Capstone Research Project


University of Miami Health System

Wendy Chalssaint

HSA 4938

Dr. Mitchell

Palm Beach State College

July27, 2016

University of Miami Health System Introduction

The University of Miami Health System, also known as UHealth, wasstarted in 1952.

UHealth is the only University health care system located in SouthFlorida (UHealth, 2016). The health care system was founded by theUniversity of Miami, which implies that its establishment cannot beattributed to any individual person. The UHealth system is comprisedof three university-owned medical centers (including the Universityof Miami Hospital, Anne Bates Leach Eye Hospital, and SylvesterComprehensive Cancer Center) that operate under the Leonard M. MillerSchool of Medicine.

The major events that have occurred at UHealth indicate the progressthat the health care system has achieved over the years. For example,the UHealth system opened the world’s largest neurological injurycenter in 1985 (UHealth, 2016). The aim of this center was to curespinal cord injuries and paralysis that results from the breakdown ofthe neural systems. The system opened a clinical research andwellness center in 2006, with the objective of enhancing the researchefforts and the overall quality of health care. In 2009, the UHealthstarted a project for the construction of a mega biomedical researchcenter in Miami, which was expected to have modern laboratoryequipment and house the human genomic and stem cell institutes(UHealth, 2016).

The UHealth system has been offering the same range of services toits clients since its foundation in 1952, which indicates that it hasnot revolutionized is products. The health care system was started toserve three purposes, which include the delivery of general patientcare, education, and research (UHealth, 2016). The research projectsundertaken by the system are intended to enhance the quality and notto introduce new products into the market.

Some of the key competitors of UHealth System include UF HealthShands Hospital, Mayo

Clinic Jacksonville, and Florida Hospital Orlando among others.

Statement of The Problem

From its mission statement, the UHealth system holds that it existsto deliver medical care that meets the highest level of quality(UHealth, 2016). The achievement of such a goal can be confirmed bythe number and the severity of the complaints raised by clientsregarding the quality as well as the satisfaction that they get fromthe health system. Unfortunately, the number of patient complaintsassociated with malpractices has remained steady, while the severityof medical malpractices has increased exponentially (Nissim, 2016).For example, the system was fined $ 12.6 million in 2012 when a teenlost a limb following the malpractice by the health care providers(Nolin, 2012). Therefore, the malpractices associated with thedeployment of unqualified medical staff have reduced the capacity ofUHealth to deliver quality care. The proposed study will examine thepossible alternatives (such as employment of exemplary students whograduate from the system’s educational program) to reduce medicalerrors and malpractices.

The UHealth System holds and diligently provides timely care, mindsthe welfare of other stakeholders, and respects the client’sprivacy, physical and emotional needs (UHealth, 2016). The capacityof an organization to protect the privacy of clients in the digitaland the information eras is confirmed by the level of vulnerabilityof its electronic data systems. However, UHealth has beenexperiencing cases of identity theft over the years. For example, thesystem lost health records of an undisclosed number of patients in2014 (Freeman, 2014). Therefore, the lack of adequate internalcontrols has reduced the capacity of UHealth to keep its core valueof confidentiality. The proposed study will discover the keyalternatives (such as encryption) that can be used to safeguardhealth records at UHealth.

Research questions

Question 1:

Given the exponential increase in cases of medical malpractices, willUHealth system be able to deliver quality health care?

Question 2:

Given the increase in cases of data breach that have resulted in theloss of health records, will UHealth be able to protect the privacyas well as the confidentiality of its clients?


Hypothesis 1:

The present decline in the level of quality of health care servicesoffered by UHealth system can be attributed to the deployment ofunqualified health care providers. These cases of medicalmalpractices occur when physicians or nurses are assigned roles thatare beyond their qualification, which increases the risk of medicalerrors. It has been reported that the health care system has beenexperiencing an increase in the costs associated with litigations andmedical negligence (Nissim, 2016). By conducting a study that willprovide research based information about the causes of malpractices,UHealth will be able to develop strategies (including the recruitmentof more competent health care providers) that will help it minimizecases of medical malpractice.

Hypothesis 2:

The current risk of data breach at UHealth can be attributed the lackof adequate internal controls that would be expected to ensure thatall confidential data is only accessed by authorized persons. Themanagement of UHealth reported that the health care records that werebreached in 2014 had not been considered to be at risk (Freeman,2014). By studying the causes and the impact of data breach on thecompany, adequate information will be availed to guide the UHealth onthe effective internal controls that can help the organization inprotecting electronic records.

