1. Code Blue Health Science Edition Four
The Board
Chapter 2
Code Blue Health Science Edition Four

2. Topics Covered in Chapter 2
The beginning chapters of Code Blue focus on some of the administrative issues facing a community hospital.
Medical and technical issues will be addressed in more detail in subsequent chapters.
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3. Topics Covered in Chapter 2
Since most health occupations students are looking for careers outside of administration, some wonder why it is important to understand the business side of hospitals and other healthcare organizations.
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4. Why Study Administration?
Nurses, doctors, respiratory therapists, and so on do not operate in a vacuum.
It is necessary to work with and relate not only to other departments, but also to the administration of the hospital.
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Instructor’s Comments: Understanding how the hospital is organized makes it easier to be an effective health professional.
It can also reduce frustration that comes from working in a system one does not totally understand.
For example: What if you are a recent nursing graduate and you have been instructed by your supervisor to do something that you do not feel your are trained to do, or something that you fear might harm the patient.? Or what if you observe unethical conduct in a supervisor? Or what if you feel you are being illegally discriminated against?
If your supervisor is uncooperative, do you go to your department head, the personnel director, the administrator, or just live with the problem? Are there committees within the hospital that are designed to address such situations. If so, how do you access them?
A knowledge of how the hospital works can help you not only protect yourself, but your patients as well

5. Why Study Administration?
Many students may become department supervisors and must, therefore, work with administration in preparing budgets, hiring and firing employees, and in managing the department.
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Instructor Comments. Department supervisors of clinical departments such as Nursing, Physical Therapy, Laboratory, Physical Therapy, and so on are often chosen from the ranks of department personnel.
The technical training that one receives as a nurse does not necessarily qualify one to be a good manager. Management requires a knowledge of the principles of administration, as well as an understanding of the way the hospital is organized and operated.
Even if one does not become a department supervisor, it is helpful for an employee to understand the administrative issues his or her supervisor is dealing with.

6. Why Study Administration?
Some students may eventually move into administration as the hospital administrator or assistant hospital administrator.
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Many hospital administrators (commonly called chief executive officers) come from the ranks of hospital department heads. A number of publications forecast hospital administration as being a high demand career with many career opportunities for 21st century.
Hospital administration is a challenging and interesting career field. Pay opportunities are excellent. It is not unusual for the chief administrator of a 300-bed community hospital to earn in excess of $350,000 per year.

7. Why Study Administration?
Since the mid 1960’s, hospitals have increasingly been managed by administrators with backgrounds in business, rather than patient care.
While this has made hospitals more cost effective, this increased efficiency may have come at a cost.
Click and read bullet point 1. In the early 1960s, hospital costs began to increase at a rate that was significantly higher than costs in other industries. Many attributed this to the fact that hospitals were operated as charitable organizations, rather than as businesses. The government, unions, and business leaders started to demand that hospitals adopt a business model that they felt would make the healthcare system more efficient, and would, therefore, reduce costs.
In response to this, many business schools started training hospital administrators. Within a short period of time, hundreds of programs in hospital administration were started. Many of these were modified MBA (masters of business administration) programs.
As new graduates from these programs entered the field in the early 1970s, they replaced former administrators with backgrounds in medicine, nursing, and so on.
Some good things came from this. Hospitals did become more efficient. Many (including the author of this book) feel that the implementation of a business model has come at a cost, however. Community hospitals are more inclined to compete than cooperate, and the focus has perhaps shifted from the patient to the income statement.

8. Why Study Administration?
The health care industry is currently undergoing a major redesign.
If the healthcare industry is to regain its focus on quality, compassion, and accessibility, clinical personnel must assume a greater role in the planning and implementation of the new programs that will be needed to meet the healthcare demands of today.
Click to read bullets one and two. Add your personal observations.

