Gold Coast Psychiatric Hospital (GCPH)


Until 1995, the Gold Coast Psychiatric Hospital (GCPH) operated in much the same fashion as it always had.  It catered to the mentally ill in a manner that centered on the dynamic relationship between the psychiatrist/physician and patient.  Psychiatrists prescribed treatments – usually in the form of drugs, shock therapy and so forth – while the nursing and technical support staff in the hospital performed the variety of maintenance functions necessary to keep the institution in good running order.  The latter had little to do with therapeutically helping the patients.  Basically then, GCPH was like any other hospital, the main difference being that it specialised in the treatment of mental illness as opposed to purely physiological disorders.


Interesting trends had been developing in the field of mental health treatments.  In England, Maxwell Jones was conducting some fascinating and successful experiments with patients.  Jones was troubled with the types of therapy that allowed patients to sit idly in their rooms for the greatest part of their stay at an institution.  He began to consider the negative effects of isolation upon mental patients.  Jones concluded that an increased amount of social interaction among patients would help to give them a more stable and concrete perception of reality.

Interaction between support staff and patients, and among the patients themselves, was thus encouraged.  Treatments that required private sessions between doctor and patient were still to be maintained where necessary, but this was to be supplemented and to some extent supplanted by interaction between the individual and all potentially helpful members of his/her environment.  This afforded a more or less constant form of therapy and the patient’s time in the hospital could be more effectively spent.

The benefits of this interactive or “milieu” therapy, were not confined to the medical or psychiatric realm.  The classical, doctor-patient treatment required large numbers of psychiatrists and as a result was quite costly.  On the other hand, interactive therapy was found to be more economical since fewer doctors could deal with more patients.  For example, even in the absence of psychiatrists, patients would be able to interact with nursing and technical staff, as well as their peers.  According to Jones, such interaction could at least to some extent take the place of direct patient-psychiatrist contact.


GCPH is run by a staff committee of doctors who are responsible to a board of governors.  The latter are charged with approving major allocations of funds and key changes in medical policy.  However, since the board is made up mainly of lay personnel, it tends as a rule to go along with the recommendations of the staff committee.  Proposals from the committee are usually of such a complex or technical nature that it is difficult for the board to deal with them employing any semblance of rigor.  Relationships between the two bodies are characterised by a minimum of conflict.

The staff committee is made up of 12 attending physicians, the director of nursing, and the director of technical and support staff.  The committee is “chaired” by the current director of the hospital, Dr. Stephenson.  The committee is the effective governing body.  Issues are decided upon by vote (each member of the committee has one vote).  For the most part, the decision-making climate is as democratic as can be with all proposals being subject to the “push and haul of debate.”

Dr. Stephenson considers this type of structure to be vital to psychiatric hospitals that hope to keep up-to-date.  He claims this is true, “not only because of the technical nature of the matters being discussed, but more importantly, because of considerations of philosophy and morality which are intertwined with many decisions.  In addition, the uncertainty and change inherent in the field, make it impossible for one person to play God.” Another member of the committee asserted that in psychiatry, “it is impossible to reduce things down to solely hard facts and rigid rules.  This is not an exact science.”

Dr. Stephenson pointed out that the people who sit on the committee are a diverse lot of individuals.  They are all professionals, each with their own set of interests and competencies.  The dispositions of these people are nourished not only by the hospital setting but also by their past jobs, educational experiences, professional affiliations, and a host of other factors which make for diversity in professional philosophies.

At GCPH it seems there has developed a polarisation among proponents of two schools of psychiatric thought.  The first group of psychiatrists are adherents of the traditional approach to therapy.  They view psychosis as a disease that must be fought by the physician. The doctor is seen as the principal warrior in the battle and s/he will use drugs and other techniques to combat the illness.  The other group of doctors adopt the Jonesian milieu approach and believe that the entire environment of the patient, including peers, should be enlisted in helping with therapy. These doctors are convinced that group-oriented forms of treatment that maximise the patient’s exposure to interpersonal interaction are preferable.

