Case Study:
An organization attempts to innovate without Change Management
KAJANG is an area in Selangor. Over 20 percent of Kajang residents live in poverty. The hospital's need to develop a charity care policy became apparent in 2014. That year, the CEO and CFO of the hospital received a letter from the Centers for Medicare and Medic aid Services (CMS), a department within the federal Department of Health and Human Services, asking whether the hospital had a charity care policy. The letter explained that under certain circumstances, hospitals are able to classify uncollected service fees from Medicare recipients as "Medicare bad debt." Once classified, Medicare would pay those fees for its recipients, thereby increasing hospital revenue. After some political and financial analysis, it became clear that adopting and implementing a charity care policy would be advantageous to both the hospital and its patients. Hospital revenue would increase because Medicare would be paying the deductibles and co-pays for indigent Medicare patients. Residents of the community who applied for charity care would not be turned over to collection agencies for failure to pay their hospital bills. It seemed like a no-lose proposition.
The development of the charity care policy moved quickly. The development of the policy was top-down in nature, as no consideration was given to or input taken from frontline staff. Because the CEO personally met with the frontline implementers and discussed the advantages of the policy, there seemed to be a clear understanding of what was needed for effective implementation. Within weeks, a policy was developed that met the requirements of the CMS and the Hospital Board of Commissioners, as well as the needs of patients.
Admissions personnel were assigned responsibility for informing patients about the charity policy and providing them with the assistance necessary to complete the application. The business office manager and billing staff have personal contact with customers who are trying to use the policy to pay their bills.
The CEO and CFO met with the directors of both the admissions and business offices to explain the intent of the policy. The CEO expected that customers who knew they could not afford to pay their hospital bills would quickly discover the policy and take advantage of it — but that did not happen. Over the next four months, only one person applied for charity care. On the surface, it made little sense. The application form was simple. Assistance in completing the form was readily available, but still, patients were not applying for free care.
The CEO imagined that the new policy met the conditions described by the step of change management and so would move forward quickly. The new policy required very little change in process for the staff. The policy was not ambiguous, and there seemed to be no conflict present; everyone agreed with the policy. Given these factors, with little resistance and few hindrances to policy implementation, no ongoing mechanism was established to monitor the number of people applying for charity care.
With few applications being completed, the CEO began to question frontline implementers and customers about the application process. Initially, he had thought the staff were all in agreement with the new policy and that patients in need would apply in order to avoid being turned over to a collection agency; however, his interviews with the staff and patients uncovered new information. The CEO had not considered the addition of the charity policy much of a change in the operations of the admissions office. However, employees in the admissions office considered it a major change. When employees were polled, some of the reasons offered for the low number of applications included the following:
"I never think to tell people about the policy."
"I do not have time to help explain the application process."
"I do not have time to help them fill out the information."
"People do not like asking for handouts."
"I do not want to imply to people that they cannot afford to pay for medical care."
"It does not make any difference to me if they apply or not — it is their problem."
The CEO's interviews with patients also revealed information about how the implementation was
progressing. Most customers questioned had these comments:
"I did not know about the charity care policy."
"I do not see any reason to fill out the paperwork, because I do not care about being turned over to the credit bureau."
"I am not going to pay the bill, and my credit is already ruined."
"I am too embarrassed to apply for charity care, and I am going to try to pay my bills, but I know I probably will not."
Summarizing the information from all of the interviews revealed the following insights: The business office staff believed it was not their job to educate or assist customers with respect to charity care. The clerks in admissions thought the new policy significantly increased their workload. Patients required more information about the existence of the charity care policy than the hospital was supplying. Customers needed financial counseling to understand the value of applying for charity care and assistance in completing the application. The individual psychology of hospital employees influenced how they performed their roles in the implementation process.
Q1. Based on the ABOVE case, state the different types of lessons you can learn and identify that can lead to successful implementation of new policy such as the ‘charity care policy’ in Kajang hospital.
Your answer must be, typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.