Research significance

Demand for quality health care services has been increasing with time(Nahata, Ostaszewski&ampSahoo, 2015). The future competitiveness ofany health care organization is based on its capacity to deliverquality care, which can only be achieved if the organization managesto reduce cases of medical malpractices. However, the capacity of ahealth care organization to deliver quality care consistently dependson the qualification of its health care providers. The proposed studyis significant because it will reveal the key factors that result inmedical malpractices and a decline in the quality of care, which willhelp the management develop effective solutions.

Purpose Of The Study

The primary purpose of the proposed research is to investigate anddetermine the key factors that have contributed to the increase inthe number and severity of medical malpractices at UHealth. A clearidentification of these causes will inform the process of developingalternative solutions that the management of UHealth can use toenhance the level of quality and lower the number as well as theseverity of cases of medical malpractices. This implies that the keygoal of the proposed study is to help UHealth pursue its mission ofdelivering the health care services that are of the highest level ofquality.

Data Collection

The proposed study will be based on a qualitative study design.Qualitative study is preferred to other types of research designbecause it allows the researcher to conduct an indepth assessment ofthe problem being studied (Turner, 2010). The data will be collectedby reviewing relevant research articles and credible websites thatprovide useful information regarding the topic of study. The “keyword” search technique will be used to find articles online. Someof the key words that might be used include “medical malpracticesat UHealth”, “client complaints at UHealth”, and “data breachat UHealth” among others.

Chapter Summary

The University of Miami Health System, also known as UHealth, hasbeen operating for more than six decades. The operations of thishealth care system can be grouped into the provision of patient care,education, and research. The mission of UHealth is to deliver thehighest quality of health care, but the lack of competent health careproviders has limited its capacity to achieve this mission. Inaddition, the health care system is guided by the core value ofconfidentiality, but the increase in cases of data breach indicatesthat it lacks adequate controls to safeguard its health care records. A qualitative study will provide reliable information that can beused to address the key challenges affecting the health care system.

Chapter 2 Introduction

This paper will focus on two leadership theories that shed light onthe leadership qualities that University of Miami Hospital’sexecutives lack transformational, and transactional leadershiptheories. Additionally, it will conduct a comparative analysis of howthese theoretical concepts apply to Pungo District Hospital, andultimately, University of Miami Hospital where I currently work. Thispaper employsPungo District Hospital as a yardstick because it is oneof my company`s greatest competitors. Furthermore, Pungo DistrictHospital recovered from the same management problem University ofMiami Hospital is currently experiencing, which means that it canprudently follow suit. In conclusion, this paper will examine theviability of applying the same solutions to University of MiamiHospital’s problem.

Section I

Transformational Leadership Theory

It is the opinion of Kotlyar and Karakowsky (2007) that forming ahigh-performance workforce has become increasingly important in anybusiness. Therefore, to create a high-powered workforce, leaders mustbe in a position to inspire their team members to go beyondperforming their contractual obligations. The theory oftransformational leadership was formulated by leadership expert JamesMcGregor. McGregor defined transformational leadership as a processwhere leaders and their subordinates raise one another to higherlevels of motivation and morality (Huber, 2014). According toMcGregor, a transformational leader sets clear goals, encouragesothers, has high expectations, provides support whenever necessary,and inspires people to reach for the unattainable. A transformationalleader is daring, thoughtful thinker, inspiring, visionary, andrisk-takers. Therefore, transformational leadership creates dynamicand valuable change in people within an organization with the aim ofcreating a leader out of a follower (Bass &ampAvolio, 2014)).

Transactional Leadership Theory

It is the opinion of Antonakis and House (2014) that a transactionalleader is the type of leader that works by generating precisestructures whereby the subordinates are made aware of what isexpected of them, and the rewards they get for adhering todirectives. Punishments for any deviation from the expected norms arenot always outlined, but it is well understood that formaldisciplinary actions are taken against those that go againstorganizational protocols. Transactional leadership is the process ofdirecting and motivating subordinates through appealing to theirself-interest. A transformational leader believes in motivating hisor her subordinates through a system of rewards and punishments(Kotlyar and Karakowsky, 2007). When a transactional leader delegateswork, the subordinate is considered entirely responsible for it.Therefore, when things go wrong, the subordinate is consideredresponsible for the fault and is punished accordingly for his or herletdown.

