CapstoneProject: Chapter 3
Universityof Miami Health System
Financialaspects of University of Miami Health System
TheUniversity of Miami Health System is one of the health carefacilities that reported a continuous increase in financialperformance prior to 2015. However, the health care system earned $77.2 million in the financial year ended 2015, which was lowercompared to an amount of $ 180.5 million that was made in 2014(Bandell, 2015). This significant decrease in profits was attributedto a decline in tuition fees paid by medical students, net patientrevenue generated from medical professional practices, and grant aswell as contract revenues. However, the health care system reported aslight increase in net patient revue generated from clinics andhospitals (from $ 953 million in 2014 to $ 1.05 billion in 2015) andauxiliary enterprise that increased to $ 117 million in 2015 from $111 million in 2014 as shown in Figure 1.
Figure1: Financial performance of UHealth System in 2014 and 2015
Allthe major competitors of UHealth System made a significant increasein financial performance in the year 2015. For example, Mayo Clinicreported an operating income of about $ 834 million in 2015, whichwas about 10 times the amount of operating income made by UHealthSystem in the same financial year (Snowbeck, 2015). In addition, thehealth care system has been reporting poor financial outcomes due tomanagement issues. For an instant, the administration reported a lossof $ 50 million in 2015, which was attributed to aggressive revenuetargets, billing problems, and unreasonable management of hospitalexpenses (Herald, 2012). Therefore, the stiff completion, coupledwith poor management practices has subjected the UHealth system tothe risk of making financial loses.
Organizationalhierarchy and structure of the leadership
TheUHealth system uses a hierarchical style of leadership, where ordersand information flow from the top leadership downwards or upwardsfrom the junior members of staff. The top most leadership position isthe office of the Chief Executive officer, which is followed by theOffice of the Chief Medical Officer, Medical Director, the DeanSchool of Medicine, Chief Information Officer, Chief AdministrativeOfficer, Chief Finance Officer, Chief Clinical Officer, and thejunior members of staff (UHealth, 2016). Although the hierarchicalstyle of leadership helps the health care system increase efficiencyin its operations, it limits the ability of the junior members ofstaff (including the health care providers) to deliver quality healthcare. This can be attributed to the fact that the junior members ofstaff operate as per the orders from the administration, which limitstheir flexibility.
UHealthprides itself with a diverse workforce that varies in terms ofgender, age, ethnicity, and skills. Besides the teaching andadministrative members of staff who take charge of differentcampuses, UHealth has a total of about 1,200 scientists andphysicians (UHealth, 2016). Health care employees working for UHealthearn different salaries as shown in Table 1.
Table1: Compensation of health care providers at UHealth
Pay per hour ($)
Source:Glass Door, Inc. (2016)
Thesalary ranges for all members of staff working with UHealth areeither within or above the market average rate of $ 7.71-$ 15.58 perhour (PayScale, 2016). Although the health care system does notprovide information about the compensation of the executive officers,it announced in 2015 that their compensation will be based on thepay-for-performance and be accompanied by a penalty program for thenegative cases of clinical outcomes (Gabino, 2015). Apart from thebasic salary, UHealth System provides its employees with a wide rangeof benefits, including retirement, education, and legal benefits.This suggests that UHealth has a competitive compensation systemcompared to market rates.
Legaland ethical issues
Thekey legal and ethical issues affecting UHealth pertain to its abilityto protect the privacy of its clients and deliver quality care byavoiding cases of medical malpractices. The health care systemexperienced a serious incident of a data breach that resulted in theloss of privacy of about 13,074 patients in the year 2013 (Sinha,2016). UHealth was fined about $ 100,000 and paid $ 90,000 in theform of tourney’s fee. The incident of physical abuse, where aregistered nurse and a doctor accused their supervisor of strikingthem, with the objective of silencing them about the issue ofshortage of personnel, leadership concerns, and inadequate trainingdemonstrated the lack of ethics at the UHealth (Chang, 2016). Casesof medical malpractices have damaged the reputation of the healthcare system over the years (Nolin, 2012). A combination of theseethical and legal issues threatens the performance as well as thegoing concern of the health care system.
Asummary of technology and information system
UHealthsystem utilizes technology as a tool for increasing efficiency andthe quality of care. The hospital announced that it will be utilizingthe latest available technology to deliver treatment and conductclinical research, which is expected to increase efficiency in thedelivery of care and result in the discovery of the best practicesthat can help the organization meet the specific needs of itspatients (UHealth, 2016). In addition, UHealth system has a moderninformation system that helps its employees to access criticalinformation around the clock. Moreover, the health care facility hasan advanced electronic health record (EHR) that integrates thefunctions of about 65 different software applications, which make itmore efficient and reliable (UHealth, 2016).