9. Chapter Two – The Board Storyline
This is a short chapter that introduces several important characters. Hap Castleton, the administrator of the hospital has been killed in an airplane crash. Del Cluff, the person who was to become the controller is in the hospital, the hospital is having financial difficulties, and the board of directors must decide what to do to provide new leadership.

10. The Characters Edward Wycoff—chairman of the finance committee
What kind of person is Edward Wycoff?
Dr. Ashton Amos—Newly elected president of the medical staff
What kind of a person is Dr. Amos?
As the personalities play an important part in the story, as they do in real life, let’s take just a moment to discuss what we know.
Click to show bullet one. Edward Wycoff is the chairman of the finance committee. Ask students to give several adjectives that might describe this individual. (Possible answers: self confident, powerful, power-seeking, determined, manipulative, revengeful).
Click to show bullet two. Dr. Ashton Amos is a physician who is also president of the medical staff. Ask student to give several adjectives that might describe this individual. We don’t know a lot about him at this point, except that he is young, bright, and probably quite reasonable.

11. Board of Trustees The highest governing body in the hospital
Functions:
Hires and fires the hospital administrator
Approves the annual hospital budget
Approves the annual strategic plan
Appoints doctors to the medical staff
Approves physician privileges (procedures physicians are allowed to perform)
Edward Wycoff and Dr. Ashton Amos are both members of the board of trustees.
Click to show bullet one. The board of director is the highest governing body in the organization. It is the source of authority for everything done in the hospital.
Click to show the rest of the bullets. Read the functions of board of trustees. Additional comments might include:
The board of director hires the hospital administrator to whom everyone in the hospital reports.
The budget is the financial plan of the hospital.
Ask students if they know what a strategic plan is. The strategic plan outlines the goals of the hospital and tells how the employees of the hospital are going to reach those goals. In a well run hospital, all supervisors and sometimes many employees participate in preparing a strategic plan. Items included in a strategic plan might include: (1) increasing the quality of patient care in the hospital, (2) decreasing infections, (3) increasing they number of patients admitted, (4) improving a specific department like respiratory therapy, and so on.
A physician cannot simply walk into a hospital and begin practicing medicine. He must first apply for membership on the medical staff. When he applies for membership, he agree to abide by certain rules such as ethical conduct.
Simply having membership on the medical staff does still not mean that a doctor can start treating patients in a hospital. He must apply for privileges to do certain procedures (such as performing specific surgical procedures). In this application process he must provide that he has the training and experience to do the procedures he is applying for.

12. Brannan Community Hospital Organizational Structure
Board of Trustees
Finance Committee
Executive Committee
Medical Staff
Hospital Administrator
Medical Departments
Support Departments
The chapter mentions two committees of the board. These are the Executive Committee and the Finance Committee. This organizational chart shows these two committees.

13. Executive Committee
Conducts business on behalf of the board between board meetings
Membership:
Chairman of the Board of Trustees
Hospital Administrator
President of the Medical Staff
Chairman of the Finance Committee
Click to reveal bullet one. Since the board of trustees only meets monthly, there is an Executive Committee that is empowered to transact any important business the board is responsible for between board meetings.
For example, a physician might commit an act that should cause him to be immediately suspended from the board. Rather than wait for the next meeting of the board of directors, the Executive Committee has the ability to do this between board meetings.
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14. Finance Committee Advises the board on financial matters
The budget
The accounting system
Financial reports
Edward Wycoff is chairman of the finance committee
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Click to read bullet two and then read text.

15. Medical Staff
Consists of all physicians who practice medicine in the hospital
Dr. Ashton Amos has been elected president of the medical staff.
He represents the interests of the medical staff to the administrator and the board of trustees.
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16. Hospital Departments Hospitals are grouped into departments.
Examples include: surgery, administration, nursing, radiology, laboratory, housekeeping, finance, etc.
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For ease of management, all hospital employees are grouped into hospital departments. The manager of a department is a department head—we will discuss this job more in a moment.
Hospitals are complex organizations. A large university hospital might have fifty or more departments and 3,000 or more employees.
Peter Drucker, a famous business consultant, has said that hospitals are the most difficult of all business organizations to manage. Everyone—the hospital administrator, department supervisors, physicians, and even the employees contribute to a well managed hospital.
Understanding the roles of all the people they work with is essential for all employees, regardless of their title or technical training. That is why we are briefly discussing this in this textbook/novel.