According to Smith (2014), effective leadership is one of the mostimportant elements that underwrite the success of an organization.University of Miami Hospital is not generating money as it issupposed to, stemming from leadership inadequacies. Because of a lackof effective leadership, University of Miami Hospital’s servicesare rated below average since there are no management-set protocolsor standards that synchronize the organization`s objectives with theactivities of its human resource. Sincethe University’s Hospitalservices are perceived sub-standard, it has lost most of itscustomers to its competitors, which translates to a reduction inrevenue all because of ineffective leadership.

Section II

Comparative Company Analysis

In its 2010 fiscal year, Pungo District Hospital (North Carolina)went through the same predicament as University of Miami Hospital. Inthis year, Pungo District Hospital had 11 million dollars inexpenses and 9.9 million dollars in revenue. Moreover, in its 2011fiscal year, Pungo District Hospital had 9.7 million dollars inincome and 10.98 million dollars in expenses (Huber, 2014). Thisinstitution, just like the University of Miami Hospital, was slowlylosing its financial grip because of a decrease in the number ofindividuals it attracted owing to the low quality of healthcareservices they provided which occasioned the economic catastrophe inPungo District Hospital`s financial bag. In pursuit of restoring theinstitution`s financial glory, the hospital`s board decided to seekfor a helping hand from a third party. In 2011, the hospital`s boardapproached Vidant Health, then known as University Health Systems(UHS), to discuss issues about taking over the hospital.

The negotiations transpired over three years, but in 2014, VidantHealth managed to take over the running of the institution. The firstthing Vidant Health did was a system overhaul (Antonakis and House,2014). They conducted a human resource evaluation drill which sawmany redundant executives dismissed. The leaders that proved to beproactive were retained but were trained on how to developtransformational and transactional leadership qualities since it isthe lack of these qualities in its executives that placed PungoDistrict Hospital between a rock and a hard place in the first place.Ever since these human resource changes were implemented, thesituation at Pungo District Hospital has upgraded financially.

This narrative is relevant to this study because Pungo DistrictHospital`s story is relatively similar to University of Miami’sHospital narrative. Both these institutions lost their financialglory because of ineffective leadership. To turn the situationaround, Pungo District Hospital had to overhaul its executive humanresource. The redundant leaders were sent packing, while those thatproved to show signs of activity were retained and trained on how tobecome transformational and transactional leaders that would direct,motivate, and reward their employees for outstanding performance.From my point of perspective, I am of the opinion that thissolution`s application is viable in my institution`s problem. We arecurrently experiencing financially crippling times, but I firmlybelieve that a complete overhaul in my organization`s top executivesmight provide my system with an opportunity of restoring itself toits initial financial position.

With an adjustment in leadership strategies, University of MiamiHospital will have standardized protocols and systems that intertwineorganizational goals with the activities of its human resourcepotentially improving our quality of services, thereby restoring mycompany`s initial financial triumph. Furthermore, training myinstitution`s executives on how to develop transformational andtransactional leadership qualities will bulwark University of MiamiHospital’s efforts to redeem itself since these “new crop” ofleaders will motivate, support, and reward us as their subordinates,which will, in turn, be mirrored by an improvement in revenuecollection. Therefore, I believe that this solution is viable andapplicable to the University of Miami Hospital.

Section III

This paper has explored the fact that for an organization to thrivein the present-day market conditions, it has to have effectiveleaders who can lead the entire team in processes of transformation.Companies have to change their strategies from time to time toconform to the current market conditions (Kotlyar and Karakowsky,2007). To implement the change process, this paper has demonstratedthat transformational and transactional qualities in a leader arevital to the success or failure of a company. Transformationalleadership approach creates a positive and valuable change in peoplewithin an organization with the aim of setting up a leader out of afollower. Transactional leadership directs and motivates subordinatesthrough appealing to their self-interest through a system of rewardsand punishments.

It is probable that dismissing ineffective leaders and training theremaining ones, including those that will be employed asreplacements, on developing the necessary leadership skills to driveorganizational change, would be beneficial to University of MiamiHospital. This approach proved to be successful in Pungo DistrictHospital`s predicament, so the same solution is applicable toUniversity of Miami Hospital. What this institution requires istransformational and transactional leaders to instigate and implementchanges that will enable it to thrive and survive in the present-dayunpredictable healthcare business.

Chapter 3: Current Company Operations

Financial aspects of University of Miami Health System

The University 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.