Corporateand business strategy
Themission of UHealth is to remain a top tier client centric as well asa reliable academic and medical center (UHealth, 2016). The missionstatement targets the two areas of the hospital’s operations. Bybeing centric to patients, UHealth system focus on addressing theneeds of its clients, while the establishment of the top tiereducation center has helped the organization deliver a high standhealth care education to its medical students. The main of theUHealth is to achieve the highest level of quality and effectiveoutpatient and inpatient clinical services, which will beaccomplished through consolidation and centralization of specializedlab services (UHealth, 2016). In addition, UHealth aims to establisha leading research program at Miller School of Medicine inpartnership with other institutions in order to increase the level ofquality of service delivery.
Relationshipbetween business lines
UHealthSystem has two lines of business, including the delivery of healthcare services and education. The two lines of business are relatedand they complement each other. The delivery of health care serviceshelps student admitted by Miami University accessing free internshipand job opportunities after graduation (UHealth, 2016). Thesestudents also contribute towards the process of delivering servicesto clients, which supplements the services of the health careproviders who are employed on a permanent basis.
UHealthapply the low-cost strategy in order to attract more clients andenhance its competitiveness. This strategy is founded on the notionthat more clients will prefer a health care facility that offerscheaper services, given the current trend in which the cost of healthcare has been escalating exponentially. UHealth announced that itwould start offering a walk-in basis service at $ 10 per visit, whichis among the lowest in the region (UHealth, 2016). Additionally, themain purpose of the health care system using technology has been tolower the cost of delivering care to its clients. A combination ofcost reduction strategies has helped UHealth offer affordableservices to its patients.
AlthoughUHealth System has been in operation for more than three decades, itis still in its developing stage in the organizational life cycle.Currently, UHealth has an investment plan that will help it reachmore clients. The plan will help the system serve more patients byacquiring more health care facilities, expanding the current centers,and establishing new health care service centers. A decision to builda new health care campus at Coral Gable in 2015 is one of the latestinvestment project (Bandell, 2014). The system also acquired andrenovated a 1,088 square foot research lab with Siemens Artis Zeegoangiography system that will help it develop new treatment proceduresand deliver reliable health care services. These investmentstrategies have helped UHealth enhance its competitiveness.
UHealthapplies a combination of quality and innovative strategies to enhanceits competitiveness. The organization enhances innovation by adoptingthe latest technology. UHealth is one of the few health carefacilities with the capacity to deliver Sapien Trans-catheter HeartValve services, which is a sign of the organization’s ability toapply the latest technology in helping its clients (Bandell, 2014).The health care system has been accused of engaging in medicalmalpractices, but the decision to peg the compensation of itsexecutive members of staff on the clinical outcomes suggests that theorganization is committed to delivering quality health care as astrategy to remain competitive.
UHealthis an established health care system that combines education anddelivery of health care services as its main product lines. Thesystem has experienced a drop in its financial performance as aresult of stiff competition, poor management practices, and billingproblems. The use of hierarchical management structure allows theorganization to make faster decisions, but it limits the autonomy ofmembers of staff. Medical malpractices and failure to protectpatients’ privacy are some of the key issues that have put thegoing concern of the system at risk. UHealth uses modern technology,innovation, and expansion through acquisition to enhance itscompetitiveness.
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Bandell,B. (2015). UM profit dips in fiscal 2015. SouthFlorida Journal.Retrieved June 28, 2016, fromhttp://www.bizjournals.com/southflorida/news/2015/10/08/um-profit-dips-in-fiscal-2015.html
Chang,D. (2016). Doctor, nurse: UM administrator assaulted us. MiamiHerald.Retrieved June 28, 2016,fromhttp://www.miamiherald.com/news/local/community/miami-dade/article8081760.html
Gabino,H. (2015). UM, Jackson board OKS annual deal: CEO gets raise, newcontract. MiamiHerald.Retrieved June 28, fromhttp://www.miamiherald.com/news/local/community/miami-dade/article24874744.html
GlassDoor, Inc. (2016). University of Miami Hospital. GlassDoor Incorporation.Retrieved June 28, fromhttps://www.glassdoor.com/Salary/University-of-Miami-Hospital-Salaries-E27589.htm
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Nolin,R. (2012, January 13). Miramar teen who lost limbs wins $ 12.6 milmalpractice suit. SunSentinel.Retrieved June 1, 2016, fromhttp://articles.sun-sentinel.com/2012-01-13/news/fl-malpractice-suit-20120113_1_bacterial-infection-medical-school-medical-assistant
PayScale(2016). Home health care provider salary. PayScale.Retrieved June 28, 2016, fromhttp://www.payscale.com/research/US/Job=Home_Health_Care_Provider/Hourly_Rate
Sinha,S. (2016). University of Miami reaches settlement in patient databreach lawsuit. DataBreaches.Retrieved June 29, 2016, fromhttps://www.databreaches.net/university-of-miami-reaches-settlement-in-patient-data-breach-lawsuit/
Snowbeck,C. (2015, March 7). Mayo’s record financial results run counter tohealth care trends. StarTribune.Retrieved June 28, 2016, fromhttp://www.startribune.com/mayo-s-record-financial-results-run-counter-to-health-care-trends/295408151/
UHealth(2016). UHealth Leadership. UHealth.Retrieved June 28, 2016, fromhttp://uhealthsystem.com/about/leadership