NURS 6241 Strategic Planning In Healthcare Organizations Essay Paper

Strategic planning is a completely valid and useful tool for guiding all types of organizations, including healthcare organizations. The organizational level at which the strategic planning process is relevant depends on the unit’s size, its complexity and the differentiation of the service provided.

A cardiology department, a hydrodynamic unit or a neurophysiology’s unit can be an appropriate level, as long as their plans align with other plans at higher levels.

The leader of each unit is the person responsible for promoting the planning process, a core and essential part of his or her role. The process of strategic planning is programmable, systematic, rational, and holistic and integrates the short, medium and long term, allowing the healthcare organization to focus on relevant and lasting transformations for the future.

Strategic Planning in the Healthcare Industry

Over the last 10 years we have seen a tremendous change in the healthcare industry. Whether it is a shift in philosophy to focus on more value-based care or navigating the impact of implementing the Affordable Care Act here in the United States, significant shifts and changes have occurred and are occurring every day. Given the relative unpredictability of how the healthcare market will change, is there really any use for those in the industry to go through a strategic planning initiative? The answer is of course yes, but the real question is “how?”

To be successful in the future, no matter how turbulent the path forward may be, organizations need to create a vision based on the best future assumptions they can identify. With any strategic planning effort is it really important to have at its foundation key assumptions about how the world will be different. Organizations then can describe what they need to look like given those future assumptions, and then design a strategy to help them bridge the gap between where they are today and achieving that future success. But if all our assumptions of the future are up in the air, then how can we really build a strategy effectively?

I would argue that in industries that are experiencing a lot of change it is even more important to be strategic! Yes, there are many unknowns given the relative volatility of the US political landscape as it pertains to healthcare. But there are some key assumptions that can be made that are relative certainties regardless of any potential future political or regulatory shifts? If we can identify those “most probable” assumptions in the healthcare industry or in our particular marketplace, then it would be worth our time to identify them and begin building our response strategies accordingly.

I would like to present the following set of ideas as examples of assumptions that most participants in the healthcare sector need to consider over the next five years and could be the basis for strategic discussion. These are not meant to be all inclusive, but merely to demonstrate that there are fundamental assumptions that can be identified even in a marketplace where significant uncertainty exists.

The need to provide ever increasing quality patient care will continue. The focus over the next five years will continue to be on delivering highly impactful, cost-effective healthcare. Whether it is driven by key stakeholder requirements or customer expectations, we know that successful players in the healthcare industry will be those that can generate healthy outcomes for their patients. Fundamentalist having strategies built around improved effectiveness and efficiency in delivering quality patient care will be a fundamental requirement in the future.

No real surprises but any strategic discussion in the healthcare sector must begin with patient care! The point is that the ability to differentiate regarding healthcare outcomes will be the basis for any future success in the industry.

Changes in customer volume and demographics will continue. The fact is that the US population is going to continue to grow over the next five years. In May of 2017, the US passed the 325 million mark and is expected to be over 332 million by 2020 (US Census data). That means essentially there will be more people needing care in the future with some healthcare markets seeing fairly dramatic increases in patient populations.

We have seen a significant impact in demographic shifts in the US over the last five years and this trend will continue over the next five years as the increases in Hispanic and Asian demographic groups continue at a high rate. How will these assumptions impact capacity requirements or service delivery requirements within the healthcare sector?

Labor supply changes. The US has seen labor supply grow by 2.6 percent per year over the last decade, but that trend will not continue. Rand researchers (Karoly & Panis, 2004) have postulated that the growth of labor supply will only be around .04 percent over the next decade and will be even smaller the following decade.

Also, while the trend has been a more aging workforce over the last 20 years this will also change with the workforce being more evenly balanced across age groups in the future. How will this impact the availability of skill workers and experience levels in the healthcare industry? What does this mean for how we need to recruit and retain the workforce?

Continued increase in wellness and prevention. Significant increase in innovation with regard to nutrition for example will be driven by increased consumer demand for wellness. Patients are sharing that they want advice on weight management and diet therapies (PwC Health Research Institute, 2016) for example leading to increased focus on these services within the industry. Smoking cessation and fitness programs are other programs that are already tied to health outcomes and will continue to be important in the future. How will this trend impact the future services healthcare practitioners will provide? Or the information they make available to their patients?