Figure 1: Financial performance of UHealth System in 2014 and 2015

Source: Bandell (2015)

All the major competitors of UHealth System made a significantincrease in financial performance in the year 2015. For example, MayoClinic reported an operating income of about $ 834 million in 2015,which was about 10 times the amount of operating income made byUHealth System in the same financial year (Snowbeck, 2015). Inaddition, the health care system has been reporting poor financialoutcomes due to management issues. For an instant, the administrationreported a loss of $ 50 million in 2015, which was attributed toaggressive revenue targets, billing problems, and unreasonablemanagement of hospital expenses (Herald, 2012). Therefore, the stiffcompletion, coupled with poor management practices has subjected theUHealth system to the risk of making financial loses.

Organizational Hierarchy And Structure Of The Leadership

The UHealth system uses a hierarchical style of leadership, whereorders and information flow from the top leadership downwards orupwards from the junior members of staff. The top most leadershipposition is the office of the Chief Executive officer, which isfollowed by the Office of the Chief Medical Officer, MedicalDirector, the Dean School of Medicine, Chief Information Officer,Chief Administrative Officer, Chief Finance Officer, Chief ClinicalOfficer, and the junior members of staff (UHealth, 2016). Althoughthe hierarchical style of leadership helps the health care systemincrease efficiency in its operations, it limits the ability of thejunior members of staff (including the health care providers) todeliver quality health care. This can be attributed to the fact thatthe junior members of staff operate as per the orders from theadministration, which limits their flexibility.

Human Resource Aspects

UHealth prides itself with a diverse workforce that varies in termsof gender, 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.

Table 1: Compensation of health care providers at UHealth

Job type

Pay per hour ($)

Registered Nurse


Medical assistant


Registered nurse


Physician assistant


Medical coordinator


Source: Glass Door, Inc. (2016)

The salary 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.

Legal and ethical issues

The key legal and ethical issues affecting UHealth pertain to itsability to protect the privacy of its clients and deliver qualitycare by avoiding cases of medical malpractices. The health caresystem experienced a serious incident of a data breach that resultedin the loss of privacy of about 13,074 patients in the year 2013(Sinha, 2016). UHealth was fined about $ 100,000 and paid $ 90,000 inthe form 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.

A summary of technology and information system

UHealth system utilizes technology as a tool for increasingefficiency and the quality of care. The hospital announced that itwill be utilizing the latest available technology to delivertreatment and conduct clinical research, which is expected toincrease efficiency in the delivery of care and result in thediscovery of the best practices that can help the organization meetthe specific needs of its patients (UHealth, 2016). In addition,UHealth system has a modern information system that helps itsemployees to access critical information around the clock. Moreover,the health care facility has an advanced electronic health record(EHR) that integrates the functions of about 65 different softwareapplications, which make it more efficient and reliable (UHealth,2016).

Corporate and business strategy

Mission and goals

The mission of UHealth is to remain a top tier client centric as wellas a reliable academic and medical center (UHealth, 2016). Themission statement targets the two areas of the hospital’soperations. By being centric to patients, UHealth system focus onaddressing the needs of its clients, while the establishment of thetop tier education center has helped the organization deliver a highstand health 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.

Relationship between business lines

UHealth System has two lines of business, including the delivery ofhealth care services and education. The two lines of business arerelated and they complement each other. The delivery of health careservices helps student admitted by Miami University accessing freeinternship and job opportunities after graduation (UHealth, 2016).These students also contribute towards the process of deliveringservices to clients, which supplements the services of the healthcare providers who are employed on a permanent basis.

Generic competitive strategy

UHealth apply the low-cost strategy in order to attract more clientsand enhance its competitiveness. This strategy is founded on thenotion that more clients will prefer a health care facility thatoffers cheaper services, given the current trend in which the cost ofhealth care has been escalating exponentially. UHealth announced thatit would start offering a walk-in basis service at $ 10 per visit,which is among the lowest in the region (UHealth, 2016).Additionally, the main purpose of the health care system usingtechnology has been to lower the cost of delivering care to itsclients. A combination of cost reduction strategies has helpedUHealth offer affordable services to its patients.

Investment strategy

Although UHealth System has been in operation for more than threedecades, it is still in its developing stage in the organizationallife cycle. Currently, UHealth has an investment plan that will helpit reach more clients. The plan will help the system serve morepatients by acquiring more health care facilities, expanding thecurrent centers, and establishing new health care service centers. Adecision to build a new health care campus at Coral Gable in 2015 isone of the latest investment project (Bandell, 2014). The system alsoacquired and renovated a 1,088 square foot research lab with SiemensArtisZeego angiography system that will help it develop new treatmentprocedures and deliver reliable health care services. Theseinvestment strategies have helped UHealth enhance itscompetitiveness.

