Hospital Operations Mismanagement


Hospital operations mismanagement has severe implications on the financial situation in a hospital; it also affects patients’ medical costs. Nonetheless, these effects are manifested differently among the two parties, and may cause cost-ethical conflicts among stakeholders.

Financial implications of Hospital operations mismanagement

Hospital context

When hospitals are poorly managed, chances are that nurses, physicians and other staff members will be highly overstretched. This may cause immense stress, and diminished quality of care. Patients attending these hospitals will eventually become dissatisfied with the services. The long waiting times or unpredictable attendance from physicians may lead to these outcomes. A number of them may leave the inefficient hospitals for better services in other hospitals, and this may reduce revenues in the first institution. Therefore, mismanagement of hospital operations ruins an institution’s reputation, and its income streams (Litvak & Laskowski-Jones 6)

Hospital operations mismanagement also causes resource underuse. This means that institutions will spend more than they need to do on each patient. As a result, hospitals can end up in poor financial positions. A poorly managed hospital is one in which capital and inventory costs are rarely monitored or controlled. In order to service assets, American hospitals spend approximately six thousand dollars per bed. This may include expenditures in biomedical, lab, diagnostics, imaging and life support equipments. For a hospital that has two hundred beds, these costs may spiral to 1.4 million dollars per year. The lack of resource control, therefore, increases the amount of money that hospitals spend on maintenance and purchase of equipments. In other words, this practice contributes to waste. In such times when healthcare costs are a serious problem for the nation, there should be no room for wastage in healthcare institutions. Such inefficiencies stem from poor analyses of annual spends. Most hospitals delegate the problem of resource control to various departments, and this leads to uncoordinated or duplicated efforts. Additionally, such mismanaged hospitals rarely reduce recurring problems in asset management and this puts them in such an undesirable position. Alternatively, poor management of beds in hospitals arises from intermittent occupancy rates in hospitals. Inefficient hospitals do not streamline patient flows and this means that bed capacities are never fully utilized.


The problem of malpractice lawsuits is a major financial challenge that emanates from hospital operations mismanagement. Studies illustrate that poor management of patient care and negligent prescriptions cause most of medically related suits. Other legal suits come from injuries and staff errors. These mistakes occur in poorly run hospitals. Such institutions do not have tracking systems to analyze the medical procedures that patients have gone through. Therefore, a doctor may prescribe medication that reacts with other medications that the patient may be taking. If the hospital operations in that institution were well run, the doctor would have time to ask for these medications or for the patient’s past records. If these mistakes lead to health complications, patients may sue the physicians for malpractice. In states like Alaska, indemnity fees amount to $258,475; in Idaho, indemnity fees are $176,822. Physicians and their insurers, therefore, lose out greatly owing to these lawsuits. All these extra costs could have been prevented if the institutions they operated in were well run.

Patients also spend more than they should because of poor services in the poorly managed institutions. These individuals have to seek multiple consultations owing to poor outcomes in previous hospitals. This heightens healthcare costs for them and their sponsoring insurers.

Ethical and legal implications of hospital operations mismanagement

Ethical implications

Hospital operations mismanagement has serious repercussions on the mortality of patients. Over twenty thousand patients die annually as a result of medical errors that stem from the above mentioned inefficiencies. Such numbers are even higher than those ones that are attributable to fatal diseases such as AIDS. This has serious ethical implications on the concerned institutions as well as the physicians involved. Doctors and other medical staff are ethically obligated to preserve human life. If they continue to work in mismanaged hospitals, then they will be violating this duty.

If patient deaths do not occur, then negligent hospitals can lead to worse health outcomes among patients. In other words, they minimize patient safety. For instance, a surgeon may amputate the wrong leg, or a chemotherapist may overdose a patient during the medical procedure. These health outcomes are unacceptable in the field of healthcare because it is unethical to create them. Patients visit hospitals in order to improve their health; not to worsen it.

Hospitals are obligated to provide high quality of care to all patients. This means offering them the right medical procedures and diagnoses as well as attending to them at the right time. Giving patients excessively long waiting times can lead to adverse deterioration of health. It may cause them unnecessary discomfort and pain. Hospital administrators would be acting unethically if they subject patients to low quality care especially when they have the capacity to change outcomes.

Hospital operations mismanagement sometimes emanates from ethical issues that emerge from competing institutional values. Physicians, specialists and the hospital staff in general should provide quality care to patients; that should be the top most priority. Thereafter, the institution should strive to ensure professional excellence among its staff members. Thirdly, hospitals should safeguard their financial wellbeing. When hospital operations are well managed, then the institution will have prioritized its ethical obligations well. However, poorly run hospitals mix up issues. Some of them may try to take in as many patients as they can; using the least resources possible and this can hamper the quality of care. Such circumstances may occur even when patients’ quality of care should be the first priority. It should be noted that sometimes applying these principles may not be easy. When a hospital is going through a difficult financial period, then staff members may be tempted to take on more than they can handle, and this may fuel the crisis (Pope 1067). Failure to adhere to ethical principles is what leads to hospital operations mismanagement. Organizations ought to have strong structures for allocating decisions. They should also have a process in place to neutralize the negative effects of those decisions. Decision makers themselves also face huge moral stress because of these dire effects.

Legal implications

When hospital operations continue to be mismanaged, then cases of litigation are bound to increase in hospitals. Physicians or other healthcare employees that are responsible for medical errors may face the threat of losing their medical licenses. If negligence leads to extreme effects, then the concerned practitioners may not have the privilege of carrying out their duties anymore. Hospitals may also bear the brunt for poor mismanagement of their hospitals when they become the target of these litigations. Additionally, some advocate groups may decide to take a proactive role by filing cases against those hospitals because of failing to take action when things got worse. Furthermore, doctors or other staff members may be accused of complacency and acceptance of dire patient conditions. They should have the courage to do the right thing if their institutions cannot. Since most doctors can rarely stand up against their institutions, then this makes them vulnerable to legal action from advocacy groups.

Ethical and cost conflicts that emanate from financial implications of hospital operations mismanagement

When hospitals try to improve their financial status, this may create conflicting effects in cost and ethical concerns. Hospitals may have to sacrifice one aspect over the other. For instance, an institution may wish to augment its revenues by increasing the number of patients in attendance. It may achieve this outcome by giving doctors rewards that depend on the number of patients hospitalized. Doctors may be tempted to give treatment options that will expand hospital stays. Alternatively, they may try to convince a patient not to leave the hospital when discharge time arises. These actions create a series of ethical implications for the people concerned as they do not reflect the patient’s best interest.

Another way in which costs and ethical concerns can conflict is during revenue generation initiatives. Some hospitals may carry out am advertising campaign that makes a certain disorder appear more serious than it really is. This may improve its revenues, but may lead to ethical challenges for patients such as the prevalence of unnecessary admissions and excessive patient expenditures.

Works Cited

Litvak, Eugene & Linda Laskowski-Jones. “Nurse staffing, hospital operations, care quality and common sense.” Nursing 41.8 (2011): 6-7. Print.

Pope, Kenneth. “Ethical and malpractice issues in hospital practice.” American Psychologist 45.9(2000): 1066-1070. Print.

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