVMG
must ensure that their physicians are in the best possible position to make efficient and effective
decisions. To do this, SVMG has implemented a well-structured physician governance model
that allows physicians to be in control of technical decisions while also providing them with
support structures to deal with the complexity of these decisions. Through this governance
model, SVMG attempts to use technology, data, and analytics to reduce the amount of time
physicians spend on trivial activities, such as entering patient data, and to maximize the amount
of patient-physician interaction. Ultimately, more patient-physician interaction allows the
physician to gather more information from patients, which results in more informed and effective
decision making [2].
SVMG is considered to be a service organization because they provide medical services
to patients. SVMG operates within the Personal-Interactive section of the Mills and Margulies
Typology of Service Organizations; this section contains several important aspects that must be
maintained for quality patient care. One of these aspects is high information quality, which
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SVMG attempts to maintain by using analytics and good quality data, as well as a new electronic
health record that SVMG has recently purchased. The physicians can exploit these methods to
access more accurate and meaningful data in real time without the presence of the patient. Client
feedback is another important aspect of quality patient care, as shown in Thompson’s
Interdependence Classifications. In hospitals, there is reciprocal interdependence between all
components of the process, which requires a lot of communication [3]. SVMG is attempting to
resolve slow client feedback by a movement toward more maintenance-interactive systems.
These systems allow physicians to monitor patients remotely and allow patients to express their
opinions and concerns regarding their care, pain levels, and symptoms. This will ultimately
create real-time client feedback in every aspect of a patient’s visit to a SVMG hospital.
According to Schmenner’s Service Matrix, hospitals fall into the Service Shop sector,
with a high degree of interaction and customization, and with a low degree of labor intensity [3].
This high degree of interaction and customization requires a large labor force because each
patient must be attended to by at least one employee. The low degree of labor intensity forces
these interactions to be with highly skilled and trained individuals such as doctors and nurses;
this thus requires SVMG to constantly staff doctors, nurses, practitioners, and other trained
professionals in every section of their hospitals.
Trained professionals demand high salaries, and coupled with continuous staffing, SVMG
operating costs can rise quite high. To reduce these expenses, SVMG is currently looking to
move toward a lower degree of interaction and customization in several ways. The first way
SVMG can lower costs is by developing systems to decide who should interact with a patient
based on that patient’s needs. If a decision only requires the expertise of a nurse rather than a
physician, then a nurse can be sent to interact with the patient which in turn can lower the
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operating costs without sacrificing the level of patient care. This patient receives the same
amount of interaction and customization, but the service is provided through a care team rather
than a single physician. The second way SVMG is moving toward a lower degree of interaction
and customization is through technology. The aforementioned new electronic health record
system includes a patient portal, which allows patients to access their care and information via
computer. In some situations, remote monitoring allows the patient to receive care information
without requiring a trip to the hospital, which ultimately saves money for both the hospital and
the patient. Finally, SVMG is utilizing technology through Telemedicine, a service that provides
teleconferencing capability between physicians and patients, while providing patients with
remote access to global experts. Although the main goal of SVMG is to provide healthcare,
operating costs are factored into any decision that is made within the organization. These
methods and the technical systems that have been put in place attempt to reduce costs by
decreasing unnecessary interaction and customization while maintaining high quality patient
care.
The Perrow model can be used to characterize the technology used by SVMG [5]. This
framework analyzes the activities performed and the variation of tasks. SVMG experiences a
high variation of tasks throughout the work that they perform and the physicians encounter
numerous unique patients that require distinct treatment plans; outside of patient care, doctors
encounter daunting documentation and administrative tasks. The tasks that the physicians
perform are analyzable, as the physicians must use patient information to decide the treatments to
provide and the tests to run. The physicians analyze many symptoms and problem solve when
caring for a patient, which ends up being quite complex. Due to this analysis, the technology of
SVMG is proven to be classified as that of Engineering.
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FORMAL ORGANIZATION ANALYSIS
The SVMG formal
Figure 1
organization structure
resembles that of a dual
authority matrix, which
focuses on both the
organization’s service and
function; the SVMG structure
combines patient care and
daily operations of the
hospitals. The hierarchy is a
management team consisting of the Chief Executive Officer and his co-executives. The structure
is then split into matrices where physicians and administrative employees report to two different
leaders. These two leaders are the regional medical director and the director of regional
operations. Reporting to two management positions creates the dual authority shown in Figure 1.
In this structure, horizontal linkages exist between and within physicians and administrators. The
conditions of SVMG parallel two of Daft’s conditions for an organization that would benefit
from adapting a matrix structure. According to Daft, a matrix structure is useful when “there
exists a pressure to share scarce resources”, and “there is an environmental pressure demanding
more than one critical output” [5]. Physicians can sometimes be scarce, as they require much
training and are being shared across different patients and emergencies. The environmental
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pressures demand SVMG to provide high quality healthcare at a competitive price point. The
definition of quality healthcare, the output, is complex and can change on a case by case basis.