Functional strategies

UHealth applies a combination of quality and innovative strategies toenhance its competitiveness. The organization enhances innovation byadopting the 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.


UHealth is an established health care system that combines educationand delivery 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.

Chapter 4:University of Miami Health System: SWOT Analysis

Health care organizations operating in the modern businessenvironment enhance their competitiveness by overcoming internalweaknesses and external threats that limit their ability to exploitthe available opportunities. The main source of difference betweencompetitive and non-competitive organizations is the ability ofindividual firms to overcome their own limitations and utilize theirstrengths to take advantage of the opportunities offered by theindustry in which they operate (Puhl&ampWoulfe, 2012). This papercontains a SWOT analysis of UHealth System, with a focus on internalstrengths, weaknesses, external environment, and macro-environmentalfactors that affect operations of the health care facility.

Internal Weaknesses and Strengths

Controlling Strengths

The UHealth System has applied some efforts to improve the process ofquality control. The objective of this measure has been to help itsclients have an access to quality health care. For example, theorganization has a peer review program, where the services offered byone health care professional are subject to a review by anotherprovider (UHealth, 2016).

Controlling Weaknesses

Although it is evident that the management has tried to enhance thequality of services, the poor financial performance, an increase incases of medical malpractices, and data breach are indicators of poorinternal control systems. For example, a fall in revenue from $ 180.5million made in 2014 to $ 77.2 million in 2015 indicates that theorganization is continually losing its productivity (Bandell, 2015).In addition, the information technology has helped the UHealth systemadopt an electronic health record technology, but this has increasedthe vulnerability of patient records to unauthorized access. Forexample, about 13,074 patients were affected by an incident of thedata breach that occurred in 2013 (Sinha, 2016). Similarly, clientcomplaints that result from an increase in cases of medicalmalpractices suggest that the health care system has failed to put inplace adequate internal controls to ensure that patients receiveservices that meet the required standards. Therefore, weaknesses inthe organizational control are the major challenges that the UHealthSystem has been facing. Weaknesses in other management functions(such as leading, planning, and organization) are directly orindirectly related to the issue of lack of adequate organizationalcontrol.


Michael Gittelman, who was appointed the COE of UHealth System in2009, brought in a leadership experience of 30 years into theorganization (UHealth, 2016). Stephen Altschuler, the vice presidentin charge of Health Affairs, has 15-years of working experience as atop leader in other health care organizations. The two executiveleaders have been effective in motivating the current workforcethrough a comprehensive compensation package. The ability of theorganizations to remain active and competitive since 1952 is anindication of an effective leadership that has been passed on fromone team to another. The current CEO and the vice president havedemonstrated their ability to lead the health care system in aneffective way. This is confirmed by the establishment of a strategicdevelopment plan that will enhance the competitiveness of theorganization through the development of new facilities and expansionof the current ones (Bandell, 2014). This demonstrates a leadershipthat is able to focus on the future of the organization. However,under the leadership of Michael Gittelman and Stephen Altschuler, thehealth care system has maintained a top-down communication systemthat limits the ability of the junior health care providers toprovide useful information that could be used to reduce treatmenterrors (Nissim, 2016). In addition, Michael Gittelman has maintaineda hierarchical leadership structure where orders and instructionsflow from the top leadership to junior members of staff. This limitsthe chances for the CEO to empower the members of staff bycollaborating with them in the process of making decisions.


The fact that UHealth System has been in operation since 1952indicates that it has a plan that has increased its competitivenessin the business environment. Through its long-term developmentstrategies, UHealth has been able to implement changes depending onthe existing market trends. For an instant, the health care systemadopted the electronic health care system at a time when the abilityof the health care organizations to compete was determined by theircapacity to deliver services in the most cost effective and efficientways (Bandell, 2014). Moreover, the strategic development plan hashelped UHealth invest in a combination of portfolios (such aseducation, research, and delivery of health care services) thatcomplement each other (UHealth System, 2016). However, there is aneed to ensure that the strategic plans take account of potentialchallenges associated with the organization’s response to ethicaland technological forces. For an instant, a plan to adopt a newtechnology should have included measures for prevention of databreach.