Emerging technologies in the healthcare marketplace. PWC reports that “the US health industry lags behind other industries, such as retail and telecommunications, in deploying emerging technologies, including artificial intelligence, drones and virtual reality but that this trend is about to change.” (PwC Health Research Institute, 2016). 

Accenture reports that “the global healthcare industry in the year 2020 will be a highly connected environment powered by large data networks, cloud computing, and mobile devices. There will be widespread increases in the number of connected healthcare networks providing seamless integration between care providers, patients, pharmaceutical companies, health insurers, and other invested parties anywhere in the world.

Care within this model will become more patient-eccentric, less expensive to provide, and more innovative.” (Meissner, 2013). These assumptions would call for a need to invest in breakthrough technologies that impact how patient care is provided and operational business processes are managed moving forward.

This will also impact the types of skills needed in the future within the industry.

Rising operating costs driven by government regulations and expanded capacity requirements will impact the financial viability of healthcare systems (Jonash & Ronanki, 2015). Healthcare CEO’s and COO’s must find innovative was to drive revenue and decrease costs. How will rising costs impact the future viability of healthcare providers? How must they change how they do business? In what areas must they innovate to reduce costs?

I share these discussion points as merely a sampling of assumptions that could be discussed by healthcare industry players in formulating their 3-5-year strategies. With proper research conducted, there are dozens of additional assumptions that we could discuss to really understand the future of the healthcare industry.

I provide these few ideas as evidence that even in an industry that is experiencing rapid, constant change, there is a need to really understand how the world will be different in the future. To do so, we must first understand what assumptions can be made and set out to use a strategic planning framework to understand how our healthcare organization must transform in the future in the face of those assumptions. Once we are able to articulate that future successful state, we can then work to understand what must be accomplished to get from where we are today to achieving the needed transformation that must take place in the next few years – our strategy becomes the path and the plan to future success.

Strategic planning is a process by which we determine the answers to two questions and then craft a plan to achieve desired results. The two questions are:

•  How much?

•  By when?

These questions are generally framed as goals and objectives, while the action plan that supports these two questions is called strategies and tactics.

Oftentimes, the strategic plan is divided into strategic themes — also called areas of focus, pillars of excellence or some similar terms — which is how Harvard Medical School approached its planning process. Emory University followed a similar model, identifying five strategic themes on which to develop its 10-year plan.

Regardless of the methodology used, it is vital that the organization establish concrete definitions for the strategic planning process itself. At a minimum, goals, objectives, strategies and tactics should all have specific definitions that are agreed upon by every person on the strategic planning team, similar to those established at the California State University at Fresno.

Goals provide the organization long-term focus, while objectives provide the quantitative measurements for achieving the goals. Strategies and tactics are those things we implement on a week-to-week and day-to-day basis that we believe have the best chance of achieving the objectives. The University of Illinois adopted four long-term goals aimed at making the university one of the premier institutions of higher learning in the country.

In order to create a relevant and timely strategic plan, the organization must first collect and disseminate information that provides a conceptual framework to help understand current conditions. Michigan State University does this by focusing on:

•  Internal operational constraints;

•  The external environment and the realities it imposes; 

• The organization’s intentions and priorities; and

•  The organization’s sense of direction.

The key to any strategic plan is to first answer the two important questions of how much, by when, and identify baselines and targets for each of its strategic plan objectives. Without measurable and quantifiable strategic plan objectives, the planning process remains largely unfocused, with real results weak or non-existent.

Set a long-term vision through goals, identify strong objectives to measure progress toward the goals and then create actionable strategies and tactics that will move the objectives toward the desired results. That is the fundamental definition of strategic planning.

Strategic planning is a completely valid and useful tool for guiding all types of organizations, including healthcare organizations. The organizational level at which the strategic planning process is relevant depends on the unit’s size, its complexity, and the differentiation of the service provided. A cardiology department, a hydrodynamic unit, or a neurophysiology’s unit can be an appropriate level, as long as their plans align with other plans at higher levels.

