Case Study 12.

Answer immediate issue using the thought starters to back up conclusion.

Page In late November, Ms. Elaine Taylor, director of supply for the city of Winston, was reviewing proposals for the Carson Manor study. Three consulting groups had responded to a request for proposal (RFP) to study the operation of the city owned nursing home. Ms. Taylor knew that her recommendations for selection of a consultant would have to be completed by mid-December CARSON MANOR Carson Manor was opened about 30 years ago for persons requiring masing Care Garson had a bed capacity of 470. Staff totaled 235 with nonitanagement personelitied under the District Service Workers Union Local 325 Day-to-day operations of the Carson Manor were the responsibility of the Carson Manor administrator who reported to Mr. Henry Davis, the sty's director of social services Policy and budget plans were developed by Mr. Davis and his staffin conjunction with Carson administrative staff and the Carson Manor Committee of Management (CCM). The CMCM consisted of five aldermen who were appointed or volunteered to fill these positions. The CMCM reported to another manicomittee with broader community service concerns, called the Committee for Community Services. This committee reviewed major expenditures and decisions impacting community service policy All major expenditures were then reviewed by the Board of Control, consisting of the mayor and four elected controllers, prior to being sent to city council for final approval As director of social services Mr. Davis reported to the city administrator Mr. Peterson who in turn reported to the mayor. The combined elected and appointed reporting structures shown in Exhibiti Exhit 1 - Reporting Structure 0800 5 7 9 E R T Y S D F G H K. C V B N M PURCHASING AND SUPPLY DIVISION (PSD) The PSD had purchasing and disposal authority for the city's engineering fire, landfill/sanitation departments, and social services division, and for city hall building support. The city operated separate purchasing departments in the public utilities commission, the libraries, and the police department Purchasing authority was granted to the PSD director and her buyers by municipal bylaw. This bylaw outlined the limits of purchasing authority and formed the basis of the PSD's Policy Manual for Purchasing Tendering, and Disposal The main objective of the PSD was to respond to the needs of other departments and divisions for goods and services at minimum cost, consistent with desired quality, delivery timing, and reliability. The PSD had expertise in the purchasing and tendering of goods and certain services, such as equipment rental, maintenance contracts, and engineering/architectural consulting. However, it had not dealt extensively with management consulting service procurement at that time. Elaine Taylor became director of PSD two years ago at the age of 35. Prior to this, she was chief buyer and assistant director of purchasing for the city of Forestview, similar in size to Winston. Elaine reported to the city treasurer, Mr. R. Holbright and dealt directly with other department and division heads on purchasing matters, as shown in Exhibit 1. She managed a staff of 15, including three buyers. THE CARSON MANOR STUDY The Carson Manor had a history of problems related to budgeting and cost control, City council felt that the cost per bed was unnecessarily high, when compared to privately run institutions. Eight months ago the council directed the city administrator, Mr. Peterson, and the director of social services, Mr. Davis, to prepare a report for submission to the Carson Manor Committee of Management in early June. The report was to contain: 1. An analysis of the comparative costs at Carson Manor and other state facilities. 2. A review of the feasibility of increasing cost efficiency 3. A review of the implications of possible alternatives such as: a. Contract management b. An in-depth operational review and cost efficiency study carried out by an external agency. The requested internal report, titled "The Carson Manor for the Aged, a Review and Alternatives," was tabled on June 9. It revealed that Carson Manor costs were approximately 14 percent higher than state averages on a per bed basis. The report highlighted the difficulties of measuring and controlling costs in the absence of a patient classification system that would enable standard levels of nursing care to be developed. The report recommended an operational review by an outside agency and outlined some general guidelines and objectives, Sections of the Internal report, related to these guidelines and objectives. are shown in Exhibit 2 Page 29 Increasing levels of care required by Carson Manor residents have a major influence on costs, since care essentially is translated into staff to provide the necessary services. No objective classification of resident care requirements has ever been carried out at the Carson Manor , although there is no question that current residents and even new applicants require much more nursing care than was formerly the case. Page 33 An operational review could be carried out by an independent consulting firm of the State's Department of Community and Social Services and would provide a thorough analysis of options and possible areas for improvement at the Carson Manor. Such an approach would provide a firm basis for the development of strategies for operational chanpe but would not guarantee implementation of the necessary changes. Page 34 The overall advantage of an operational review would be the ability to identify, in depth, problem areas at the Carson Manor for which change strategies could be developed by the city. Such strategies might include contract management of a specific service, for example. This type of analysis would provide solid ground for future planning On the negative side of the balance are the costs of such a study and the necessity to subsequently develop and implement changes for the identified problem areas Council accepted the report's recommendations and directed Messrs. Peterson and Davis to initiate an independent consultant's study of Carson Manor. This was not a budgeted expense, and the approval of the CMCM, the Committee of Community Services, the Board of Control, and City Council were necessary prior to letting a consulting contract. Mr. Davis requested the assistance of Raine Taylor and the PSD in identifying and evaluating potential study participants. Elaine Taylor handled the Carson Manor Study personally, since it was beyond the scope of responsibilities and experience of her buyers. She drafted an REP, which is shown in Exhibit 3. In-state consulting organizations were contacted, and a list of consulting companies with relevant experience was developed. Five consulting companies were invited to submit proposals Exhibit 3 Request for Proposal You are invited to submit a proposal for the purpose of conducting an administrative and operational review of the Carson Manor for cities of advanced. The review is to include all aspects of operation at the home, including but not restricted to assessment of resident care requirements, review of administration, organizational design and staffing. The main sections of the home include laundry and housekeeping nursing and physiotherapy, dietary special services property, building maintenance, and administration. The review is to be conducted by examination and administration On the basis of the review, you are to develop comprehensive recommendations for introducing improved operating and cost efficiencies for the future operation of the home All recommendations should offer alternatives identity savings to be achieved and the related cost in order to implement the recommendations, projected impact on staff and administration, and strategies for implementation that are consistent with the city's role as operators of the home, as well as provisions for ensuring the maintenance of the current quality of care Page