UHealth System has a functional organizational design that enhancesefficiency of its operations. Its campuses and internal departmentswere established on the basis of the type of functions of each unit.For example, there are units that deal with research, education, andpatient health (UHealth, 2016). One of the key benefits of this typeof organizational structure is that UHealth has been able to make anefficient use of its human resources by helping the management tocome up with job designs that focus on specialization of eachemployee. In addition, the compensation package developed by UHealthis broad and it includes a wide range of benefits, such asretirement, education, and legal benefits (UHealth System, 2016).This package has minimized labor issues (such as employee strikes)since compensation rates are market competitive. However, theorganization has not adopted a flexible culture that can help itrespond to emerging changes. For an instant, trends indicate thatthere is an increase in demand for quality services (Jamal, McKenzie&amp Clark, 2010), but the UHealth has taken a long time to containthe issue of medical errors that has resulted in litigations anddamage to the firm’s reputation.

External Opportunities and Threats

Porter’s Five Forces

Threat of New Entrants

The threat of having new health care systems entering the industryranges from low to medium. This can be attributed to the existence ofnumerous barriers, such as the high cost of establishing a new healthcare facility, low financial returns, and the shortage of qualifiedhealth care professionals (Nkomazana, Mash, Phaladze&ampShaibu,2015). However, there are new nursing homes, doctor’s offices, andurgent care clinics that are being established by individual orgroups of health care practitioners. The high cost of equipment makesit difficult for emerging facilities to offer the same range andquality of services as UHealth system.

Industry Rivalry

The threat of industry rivalry in the U.S. health care industry isquite high. Although there are only a few health care facilities thatare entering the industry each year, the existing health care systemare growing at a high rate. This growth is achieved through theestablishment of new campuses, branches, and the range of services.In the case of UHealth System, health care organizations that arebased in other states have been expanding by investing in Florida,which has increased the level of rivalry. For example, Mayo Clinicestablished a campus that is ranked number one in Jacksonville andfourth nationally in terms of medical specialties (Mayo Clinic,2016). The high level of rivalry can be attributed to the growth ofexisting health care organization as opposed to the emergence of newfacilities.

Product Substitution

The threat of substitution of health care service and products isrelatively low in the U.S. The threat of substitution was high aboutone decade ago when many citizens sourced health care services andbought prescribed drugs from foreign markets due to the high pricesthat were charged by the local health care facilities (Puhl&ampWoulfe,2012). However, this trend has changed due to the intervention madeby the government agencies, especially Medicaid and Medicare, toincrease the affordability of drugs and medical services. Moreover,the threat of formal health care services offered by modern healthcare systems (such as UHealth) being replaced by traditional types oftherapy is quite minimal.

Suppliers’ Bargaining Power

Suppliers operating in the health care sector have a mediumbargaining power. The strength of the bargaining power is attributedto the fact that each American will seek or health care services atleast once per year (Puhl&ampWoulfe, 2012). This implies thatsuppliers of products (such as drugs) will always have a ready marketfor their products. Additionally, the number of suppliers of qualityand up-to-date drugs and medical equipments are fewer than the numberof health care facilities that need them. This has given suppliers anopportunity to dictate prices for their supplies.

Buyers’ Bargaining Power

The bargaining power of customers in the health care industry is low.The industry has a large number of customers compared to the numberof health care facilities. The decision of a single customer cannotinfluence the price of services offered by health care facilities,such as UHealth (Puhl&ampWoulfe, 2012). The increase in the numberof buyers (patients) has resulted from the large number of emerginghealth conditions and the population aging. Older people are morevulnerable to diseases, which imply that the large number seniorshave increased the number of buyers for organizations operating inthe health care sector.

Macro-Environment Forces

The Global Forces

There are numerous global forces that impact the health care sector,but three of them affect health care facilities in a more significantway. The first force is the increase in the cost of delivering care,which can be attributed to the high rate of inflation and cost ofadopting new technology (Puhl&ampWoulfe, 2012). Secondly, there isan increase in the need for cooperation and partnerships amongorganizations. This creates an opportunity for the Americanorganizations (such as UHealth) to invest in the global market bypartnering with organizations in foreign countries (Jamal, McKenzie &ampClark, 2010). However, foreign health care organizations are equallylikely to invest in American and compete with the local health carefacilities. Third, there is an increase in demand for qualityservices as customers continue gaining access to information abouttheir right to excellent services.