The leader of each unit is the person responsible for promoting the planning process, a core and essential part of his or her role. The process of strategic planning is programmable, systematic, rational, and holistic and integrates the short, medium, and long term, allowing the healthcare organization to focus on relevant and lasting transformations for the future.

The 5 Stages of Strategic Health Care Planning

Strategic planning is a proven resource for enabling health care organizations to navigate an environment that evolves continually. It allows organizational leaders to clearly identify and communicate organizational objectives. [1] Health care administrators often fill the strategic plan leader role for care provider organizations.

The following article details the basics of the most common strategic planning technique known to organizational leaders -SWOT analysis which stands for:

•  Strengths

•  Weaknesses

•  Opportunities

•  Threats

When executed correctly, strategic planning results in an ongoing process of discovery and improvement.

Analyzing the External Environment

Strategic plan leaders begin a SWOT analysis external evaluation by segmenting patients into groups relevant to organizational objectives. [3] Next, they identify and record characteristics that differentiate competing health care organizations while noting how their own organization compares to these groups. Providers are the next important influence that plan leaders analyze when evaluating external influences.

The final external factor is the objectives of the organization owner such as an individual, enterprise, or government agency. For example, a retail organization might start with geographical competitors, a global enterprise with changing political environments, and a government agency may begin with a review of current public needs.

Analyzing the Internal Environment

During this phase, plan leaders evaluate resources that stakeholders can change such as budgets and contractual agreements. They must also assess the organization’s legal environment during this phase. Other entities, such as unions and organizational decision makers, also represent important groups that plan leaders must evaluate. Finally, strategic plan leaders must assess processes related to clinical services and how these factors contribute to quality of service and patient outcomes.

The SWOT Matrix

During this stage of planning, the plan leader and the designated strategic planning group have developed several opportunities for improvement and move SWOT analysis. The evaluation team now examines the internal strengths and weaknesses as well as external opportunities and threats, categorizing the internal and external influences into one of four SWOT matrices labeled strengths, weaknesses, opportunities or threats.

With external factors — such as economic, technological, or legislative influences — organizations must exploit opportunities and protect themselves from threats. For internal influences, decision makers develop strategic plans to mitigate weaknesses and nurture and grow strengths in order to maximize organizational performance. Plan leaders also delineate the importance of each influence by ranking results as high, medium, or low importance, rankings that the organization later uses to decide which strategies to pursue.

Strategic Alternatives

During the fourth phase, the strategic planning team formally records alternative actions into a document without regard for whether the idea is viable. The strategic planning steering committee then classifies the alternative actions into defined action groups.

Now group participants refine and vet the suggestions while narrowing down the scope of activities to realistic undertakings. During this stage, the steering committee identifies and discards the suggestions that do not meet organizational objectives or fall outside the scope of possibility. When this phase ends, the steering committee will have identified a maximum of 20 action items as potentially viable options for strategic action.

Strategic Areas and Objectives

Ideally, the team should have settled on 5 to 6 strategic areas to focus on over the next several years by now, making sure not to exceed ten improvement areas in total. Spreading organizational resources too thin will result in poor outcomes for all strategic activities.

An activity must remain open to intervention for the entire duration of the plan, and the team should identify no more than 5 objectives for each area. Finally, the team must name the strategic area using generic terminology that does not influence activities one way or the other. For example, the team might name an area “Performance” rather than “Performance Improvement,” because “Performance” can include “Performance Improvement” as well as other objectives.

A Successful SWOT Case Study

In 2011, the Rush University Medical Center wanted to improve its ability to manage incoming patients. [3] At the time, the facility managed beds by manually tracking inventory with clipboards, which greatly limited the amount of patients that could check in each day. The organization opted to expand on an internal strength (the TeleTracking patient flow software that the facility already utilized for transfers) by expanding the technology to manage bed occupancy. After initiating this strategic action, the medical center experienced a transfer volume increase from 1,200 to 4,000 patients per year and a $53-million-dollar increase in revenue.