17. Department Heads
The supervisor of a department in a hospital is referred to as a department head.
Department heads report directly to the hospital administrator, or,in the case of larger hospitals, to an assistant administrator.
A department head is the supervisor of the department. All employees of the department report to this individual. The department head is responsible for hiring and firing employees, evaluating their performance, recommending pay raises, disciplining poor performance, setting department goals, preparing a department budget, and coordinating the activities of his or her department with the hospital administrator, the medical staff, and the other the department heads of other departments. The word department head is used synonymously with the word department supervisor in this book.

18. Other Terminology
Attending Physician: The physician who is in charge of a patient admitted to the hospital.
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19. Other Terms Used in Chapter 2
Prospective Reimbursement: This is an important principle that we will discuss in some detail later in the book.
It has dramatically changed the way that medicine is practiced in the United States.
It is also one of the reasons Brannan Community Hospital is in financial trouble.
For the time being, that is all we need to know about the topic.
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20. Other Terms Used in Chapter 2
Dietary Department: The department that plans and delivers meals to hospital patients.
Chief Dietician: The head of the dietary department.
Dietician: An individual trained in the practical application of diet in the treatment of hospital patients.
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21. Career Opportunity
There are good career opportunities for those interested in hospital dietetics.
A number of universities offer degrees for hospital dieticians.
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22. Other Terms Used in Chapter 2
Double Bypass: An operation where two veins or internal mammary arteries are grafted between the aorta and a coronary artery branch to shunt blood beyond an obstruction.
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23. Other Terms Used in Chapter 2
Coronary Care Unit (CCU): The medical unit where patients with coronary (heart) diseases are treated and housed.
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24. Other Terms Used in Chapter 2
Critical Condition: The most serious classification of patient illness.
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25. Other Terms Used in Chapter 2
Emergency Call: Physicians at some hospitals are required to provide coverage of the emergency room.
These hospitals do not have full-time emergency physicians.
When a patient presents himself (or herself) at the emergency center, the doctor is called to the emergency center.
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26. Other Terms Used in Chapter 2
Life Flight: In Code Blue, a helicopter that transports patients from an accident to a hospital, or from a hospital to a more specialized hospital.
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27. Other Terms Used in Chapter 2
Managed Care: A philosophy and system of reducing healthcare costs.
MBA: Acronym for Masters of Business Administration – a general master’s degree in business.
Medicare: A Federal program to pay for healthcare costs of certain groups, including those 65 years of age or older.
Payer: The individual or organization that pays the healthcare bill. Insurance companies, Medicare and Medicaid are payers.
Click and read bullet one. Managed care is a philosophy for reducing healthcare costs. There have been many attempts to implement it for thirty years. The Patient Protection and Affordable Act incorporates many provisions of managed care. Will it be important for all healthcare providers, even nurses, respiratory therapists and so on to understand managed care? Absolutely, as it will greatly influence the way they provide healthcare to patients. We will discuss the components of managed care in later chapters, but it is an important topic, as it will significantly influence the lives and careers of healthcare students, patients, and so on for the next several decades.
Click and read bullets two and three.
Click and read bullet four. Healthcare is different from many other industries in that the people who use the products and services (patients) are not the same as the people who pay for these services. Employees, for example, do not have grocery insurance cards that allow them to buy groceries that are subsequently paid by the employer. The fact that patients do not pay for a good portion of the goods and services they use in healthcare influences cost control. When someone else pays the bill, one is not as careful in one’s expenditures. We will discuss this concept later.
The primary third party groups that pay for the healthcare of individuals are employers, Medicare and Medicaid. Employers pay through health benefits plans they offer to their employees. Medicare is a federal program that pays the health care costs of the aged, and Medicaid is a state program that pays health care costs of the poor.