According to Daft’s third condition, a matrix structure should be used in a complex and uncertain
environment. SVMG, however, has been identified to operate in a low-moderate uncertainty
environment. The matrix structure of SVMG thus does not match the environmental demands.
SVMG uses a mostly mechanistic structure, corresponding to its Engineering
classification in the Perrow framework and thus characterized by moderate formalization [5].
SVMG has moderate formalization mainly because patient safety is of the most importance.
Generally, procedures must be standardized, but because all patients are different, not all aspects
of patient care can be addressed by formal procedures. Moderate centralization also takes place
in SVMG as the physicians are the only experts about their patients and have some personal
discretion over their care, though larger decisions are centralized higher up in the vertical
hierarchy. In addition, formal training is necessary in a mostly mechanistic structure, as there are
many complex tasks to perform and the physicians are all highly trained in their areas of work.
This mostly mechanistic structure is effective for SVMG because it applies best to engineering
technologies, which is the technology that SVMG is centered around.
Within SVMG, each subspecialty (cardiology, pulmonology, radiology, etc.) and each
physician have a forum designated to them. In general, a subspecialty forum is focused on
educating the employees within that forum about topics specific to their subspecialty. Regional
forums also exist to concentrate on multi-specialty improvements, technological advancements,
and other aspects that involve multiple subspecialties [1]. According to Thompson’s
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Interdependency Classifications, this coordination between departments and regions is an
example of the coordination required for the reciprocal interdependence of the hospital [3].
INFORMAL ORGANIZATION ANALYSIS
Culture
SVMG holds a core set of values, guiding beliefs, and understandings that are shared by
members of the group, and gives members a collective identity to help them work together
effectively. These values and beliefs define the underlying culture and are centered on the
organization’s religious roots as a Catholic health ministry of St. Vincent DePaul in France [1].
St. Vincent vested a fundamental belief in helping the poor by using protection from the
powerful to relieve their suffering [6]. The Catholic values can be found in SVMG’s mission
statement, where the phrases “loving ministry of Jesus as healer,” “Catholic,” and “spiritually
centered” are emphasized. Additional core values include “service of the poor through generosity
of spirit for persons most in need, reverence through respect and compassion for the dignity and
diversity of life, integrity through inspiring trust and personal leadership, wisdom through
integrating excellence and stewardship, and dedication through affirming the hope and joy of the
ministry” [2]. In addition to the written Catholic values, the Hippocratic Oath that medical
students take upon graduation influences the unspoken culture which includes the right to
privacy and the importance of prioritizing the health of the patient. The underlying culture of
SVMG unites employees despite the presence of subcultures, which still exist from the original
partnership of separate practices and specialty groups.
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SVMG’s culture also contains organizational rites and social consequences. Firstly, the
rite of passage is observable when members retire and new members join and proceed through
the onboarding process. Doctors are continuously training medical fellows and can also be
rewarded through the rite of enhancement when fellows come together to give an award to the
doctor that has made the largest impact on them and provided the utmost amount of guidance;
this award ultimately enhances the social identity and reputation of the doctor. Additionally, the
rite of integration exists as the group holds an annual Christmas party for all members of the
organization. This integration encourages and revives common feelings that bind members
together and commits them to the organization [4].
In regard to the observable culture, visible artifacts are apparent in the SVMG logo,
which includes the spiritual symbol of the dove, and the depictions of doves along the floors of
the hospitals. Photos exist in the offices that depict nuns actively participating in patient care and
portray statues of St. Vincent DePaul. Lastly, the employees of SVMG participate in daily prayer
and most committee meetings typically commence with religious reflection or prayer.
The culture of SVMG can be analyzed using the Dennison model. The Dennison model
analyzes flexible versus controlled structures, and evaluates the external versus internal focus of
an organization. Bureaucratic culture is defined by controlled methodical approaches to business
with emphasis on high consistency, collaboration, and efficiency. SVMG supports this
definition, as there are clear policies in place with regards to patient care and employee
interaction. All employees must cooperate to support the integration and consistency of business
practices. The Dennison model also emphasizes the role of leadership in bureaucracy, which
embodies the culture of the organization [3].
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Leadership
Leadership is of utmost importance at SVMG, as the hospital serves hundreds of patients
per day. The Chief Operating Officer (COO) of SVMG, Brad McNabb, speaks strongly of the
importance of the religious culture and history of the organization, demonstrating the importance
of his role in personifying and instilling the culture and leadership principles [1].