There are some planning initiatives overreach so far that activities start to spiral out of control. [2] When this occurs, health care administrators keep strategic planning initiatives on track. It is critical that administrators recognize the difference between being agile and flopping when faced with this challenge. Flopping involves making random changes and hoping for positive outcomes, where agility is making an alternative decision based on experience and forward thinking. It is inevitable that strategic plans will meet with some troubles, but this is when the best and brightest health care administrators display their merit by leading organizations out of troubled waters.

Best Practices for Creating a Hospital Strategic Plan in Uncertain Times I came across this article the other day on Becker Hospital Review and thought it would be a great one to share for those in the medical field who are in the strategic planning process. James R. Trimarchi, director of strategic planning at Southwestern Vermont Medical Center in Bennington, explains what he believes are the 5 best practices for creating a hospital strategic plan in uncertain times.

Healthcare reform legislation has increased demands concerning quality, cost and efficiency of hospitals and health systems. One way to manage these expectations is to create a strategic plan that clearly outlines goals for the future and how to reach them. “Strategic planning is more important now than it’s ever been,” says James R. Trimarchi, director of strategic planning at Southwestern Vermont Medical Center in Bennington.

Although strategic planning can help hospitals manage changes from new rules and regulations, it presents its own challenges. “Strategic planning works best when the marketplace is either in a stable trajectory or a known trajectory. The current healthcare environment is neither,” Mr. Trimarchi says. However, practices like frequent evaluation can help combat the uncertain future. Mr. Trimarchi offers five tips for creating a strategic plan in today’s world.

Follow the strategic plan anatomy. The strategic plan establishes several strategies that help focus resources to better achieve mid-range goals that support the organization’s mission and vision. A strategic plan has a cascading anatomy. The mission and vision serve as the touch stone and rarely change. 

Goals are three- to five-year targets that if achieved would move the organization towards its mission and vision. Strategies are specific actionable approaches. Measures monitor progress towards the goals and are the tool used to determine if particular strategies are working.

If a measure indicates a strategy is not effectively moving the organization towards its goals, then the strategy should be discontinued and a different strategy should be launched. Adhering to this cascading anatomy (mission, vision, goals and strategies tracked by measures) helps hospitals avoid drifting away from the core mission and vision in uncertain times yet allows organizations to remain flexible enough to respond to changes in regulations and the marketplace by reallocating resources, Mr. Trimarchi says.

Push strategies close to the mission and vision. The larger the separation between strategies and the core mission and vision the more regulatory or marketplace changes can disrupt the relevance of the strategic plan. Choosing strategies closely linked to the mission and vision introduces a level of certainty to an otherwise vague future.

Focus on a few goals. Following the “less is more” philosophy is key to forming a successful strategic plan, according to Mr. Trimarchi. If the plan includes too many goals, “not only can you not keep them straight, but you dilute resources,” he says. Instead of a list of 20 goals, Mr. Trimarchi suggests concentrating on the top five to six concerns. Hospitals can then reallocate resources to support and achieve the most important goals.

Be realistic. “Identifying the doable” is essential to strategic plans. Keeping goals and strategies realistic will help hospitals make real improvements in the organization, whereas spending time on impractical goals will stifle hospitals’ progress. A common mistake people make when forming a strategic plan is including strategies or goals that are “too grandiose without enough capital or resources to accomplish them”

Mr. Trimarchi says. Identifying feasible strategies may be particularly challenging in the current environment. “Ascertaining the doable is somewhat dependent upon your ability to predict the future,” Mr. Trimarchi says. He suggests leaders honestly ask themselves whether they can actually implement a strategy to help ascertain whether a strategy is realistic.

Develop really good measures. One of the most important elements of an effective strategic plan is developing measures to monitor progress made towards the goals. Depending on what the measures show, hospitals may have to alter strategies to better reach their goals. “It is so important today to have really good measures to monitor where you’re going because the environment is changing so fast and you may need to change strategies,”

Mr. Trimarchi says.Mr. Trimarchi describes a measure Southwestern Vermont Medical Center used to assess progress in its goal of reducing CT scan utilization. SVMC wanted to lower CT use per patient because of the harmful effects of radiation. Simultaneously, however, the hospital was trying to open a new market. If the hospital measured the overall volume of CT scans, the numbers would show an increase because of additional patients from the new market. Instead, SVMC tracked the number of CT scans for patients from a particular zip code in the original market.