Dr. Stephenson claims that far from reducing the disagreement among these groups, the forum provided by the monthly committee meetings has worked to heighten antagonism.  There has emerged increasing polarisation between the two factions.  What started as a difference of opinion has grown in increasingly frequent vituperative outbursts at the committee meetings.  According to Stephenson, the morale in the hospital is as low as he has ever seen it, and he is not optimistic about the future.  “We just can’t seem to get a meeting of minds anymore.”

In order to gain an appreciation of how this situation developed it is important to look at a sequence of events which began as far back as the early days of the hospital.

THE EARLY DAYS: 1979-1990

GCPH was founded in 1969 as a private institution.  It had, almost since inception, enjoyed a fine reputation.  Its success record, using medical (non-milieu) forms of therapy was favorable compared to other institutions in its class.  Director Richards who had chaired the hospital committee for many years was widely respected for his extensive and innovative publications in the medical area of mental health.  He was one of the few individuals in the medical community whose pioneering ideas and theories had successfully been put into practice.  The hospital was well staffed with a full complement of excellent psychiatrists.  During the 1970’s the institution was known for the unusual amount of individual attention patients received from the medical staff.  All patients were private – there were no public wards.


During the 70’s, and 80’s “society matured to the problems of mental health.” As a result, cases that would not have normally come to the attention of a psychiatric hospital in the 1940’s and 50’s were being increasingly referred to such institutions by other hospitals, social agencies, schools and sundry organisations.  GCPH became flooded with private patients and there was a good deal of pressure levied against the hospital to open its doors to public patients.  It did this first in 1991 by opening a day clinic and soon thereafter by allocating one ward to resident public patients.  Since medical types of treatments were used exclusively by the hospital, the professional psychiatric staff became hopelessly overburdened.  A meeting of the committee was held to discuss the problem and with only a very few exceptions, everyone agreed that technicians and nurses should begin to play a greater role in administering treatments.  By 1993, such staff had taken over a good deal of the work hitherto performed only by psychiatrists.

Because there were inadequate resources available to train technical and nursing personnel in the refinements relevant to their responsibilities, all parties interviewed agreed that the quality of treatment declined substantially during the period.  Two staff members recruited that year had enjoyed extensive experience in “more progressive” institutions in England and the United States and began to complain bitterly about the quality of treatment.  They were well aware of the restricted financial resources available to the hospital but felt this was no excuse for the situation.  Drs. Theoret and Gosselin, the new recruits, felt that GCPH could make much better use of its resources by commencing, at least in certain wards, milieu therapy.  Gosselin claimed that:

“The staff shortage and the belligerence of the ‘old guard’ to new forms of treatment resulted in the type of environment where for at least 90% of the day, the patient sits around and vegetates.  The other 10% of the time s/he is more often than not subject to treatment by amateurs.  These people try hard – it’s just that they aren’t sufficiently trained to work in a field that is 30% a science and 70% an art.”

The suggestion was defeated after an emotional discussion between Richards and his eminent colleagues, who were members of the conservative school of medical therapists, and Theoret and Gosselin.  The former claimed that the staff shortage was insufficient cause to adopt an unproven mode of therapy and asserted that before this shortage they had enjoyed an excellent reputation using “more acceptable, tried and true” techniques.  They agreed, however, that something had to be done to improve patient care and decided to look into a fund-raising campaign that would afford them the resources to hire more staff.  Theoret and Gosselin claimed that the committee took a reactionary approach and thought that the “vested psychological interests on the part of the conservative staff to treatments which they themselves helped to develop” were responsible for the “stopgap” approach (fund-raising) to solving the problem.  They claimed that clinical experimental evidence had proven beyond a doubt the superiority of milieu therapy.

By the end of 1994, it became clear that raising additional funds was indeed only a very short-term solution.  The number of public patients had increased substantially and two wards had to be devoted to them.  The more economically lucrative private patients began to stabilise in number as older members of the staff retired.  Funds gathered during 1994 were insufficient to substantially improve treatment.


In March 1985 Dr. Richards, age 70, retired.  He was replaced by Dr. Stephenson, 42, who was noted for his dynamism and progressiveness at a medium-sized British psychiatric hospital.  The latter had worked on applying milieu therapy in England and had witnessed its success in a fairly broad variety of clinical situations.  In July 1995 Dr. Stephenson hired three new staff members, each familiar with and a proponent of milieu therapy.  Two of the new staff members served as replacements for two members of the retiring personnel.  One came to fill a new position created as a result of increased demand and made possible by the fund-raising campaign initiated the year before.

