Rotec Theory: planning tool to position hospitals on the technology curve

The mission statement of a prominent California hospital has been revised as part of a strategic planning process less than two years before the hospital began experiencing substantial financial difficulties. When the "red numbers" began to appear, management was quick to blame changing demographic patterns and the competitive environment. Those were not the only problems. A major contributing factor that management failed to recognize was a delay in how quickly the hospital moved to adopt high technology or new medical procedures. In a few short years, it had changed from being the first community hospital to implement state-of-the-art programs to one that was slow to introduce technology. In retrospect, the hospital's mission statement did not address the role of technology and therefore it could not detect the movement away from one of its critical success factors. The Rotec Theory was developed to assist this hospital to understand the economics of technology on its current and planned operations.