This technique more accurately measured progress towards the goal of reducing CT scan utilization because it reflected CT use per person within a defined geography. As the overall use of CT scans increased due to an expanding market, the CT scans per zip code decreased, suggesting lower usage per person. This example demonstrates the complexity of thinking required to develop useful strategic measures.

The rate at which hospitals should measure progress depends in part on how fast hospitals anticipate meeting their goals, according to Mr. Trimarchi. A short-term goal will require more frequent tracking and evaluation of measures, such as monthly, whereas long-term goals can be reviewed quarterly. Regardless of the frequency of review, the question that should be answered is ‘Are we making progress or do we need to change our strategies?’ Mr. Trimarchi says.

Adhering to these five basic practices can help hospitals develop a strategic plan that is focused, effective and flexible. By leveraging measures to continually evaluate progress towards the goals the strategic plan becomes a living document that can guide an institution through uncertain times.

strategies for hospital financial planning in an era of value, consumerism and growing drug costs

As hospitals more fully embrace value-based care and as patients begin to shoulder more of their own healthcare costs, traditional financial planning strategies may no longer hold.

In a panel discussion at Becker’s 5th Annual CEO + CFO Round table in Chicago, four financial leaders and experts from the healthcare industry discussed these trends and how they have adjusted their approaches to financial planning.

Panelists included Janice James, co-founder and managing partner of Prism

Healthcare Partners, Lisa Carlson, interim CFO of Chilliness, Ohio-based Adena

Health System, Dennis Hesch, executive vice president and CFO of Urban-Ill.-based Carlie Health System, and Stan Frazier, vice president of solution engineering at RelayHealth. Here are five takeaways from the discussion.

1.  Focus on quality and cost improvements will follow. At this point, every hospital needs to be invested in some way in driving quality improvements. “There is a cost to quality that no one can afford not to take on,” Mr. Frazier said. A focus on care standardization and providing value for patients can help drive down costs, too. “It’s very important we focus on clinical quality as we move forward, and this will inevitably lead to discussions about cost control,” Ms. James said.

2.  Don’t isolate financial planning. “Most of my time in healthcare you could do the accountant-in-a-dark-closet approach to financial planning and make some reasonable assumptions; know what investments are required for the status quo,” Ms. Carlson said. Now these assumptions need to be re-based for the new healthcare environment, she said. Every healthcare organization is at a different point on the journey to value-based care, and sometimes departments within an organization have made varying levels of progress. “Financial planning can no longer be in those three- to five-year plan ranges,” Mr. Hesch said. “It requires continual moderating.”

3.  Adjust revenue cycle management for the new payer — patients. Increasing out-of-pocket costs and the rise of high-deductible health plans means patients are writing their own checks. “You used to deal with 15 or 20 players. Now you are dealing with hundreds of thousands of patients. It’s much more complicated and much more labor intensive.” Mr. Hesch said. Revenue cycle processes need to be sophisticated to collect from patients with any success. Mr. Frazier suggested investing in eligibility and estimation products that help pinpoint a patient’s propensity to pay so providers can tailor revenue cycle strategies and efforts effectively.

4.  Invest in experts to get the most out of your data. “Data analytics is the biggest place everybody is looking to capture and drive improvement,” Mr. Hesch said. But, he added, “You need actionable data at the right time to affect change.” Many organizations are doing a great job collecting data, but not-so-great job of interpreting it. This means more providers are investing in data scientists and experts who can really dive in and make data useful for their organizations.

5.  Bring pharmacies in house to help control drug cost increases. “Pharmaceutical cost is one of those areas that is really escalating across the country,” Mr. Hesch said. “When you are taking on risk, it’s hard to control [drug costs]. You can see huge swings year to year.” To help offset this swing, he said his organization brought pharmacy in-house to grow overall profitability on the drugs they prescribe and to better understand costs at a manufacturing level for prescriptions.

How Hospitals Should Approach Financial Planning in Changing Times The basic tenets of financial planning by hospital and care system leaders remain the same, but the status quo is no longer the baseline. Evolving reimbursement models, physician alignment, exposure to health insurance exchanges, emerging retail initiatives — all of these developments, and more on the horizon, necessitate a continuous strategic financial planning process that is integrated, disciplined and supported by analytics.

