When Bruce Reid was hired as Blake Memorial Hospitals new CEO, the mandate had been clear: improve the quality of care, and set the financial house in order. As Reid struggled to finalize his budget for approval at next weeks board meeting, his attention kept returning to one issue the future of six off-site clinics. The clinics had been set up six years earlier to provide primary health care to the communitys poorer neighbourhoods. Although they provided a valuable service, they also diverted funds away from in-house services, many of which were underfunded. Cutting hospital personnel and freezing salaries could affect quality of care, which was already slipping. Eliminating the clinics, on the other hand, would save A$256 000 without compromising Blakes internal operations. However, there would be political consequences. Clara Bryant, the recently appointed Commissioner of health services, repeatedly argued that the clinics were an essential service for the poor. Closing the clinics could jeopardise access to funds. Dr Susan Russell, the hospitals director of clinics, was equally vocal about responsibility to the community, although Dr Winston Lee, chief of surgery, argued forcefully for closing the off-site clinics and having shuttle buses bring patients to the hospital weekly. Dr Russell argued for an entirely new way of delivering health care A hospital is not a building, she said, its a service. And wherever the service is needed, that is where the hospital should be. That meant funding more clinics. Russell wanted to create a network of neighbourhood-based centers for all the surrounding neighbourhoods, poor and middle income. Besides improving health care, the network would act as an inpatient referral system for hospital services. Reid considered the proposal: if a clinic network could tap the paying public and generate more inpatient business, it might be worth looking into. The rival hospital, located on the affluent side of town, certainly wasnt doing anything so creative.

What do you do?

1 Close the clinics and save a quick $256000, and then move on to tackle the greater problems that threaten Blakes long-term future.

2 Gradually abandon the neighbourhood altogether and open freestanding clinics in more affluent suburbs, at the same time opening a mini-hospital in the poor neighbourhood for critical care.

3 Tighten up internal efficiency to deal with immediate financial problems. Keep the clinics open for now, bring Clara Bryant into the decision-making process, and begin working with community groups to explore unmet health care needs and develop innovative options for meeting them.