Istituto Clinico Humanitas (A)

Istituto Clinico Humanitas is a newly built private hospital, south of Milan, Italy, that has attained unusual profitability while treating public system patients. The hospital was built and is managed by Techosp, a subsidiary of Techint, a global engineering and consulting firm. Techosp created a design and management system that emphasizes optimizing patient throughput and utilization of all of the hospital's facilities. Physicians are all fully employed and have a significant financial incentive to maximize efficiency. The executive team is now considering whether to affiliate with the University of Milan medical school and, in effect, become Italy's first private academic medical center. The general manager must consider the effect of this affiliation on the hospital's performance.