The American Hospital Association’s Hospitals in Pursuit of Excellence team collaborated with Kaufman, Hall & Associates to provide step-by-step advice on the financial planning process and how it can help hospitals and care systems to plan for value-based care and payment.

“Navigating the Gap Between Volume and Value: Assessing the Financial Impact of Proposed Health Care Initiatives and Reform-related Changes” was written by Jason H. Suss man, managing director, Kaufman Hall, and Brian R. Kelly, executive vice president and chief financial officer, Excels Health. According to Suss man, “What’s important now is building financial projections that reflect reality — that are not aspirational but operational.”

It is important to follow a time-honored, fundamental financial planning principle: Cash flow must be sufficient to meet the strategic capital needs of the organization, within an acceptable risk tolerance. To provide high-value care, an organization must (1) establish parameters of financial performance, (2) balance sources and uses of capital,

(3) estimate a future financial trajectory, and (4) assess how changes to key assumptions will affect its financial position.

Sound projections are integral to developing a realistic financial outlook, including setting goals and performance targets to keep the organization within its “corridor of control” — that is, balancing its strategic requirements and capital capabilities, while protecting its long-term financial integrity. This balance drives financial support for the organization’s strategic direction.

Baseline projections typically reveal sizable performance gaps relative to an organization’s strategic capital requirements, according to Suss man and Kelly. Working from a realistic baseline plan, leaders must incrementally test the impact of major strategies or changes on the organization’s ability to bridge the gap between projected results and targeted performance goals.

Strategic cost-management, focused on achieving efficiency, historically has been a mainstay of operational efforts. Suss man advises that hospital and care system leaders move beyond strategic cost-management toward strategic cost-transformation. Trustees and senior executives should ask: Are we doing the right things? Providing the right services? Are we using the right venues and the right providers? Can we sustain these over the long haul?

To continue meeting community health care needs, leaders can focus on a potential solution set that includes traditional cost-management initiatives, facilities planning and information technology initiatives, business/service line rationalization and potential partnership synergies.

Robust and disciplined financial planning is critical to providing high-quality, high-value care to patients. Traditional financial and capital planning still make sense in a changing business model, but hospitals and care systems today must be more focused on strategy, Suss man notes. Trustees and senior executives need to be proactive and adjust the organization’s strategies for ongoing success. Suss man urges leaders to be far more aware of the external environment and its changes, and then translate that knowledge internally, applying the analytics and planning, to create a portfolio of initiatives that define the organization’s road map for success.

Strategic Initiatives for Hospitals in 2013

With healthcare developing and changing under reform, it can be difficult for hospital and health system executives to pin down what to focus on strategically to achieve success this year. There are many strategic initiatives hospital and health system C-suiters can focus on right now, but Phil Dalton, president and CEO of MDS Consulting, narrowed the list down to his top 10 strategic initiatives for hospitals and systems to focus on in 2013.

Improve patient experience. Patient experience is becoming an important factor for hospitals and health systems to consider. Increasingly, patients have the opportunity to share their hospital experience through surveys and social media. “There’s an emphasis on consumer choice,” says Mr. Dalton, and patients are using the information from their peers and their experiences to make those decisions. Also, hospitals benefit when patients tell others about a great experience and encourage them to receive care there as well. Therefore, patient experience is important for both patient care and business purposes.

Measure and report quality performance. The availability of information also makes quality ratings an important strategic focus this year. Quality ratings are continually appearing online as healthcare becomes a more transparent industry. “With so much information available, people will be using that…to shape their perspective of the marketplace,” Mr. Dalton says.

Mr. Dalton advises hospital and health systems to understand the quality measurement and rating systems and focus on doing well in the areas they will be measured on. Then, hospitals and systems should promote their positive results prominently to current and potential patients and payers.

Adapt to new payment models. Even though not all hospitals and health systems have made the switch from fee-for-service to a pay-for-value model, the time is ripe for organizations to begin experimenting with performance incentives or bundled payments. “The direction is clear, that’s where we’re headed, and the question is, ‘what is your plan to participate?’” says Mr. Dalton.