28. Other Terms Used in Chapter 2
President of the medical staff: An individual elected by the medical staff to represent them to administration and the board.
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29. Other Terms Used in Chapter 2
Rounds: In Code Blue, a morning visit by a physician to his or her patients within the hospital. The term originated at Johns Hopkins Hospital, where all patient wings radiated off a central, circular hall.
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30. Other Terms Used in Chapter 2
Transportation Aide: An individual who is responsible for transporting food, supplies, and/or patients throughout the hospital.
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31. Power and Politics
In this chapter, we learn the reaction of the board to the death of the hospital administrator.
We also are introduced to power and politics in the hospital. Financial problems facing the board are also briefly discussed.
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32. Power and Politics
Selecting a new administrator may be a difficult task.
The board of trustees has at least the following five options:
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33. Option 1
Select an administrator who has been formally trained by an accredited program in healthcare administration and has prior experience in hospital management.
If the board of trustees of Brannan Community Hospital selects this alternative, they will not be able to fill the job immediately, since most experienced hospital administrators must provide several weeks notice to their current employer.
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34. Option 2
Select someone who has business experience, but no hospital experience, perhaps a local businessman or businesswoman.
The problem with this alternative is that the issues involved in running a hospital are very different from those involved in running a retail, manufacturing, or construction firm. By the time the new administrator learns the rules, the game may be over.
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35. Option 3
Choose someone from within the hospital to succeed the old administrator. This individual would have the advantage of understanding the problems of the hospital.
Department heads don’t always make the best hospital administrators, however. Many come from technical backgrounds and are inadequately trained in administration or finance.
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36. Option 4 Recruit a local physician to fill the job.
A non-competitive salary and a lack of business training are the major problems of this alternative.
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37. Option 5
Select an interim administrator to guide the hospital through the current crisis and provide the board of trustees time to find a permanent replacement.
The advantage of this alternative is that the hospital will have someone immediately to address the financial problems the hospital is having.
The disadvantage is that the interim administrator might not be as qualified as a permanent replacement, and the hospital staff will have to adjust to two administrators (the interim administrator and the interim’s replacement).
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38. Discussion Question 1
What are the advantages and disadvantages of selecting an interim administrator to run Brannan Community Hospital?
The primary advantage is that the hospital needs someone now to address the financial problems they are having; it will take several weeks or months to find a permanent replacement.
Disadvantages include the fact that an interim administrator might not be as fully qualified as a permanent replacement, and the employee staff will have to adjust to two administrators (the interim administrator, and a permanent replacement once one is found).

39. Discussion Question 2
Why did Edward Wycoff summon Dr. Ashton Amos to discuss the appointment of a new administrator prior to the board meeting?
What does Wycoff want from Amos?
Why did Dr. Amos agree to Wycoff’s proposal?
Wycoff may have felt that he alone did not have enough credibility with the board and medical staff to get them to accept his proposal that they accept an interim administrator. He probably felt that Dr. Ashton Amos is more popular with the medical staff, employees, and board, and can help him get his proposal through.
Wycoff wants Dr. Amos’s endorsement of his proposal for an interim administrator.
Dr. Amos was probably willing to accept his proposal for two reasons: (1) previous to this meeting he was afraid that Wycoff was going to bring in “one of his hired guns from New York to operate the hospital.” A temporary replacement would give the hospital time to recover from the death of Hap Castleton, while providing the time to organize the medical staff in the event Wycoff still planned a coup, (2) He probably realizes the negative impact the closure of the hospital would have. The board needs someone to run the hospital during the interim period (while a replacement is being found). Wycoff’s proposal would solve that problem.

40. End of Chapter 2