Demographic Forces

Demographic factors affect the health care sector by eitherincreasing or decreasing the number of buyers. There are two majordemographic factors that impact the health care industry. First, anincrease in the population of the U.S. has resulted in a significantgrowth in the number of patients. An increase in the number ofclients has allowed health care facilities to set prices since thereis no single customer who can influence the market. Secondly,population aging is a demographic trend that affects the health caresector directly. By the year 2014, about 46.2 million (14. 5 % of thenational population) Americans were at least 65 years old(Administration for Community Living, 2015). The population of olderadults is characterized by chronic disease, which implies that thepopulation aging has increased the number of clients for the healthcare facilities. Most of the demographic trends will benefit theUHealth system by increasing the number of customers.

Political as well as Legal Forces

Players in the health care sector have been pressured by the need tocomply with ethical standards. This trend has resulted from thecustomer’s ability to access information about their rights and anincrease in pressure from consumer protection agencies (Jamal,McKenzie &amp Clark, 2010). This is confirmed by the large numberof lawsuits brought against health care facilities that fail toobserve ethics in their operations. Trends also suggest that new lawsare continually giving customers more power to control their health.For example, the Patient’s Bill of Rights introduced under theAffordable Care Act enhanced the stability and flexibility ofAmericans in order to help them make informed choices, which meansthat the health care facilities (such as UHealth) will have to takethe patient’s opinion into account when delivering health care(U.S. Department of Health and Human Services, 2016). Although anincrease in demand for legal as well as ethical compliance mightrequire additional resources, it presents a new opportunity for thehealth care facilities to create niches and enhance their competitiveadvantage.

Technology Forces and Change

The adoption of technology in the health care industry is inevitable.Technology is associated with a significant increase in the level ofefficiency, quality of care, and decline in the cost of servicedelivery (Jamal, McKenzie &amp Clark, 2010). Additionally,technology has allowed the health care organizations to reach morecustomers online, which is an opportunity to expand the market share.Therefore, health care facilities should consider technology as anopportunity to enhance their competitiveness by adopting the latestand the most efficient technology. However, the a failure on the partof the health care organizations can be an investment risk since itmay fail to bring the desired results.

Social Forces

The high rate of immigration has resulted in a diverse society thatis characterized by patients who come from different cultural andsocial backgrounds (American Association of Colleges of Nursing,2015). Immigration is an opportunity for the health careorganizations, since immigrants increase the number of customers.However, they create the need for employment of translators Inaddition, a large number of them lack adequate resources to pay forhealth care services.

Evaluation of SWOT Analysis

UHealth System has among the oldest and the most establish healthcare systems in South Florida, but there are several factors that arelikely to limit its capacity to deliver quality care. The lack ofinternal controls that could help the health care organizationincrease productivity of its assets, prevent data breaches, andmedical malpractices. These challenges have been attributed tounreasonable management practices. UHealth needs to adjust itscurrent organizational structure in order to enhance flexibility thatwill allow health care providers to interact with the top management.This will help the management understand factors that havecontributed to an increase in medical malpractices. Moreover, UHealthneeds to adopt internal controls that will ensure that patient datais protected. These measures will enhance the competitive advantageof the health care system since it will be able to adopt the newtechnology without suffering from its negative impacts.

Chapter 5: Summary, Recommendations, and Conclusion


This study sort to examine the factors contributing to the decliningquality of care at UHealth and propose solutions based on thefindings. The study used Pungo District Hospital as a yardstickbecause it is not only one of the main UHealth competitors but alsoone that recovered from the same predicament faced by UHealth. Duringthe study, it was established that the institution is currently facedwith the following challenges: high risk of legal litigations as aresult of personnel incompetence, the rigid organizational structurecharacterized by poor leadership style, and increased risk ofconfidential client data loss. This section will present therecommendations and the conclusions


Restructuring of the Existing Organizational Structure to suit aTransformational Leadership Style