During the committee meeting in September 1995, a real schism between pre-Stephenson staff and the “young turks” became apparent.  At that meeting, Stephenson expressed the desire to “bolster the reputation of GCPH to what, it once was.” Only one device to accomplish this was proposed: the implementation on a trial basis of milieu therapy.

Immediately, Dr. Silverton, a former close associate of Dr. Richards and an eminent member of the psychiatric community, took objection to Stephenson’s approach.  He claimed that: (1) the medically oriented therapy was by no means outmoded and was still the most reliable approach, (2) the new types of treatment were employed mainly by “faddist” institutions usually located in Southern California, and (3) the new director had best turn his attention to getting more “medically competent” personnel.  Dr. Silverton’s stance was heartily endorsed by six of his pre-Stephenson colleagues who believed that it was time to “put an end to this milieu nonsense once and for all.”

Stephenson, Gosselin, and Theoret, as well as the three recently recruited staff members were “visibly shaken” by the reaction of their colleagues and the defeat of the motion to introduce milieu therapy.  So were the directors of the nursing and technical staff who sat on the committee ex officio on matters directly relevant to the types of medical treatment employed.  These individuals had been receiving an increasing number of complaints from their staff who claimed they were party to a sub-optimal effort.  In fact, the interviewers learned that the nurses had been performing unconsciously a simplified form of milieu therapy. They “cared for the patients throughout the day and coaxed them into performing some activity – any activity.”  They were consequently quite distressed that they saw patients “always alone, as though committed to solitary confinement as a form of punishment.”

The meeting was adjourned by Dr. Stephenson who asked all committee members to come to another meeting, in three weeks, with concrete proposals regarding the improvement of treatment.  At that meeting Miss Verdone, the director of nursing, asked for a very small amount of funds to begin conferences and classes to educate the nursing staff about better methods of patient care.  When asked to explain what types of courses she had in mind, she said that “a number of them would be oriented to imparting methods of communicating better with patients. This way staff members would be more responsive to their needs and less susceptible to the emotional problems that were such a common occupational hazard.”  The committee almost unanimously agreed that this was a good idea and recommended that it be implemented as soon as possible.

Dr. Stephenson then directed the attention of the committee members to a recent proclamation from a well-respected American body of psychiatrists.  It asserted that the refusal to implement milieu therapy was tantamount to malpractice.  To bolster his argument, Stephenson and the milieu therapy advocates had prepared a report which outlined a gradual and voluntary scheme for the introduction of the new therapy in the public wards (most of the conventional treatment advocates’ patients were private).  He mentioned that this was the only possible solution.  Meetings with the board of governors, the government and some professional fund-raisers had disclosed that there was no way to obtain enough money to procure the personnel required to effectively pursue ‘traditional’ methods of therapy.  The suggestion that more psychiatrists be hired was thus shown to be inoperative.  In closing, Stephenson mentioned that it should be the right of any doctor who so desires it to prevent his/her private patients from participating in group therapy.  After a good deal of debate the conventional treatment proponents approved the implementation on a trial basis of milieu therapy in the outpatient day hospital only.  They insisted on retaining the right to withhold such therapy from their patients in cases where they should deem such action advisable.  After the meeting Dr. Stephenson was satisfied that some (“but not nearly enough”) progress had been made.  The medical therapy advocates, still in the majority, believed and hoped that this would at last “get the adventurers off our backs.”

MORE TROUBLE: Early 2000s

For several years the hospital was run with milieu therapy being administered solely to outpatients.  In February 2000 the technical and nursing staff went on strike.  As a result, public patients in one ward were sent home.  The nursing director summarised the reasons for the strike as follows:

“We (my staff) were doing all we could for the patients.  Still, they were confined to restricted areas, usually their rooms, where they whiled away the time staring into space.  What a pathetic waste of humanity.  We’re fully aware of the programs going on at this and other institutions where this type of thing is minimised.  It has really begun to grate on our nerves.  Something had to be done.”