To gauge the leadership type at SVMG, a high-ranking official, Mr. McNabb, was
estimated to be of the Guardian Supervisor (ESTJ) on the Keirsey Personality Sorter. Guardian
Supervisors are social and community-minded, which usually leads them to positions of power in
groups such as churches. SVMG complements this by being a community-minded organization
with a mission to “improve the health of individuals and communities” [2]. Guardian Supervisors
are also comfortable being in charge and prefer traditional practices, and Mr. McNabb seems
extremely comfortable in his position as COO. Guardian Supervisors are also very hard-working,
which leads them to positions of responsibility and authority.
To complement Mr. McNabb’s Kiersey Sorter type, a physician also completed the
questionnaire and received a similar classification of Guardian Protector (ISFJ) [4]. Guardian
Protectors are very concerned with the safety and security of those they care about, which fits
well in a medical profession. Guardian Protectors greatly value traditions and are not
comfortable in constantly changing environments, a great fit for SVMG’s stable environment.
Moreover, Guardian Protectors find great satisfaction in helping the oppressed or poorly treated,
which matches the mission of SVMG to “serving all persons with special attention to those who
are poor and vulnerable” [2].
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The Situational Management Model can be used to analyze the capability of employees
[3]. It requires many years of education and training to become a physician and to ensure that a
physician has received proper training, all physicians must be tested through the United States
Medical Licensing Examination. Additionally, physicians take Medical Boards, at intervals
dependent upon their subspecialty, to ensure their ability is maintained. After completing years
of education, physicians typically have a strong willingness to practice medicine; this willingness
is driven by a physician’s desire to care for and improve the health of patients. Despite other
circumstances within the organization, physicians will be able and willing to perform their
responsibilities at SVMG. Nurses may be capable, based on their level of experience, but may
not always be willing to perform their tasks. Nurses have the responsibility of performing many
tasks in the care of the patient, but may not always get the appreciation they feel they deserve. A
nurse could be willing or unwilling based on their personality and the type of physician they are
working with.
According to Mr. McNabb, SVMG does not generally face many conflicts, as all
physicians work toward a common goal to provide quality health care and to serve their patients.
All physicians share common skill sets, but also have specialties. This specialization may create
some conflict between physicians, relating to the limited resources conflict. For example, Mr.
McNabb mentioned a recent conflict did occur about equipment purchases in the SVMG
electrophysiology department. Initially, the electro-physiologists could select their desired
defibrillator and pacemaker, but now they had to settle on the equipment that was commonly
agreed upon to reduce the purchase price. When a conflict arises at SVMG, it is resolved strictly
based on the power of the physicians involved. As conflict is generally low in SVMG, this
example relates to the rational model, where the goal is consistent across participants in regards
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to purchasing lower priced items and providing quality patient care. The decision process is also
categorized as logical and power is centralized because the higher ranked physician has more
expertise than the lower ranked physician in regards to the conflict. Furthermore, the
ThomasKilmann conflict mode graph shows SVMG in compromising mode, which is a balance
between assertion (focused on satisfying oneself) and cooperation (focused on satisfying others)
[3].
Power and Politics
SVMG’s vertical power structure is mostly bureaucratic and generally follows the formal
organizational structure; however, the matrix structure does not emphasize this bureaucratic
power or the bureaucratic culture identified by Dennison. Matrix structure emphasizes flexibility
and adaptability, resulting in a complex vertical hierarchy. In this hierarchy, physicians are
directed by two different leaders, placing a lower value on the power and autonomy of the
physician, and creating unnecessary confusion during the what-should-be-more bureaucratic
decision making process. SVMG is a physician led group and the physicians do contain some
traditional power based solely on title and the habit of respecting the physician’s reputation [3].
Due to limited resources, horizontal power between physicians, equally ranked administrative
professionals, and medical departments is very important. Between physicians and administrative
professionals, physicians have significantly more power because although the administrative
professionals control financial resources, physicians are vital to the core technology of SVMG;
without physicians, the hospital cannot operate. Physicians require years of education and
training, and can only be replaced by physicians licensed in the same field; this results in a low
supply of qualified employees and makes them hard to replace. This non-substitutability shifts
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power in their favor and allows them to exercise this power over other employees who are not as
vital to the hospital’s day-to-day operations.
RECOMMENDATIONS FOR REDESIGN
Communication
The most significant area in which SVMG needs to improve is the technical system of
communication, both within the organization and with patients. With a large number of
physicians, nurses, and other staff, it is difficult to efficiently and effectively communicate
between departments. SVMG is working on improving this by implementing a new internal
communication system and electronic health record system. For these systems to be effective, the
entire staff must be able to use them. Therefore, extensive and thorough training programs must
be required for the entire staff before the internal communication systems can be successfully
implemented. Furthermore, physicians and nurses must work with patients, and perhaps provide
incentives, to encourage all patients to use the patient portal. Without participation from the
entire staff and all patients, communication and feedback will not improve.