The current UHealth organizational structure is rigid andcharacterized by transactional leadership style where orders andinformation flow from the top leadership downwards or upwards fromthe junior members of staff. While this approach has been critical inhelping the organization increase efficiency in its operations, it isone of the limiting factors towards the organization`stransformation. Furthermore, junior members of staff are highlylimited (including the health care providers) when making decisions,thus impairing the delivery of quality care. As such, It is highlyrecommended that the leadership at UHealth adopts an organizationalstructure that encourages a transformational approach to leadershipin the institution. Under this approach, leaders in the institutionmust demonstrate capabilities beyond the managerial and supervisoryskills characteristic of many leaders in healthcare institutions(Bernard, 2000). Furthermore, a plethora of studies is increasinglyfavoring transformational leadership styles as compared to thetraditional transactional leadership style adopted by many healthcareinstitutions. A study conducted by Thyler in (2003) cited in Joyce &ampTimothy 2004 reported that the healthcare transactional leadershipstyle may be causing nurses and other medical practitioners to leavethe professional because they struggle ideologically with the systemin which they work. Numerous other studies have been conductedregarding the relationship between leadership style and jobsatisfaction has similar results. This approach was adopted in PungoDistrict in an effort to adapt to the challenging operationalenvironment. Since then, Pungo has not only seen an increase inclientele, but also a significant impact on its balance sheet.

Pursuance of the Current Expansion Investment Strategy

In order to conform to the current changes in thehealthcare industry, the institution should actively pursue thecurrent expansion strategy. The number of clients will mostdefinitely increase in the near future: thus, investments such as therecent decision to build a new health care campus at Coral Gable andthe acquisition and renovation of the 1,088 square foot research labwith Siemens ArtisZeego angiography system is critical to the futuresuccess of the institution. Furthermore, such investments will helpUHealth to enhance its competitiveness.

Adoption of A Low-Cost Strategy

For UHealth to effectively compete with its rivals in theindustry, it should come up with strategies that give it acompetitive edge in the market. One such strategy is the adoption oflow-cost medical services. Under this strategy, the institution hasalready announced that it would start offering a walk-in basisservice at $ 10 per visit, which is among the lowest in the region(UHealth, 2016). Unlike other healthcare services in the region, thispackage is unique, new and highly convenient to the local members whoare constrained by the high charges offered by many healthcareinstitutions in the region. 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.

Capacity Building

When Pungo District hospital was faced with increased cases ofmalpractice, the institution’s management embarked on an expensiveyet rewarding exercise to build the capacity of its human resource.In a similar manner, UHealth should engage in an active exercise ofbuilding the capacity of its human resource. Furthermore, the recent12.6 million malpractice lawsuit calls for an immediate review of thecurrent capabilities of the institution’s human resource. HR shouldconstantly develop creative ways of building the capacity of theinstitution’s human resource. Consequently, UHealth’s recruitmentpolicy should be reexamined to eliminate any loopholes that mayresult in the admission of incompetent medical practitioners.

Total HIPAA Compliance for Better Data Protection

With the advent of contemporary technologies, patient privacy hasbecome a topic of increasing concern among many healthcareinstitutions. UHealth has experienced the challenge of clientconfidential data loss at first hand when the department ofOtolaryngology reported the loss of undetermined amount of data ofclient records (Conti, 2016). To avoid such losses in the future, itis highly recommended that UHealth should conduct an organizationaldigital audit to ensure compliance with the HIPAA security standards.As a requirement, all healthcare providers are expected to have datasecurity standards in place as stipulated in the Security ofElectronic Protection Health Information Rules of HIPAA. With theproper administrative, technical, and physical safeguards in place,future medical record losses will highly be minimized and potentialthreats will be detected early in advance (Maekawa &amp Majima,2006). Consequently, it is highly recommended that the institutionconducts regular audits to identify any possible loopholes in itsdigital infrastructure.


As one of the oldest healthcare institutions in Florida, theUHealth has been one of the most successful healthcare institutionsin the region. The institution has consistently strived to deliverthe highest quality of medical care to its patients. In addition, theinstitution has consistently reformed itself to fit into its complexand dynamic operational environment. Nevertheless, this studydemonstrated that there has been a lack of leadership in theinstitution leading to increased number of client complaints, laxityamong the medical practitioners, and higher chances of litigations.Consequently, it was established that UHealth’s medical recordsystems, which form its core, needed immediate attention. To solvethese challenges, the report recommended capacity building, theadoption of transformational leadership strategies, and the update ofthe IT system infrastructure to conform to the recent HIPAA rules andregulations.

Indeed, the fact that UHealth System has been inoperation since 1952 indicates that the institutional developmentplan is responsive to the organization’s operational environment.Furthermore, UHealth has been able to adapt to changes depending onthe existing market trends. In addition, UHealth has invested indiverse portfolios (such as education, research, and delivery ofhealth care services) that give it a competitive advantage in theindustry (Barth-Farkas&amp Vera 2014). Nevertheless, there is a needto constantly ensure that the current organizational strategic planaccounts for potential challenges associated with the organization’soperating environment.


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