Dr. Stephenson called a committee meeting three days prior to the strike.  He asked the nursing director to summarise the reasons for the strike before the committee.  It was resolved that committee members should have a week to mull things over and return with some creative suggestions in time for the next meeting.  This they did.  Dr. Gosselin proposed that since the conventional treatment proponents had little concern for the public ward, they should allow the introduction of milieu therapy to take place at least in this area of the hospital.  The vote was close, and Gosselin’s recommendation was passed not, however, before the conventional treatment proponents had a chance to stipulate precisely their much anticipated proviso that: “private doctors maintain the right to restrict their patients’ group activities and deny them the chance to take part in milieu therapy.”

The nurses returned to work and the technical staff immediately followed suit.  All the while animosity was building between the opposite sides of what was becoming an ongoing dispute.  The problems were far from over.

THE LAST STRAW: Late 2000s

In May 2006 Dr. Berg joined the staff.  He was another firm believer in milieu therapy.  Drs. Theoret, Gosselin, Berg and the balance of the post-Stephenson staff were becoming increasingly incensed at the difficulty they encountered in employing milieu therapy in the public wards.  These doctors tried to organise their patients into milieu groups or interaction cells.  The tactic met with very limited success since they had to share ward beds with the conventional treatment proponents.  As a result, individuals within groups tended to be scattered throughout the hospital’s three wards.

During the January 2010 committee meeting, Dr. Silverton commented on the confused and “chaotic” nature of the wards.  He mentioned that his patients were being bothered by the milieu therapy staff and that there was far too much activity going on around them.  The proponents of milieu therapy retorted that the confused nature of the wards was due to the reactionary veterans whose patients were scattered throughout wards that could otherwise have been effectively organised into interactive cells.  Dr. Theoret claimed that this factor was the main obstacle to the effectiveness of the new treatment.

Two weeks after the meeting, Drs. Gosselin and Theoret, who had become well-respected members of the psychiatric community, threatened to resign unless milieu therapy was instituted on a compulsory basis throughout the hospital.  The conventional therapy proponents’ informal reaction to the joint letter of intended resignation (which was circulated to all staff members on the committee and to the board of governors) was: “It will be good to get things back to normal again after those guys leave.” Operating costs were escalating.  Profits were down – staff moral was even lower.  Dr. Stephenson was at a loss as to what to do. 

Some “discussion” questions

You may find it helpful in preparation for the assignment to think about the following series of “discussion” questions.  They are intended to help ensure you fully think through the issues in the case, they are not directly related to the assessment task which is outlined below.

  1. What are the different factors that have led to the growing conflict at GCPH?
  2. What steps, if any, can or should Dr. Stephenson take to help resolve this conflict?
  3. What are the strengths and weaknesses of the different approaches that could be taken to resolve this conflict?
  4. How does strategy formation in an organisation such as GCPH differ from that in other types of organisations?
  5. Why do you think that Dr. Stephenson would have allowed the decision, about the use of milieu therapy, to develop the way it did? What are the drawbacks and advantages of taking this approach?
  6. Return to March 1985 when Dr. Stephenson was appointed Director of the hospital:
  7. Present the strategic arguments ‘for’ and ‘against’ changing the treatment regime as they would have been understood at that time.
  8. Assuming that Dr. Stephenson wants to introduce milieu therapy to the hospital, how should he plan to achieve this aim?
  9. What would be the major challenges facing Dr. Stephenson in introducing milieu therapy? How should he plan to handle them?

Assessment Questions – Be sure to address all three questions in your 2500-word case analysis

Write an essay in which you discuss your analysis of the internal and external environments of the GCPH, its strengths and weaknesses, its positioning, its fit, and any other issues you think critical to its success in the future. 

  1. Analyse the external strategic positioning of GCPH in the ‘early days’ (1980-1985). In what ways was GCPH in “fit” and in what ways is it out of “fit” with its external environment?
  2. In what ways did the decision to introduce milieu therapy in the ‘later years’ (after 1985) help GCPH regain “fit” with its external environment?
  3. Once the strategic decision had been made and milieu therapy had begun to be introduced, what option(s) do you propose to get Davison’s internal elements (e.g., structure, processes, culture, etc.) back into fit with its new external positioning strategy?