Structure
SVMG operates in a complex, stable environment with a low to moderate level of
uncertainty and uses a matrix structure. The matrix structure is ideally suited for a complex,
unstable environment with a high level of uncertainty, but the structure of SVMG is not perfectly
matched to the environment or the bureaucratic culture. SVMG would benefit from a change to a
hybrid structure which combines geographical and functional structures that do not emphasize an
unstable environment.
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The geographical structure would encompass the hospitals in different regions of Indiana
and allow for horizontal linkages and communications between hospitals. The hybrid structure
achieves coordination both within and between regions. This would also allow the chief medical,
financial, and operations officers to communicate to the leadership at each hospital. The
functional structure would encompass all physicians in different departments and allow for
horizontal linkages and communication between departments.
Within each department, a functional structure would organize the lower-level
administrators, physicians, nurses, and other staff. At the top of this structure would be the
regional medical director and director of regional operations, respectively, who are already in
place. The regional medical director would be in charge of the medical side of hospital
operations. Within the medical side of operations, each specialty department would have a
department head, whose job it is to resolve conflicts within that department. These department
heads would ultimately report directly to the regional medical director to resolve any
interdepartmental conflicts.
The administrative side of hospital operations would have a similar hierarchy. Beneath
the regional director of operations, each administrative specialty, such as financial, legal, and
public relations, would have its own department, led by a department head. This department head
would resolve conflicts within the department, communicate horizontally with the other
department heads to coordinate activities, and report to the regional director of operations to
resolve interdepartmental conflicts.
This new system would achieve several goals. First, it would improve communication
between employees and their superiors because it ensures that employees are reporting to a
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superior who is trained in a similar area. This structure makes the new internal communication
system mentioned in the technical systems analysis more important for horizontal
communication, and ensures that employees will receive proper training to learn how to utilize
these systems effectively. Secondly, it creates a more defined hierarchy than a matrix structure,
so decision making and conflict resolution are more bureaucratic. There is one person in charge
of each department at each level, and if an issue involves more than one department on the same
level of authority, there is a single person who can solve that conflict. Finally, decisions would
be made faster in this structure because they will be made by a single person in that person’s area
of expertise rather than through coordination between two people.
SVMG would benefit from a hybrid between geographical and functional structures
because it separates the business of running a hospital system from the day-to-day medical
operations. This separation is important because the expertise needed to make decisions in each
sector is very different. However, the top leadership, which consists of both medical and
operational experts, must be able to coordinate all of the hospitals in the system. The technical
systems would be improved with this change because the communications systems would
become much more vital, and would therefore be used and emphasized more extensively. The
informal organization would be improved because conflicts would be resolved by superiors
rather than among peers, better fitting the bureaucratic and rational goal models. Furthermore,
the functional grouping of physicians together would mean that young physicians would be
mentored by other doctors and would spend almost all of their time around physicians in their
field. This would make the rites of enhancement and the awards given among physicians even
more meaningful, and promote a strong idea of community within the hospital.
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CONCLUSION
In conclusion, SVMG operates with a core engineering technology of medical services.
This technology correlates to a mostly mechanistic department structure. The culture of SVMG
is centered on the values of Catholicism and the values encompassed by the Hippocratic Oath.
Leadership roles are assumed by people who prefer tradition. Power is bureaucratic, though
physicians do assume some traditional power through their title. These very structured and stable
components are then fit into a formal organizational structure built for adaptability, change, and
dual authority. The demands of the environment are complex, but change very slowly over time
and do not require a lot of flexibility; therefore, the matrix structure is not appropriate for the
SVMG. SVMG should change to a hybrid structure between geographic and functional structure,
which will still allow for the necessary coordination and will emphasize a focus on the new
technical communication system. The hybrid structure will allow for the separation of different
functions, increase expertise in the specialized areas, and make authority and decision-making
processes more clear and structured.
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REFERENCES
[1]
Phone Interview with Brad McNabb, November 26th, 2013
[2]
St. Vincent Medical Group website, http://www.stvincent.org/St-Vincent-MedicalGroup/About-Us.aspx
[3]
IOE 421 lecture slides
[4]
Phone Interview with Dr. Julie Fetters, December 4th, 2013
[5]
Richard L. Daft, Organization Theory and Design Tenth Edition
[6]
St. Vincent de Paul Archdiocese Galveston/Houston website,
http://www.stvincentcatholicchurch.org/index.cfm?load=page&page=191
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