The speed of payment transformation will vary market to market, but changes in payment models are here to stay, according to Mr. Dalton, and it will most likely pay off to get started now.

Address the possible impact of health insurance exchanges. Health insurance exchanges go live January 2014, but enrollment for the exchange health plans opens in October. That leaves just a few months for hospitals and health systems to prepare for their impact. “It’s a complicated issue, and there will be winners and losers,” Mr. Dalton says. Not participating in the exchanges, he warns, could mean being locked out of a financial opportunity and being left behind in the market. “Most markets will be impacted, and it makes sense to figure out as much as you can now,” he says.

Work on an approach to population health management. Healthcare is shifting its focus from episodic care to looking at the health of a population as a whole. In order to manage the health of a population, hospitals and systems need to coordinate care across the continuum and “get everyone on the same page,” according to Mr. Dalton. To do so, physicians across the hospital or health system need to have financial incentives to work together, and they need a health information exchange system in place to succeed.

Focus on clinical integration. Clinical integration is a necessary part of population health management and succeeding in healthcare today. “Without information and a complete database, [population health management] is hard to do,” says Mr. Dalton. So, hospitals and health systems need a data system that captures as much patient information as possible to make the journey to population health management easier.

Explore new physician alignment strategies. Again, this initiative ties in with the move to population health management. Trying out new physician relationship strategies, such as physician-hospital organizations, clinical co-management, ACOs, employment or joint ventures can join hospitals and physicians together on the same platform and can be used to support the population health strategy as well as capture market share. “There are multiple vehicles for alignment. All of them are important and many play a role in the same marketplace,” Mr. Dalton says. Now is the time for hospitals and health systems to experiment with different alignment strategies to see what works best moving forward under reform.

Respond to an aging population. The average age of the United States is slowly crawling upwards as baby boomers reach retirement age, and that has an effect on healthcare. “So much of healthcare has to do with the elderly and that’s where the money is spent,” Mr. Dalton explains. The elderly consume healthcare at much higher rates than their younger counterparts. Therefore, it makes financial sense for hospitals and health systems to provide special access and programs for the elderly. “Recognize that’s where healthcare is being delivered; and target the special needs of the population,” he urges.

Assess long-term sustainability. Hospital and health system executives need to candidly discuss their organization’s long-term sustainability in terms of market position, payer mix and financial situation. In many cases, organizations may need to consolidate to survive.

Many hospitals are struggling financially in today’s competitive healthcare market, and a negative financial performance makes it difficult for organizations to experiment and move forward with new programs and technology. “Most independent hospitals are finding they can’t [do it alone] so they’re looking for partners,” says Mr. Dalton.

However, even financially competitive hospitals and systems need to step back and look at their position long-term. It is important for all organizations to advance new initiatives and continue moving forward, and creating new partnerships is one way to do so. “Every hospital and system ought to be looking at a long-term plan for strategic partnerships,” Mr. Dalton says.

Assess current and future need for capital. As part of examining an organization’s long-term situation, healthcare executives need to discuss their current and future need for loans and capital. “Access to capital for upgrades will be tough for a huge proportion of hospitals that don’t have financial strength to support borrowing,” warns Mr. Dalton. For those hospitals, he says, considering a partner with better credit worthiness can help reduce overhead, share costs and improve balance sheets.

What is Strategic Planning in Healthcare?

Many people wonder what strategic planning is in healthcare and, fortunately, the answer is simple. Strategic health planning involves creating objectives and setting goals for where a company would like to go in the future, and then constructing a plan to achieve these objectives. In this industry especially, healthcare planning must take into account potential government policy changes, technological advancements and economic trends that could change an organization’s operations in a significant way. The importance of strategic planning in healthcare should not go unnoticed by any hospital or health system looking to succeed not only in the short run, but long term as well.

One key factor that should be the basis to strategic planning in healthcare organizations is the organization of the institution. Understanding the organization of the institution and how this organization is necessary for the entire system to succeed is important in creating an effective plan with specific strategies. Sometimes reevaluating who controls which aspects of the business, and the hierarchy that follows, can be beneficial. Having a sound foundation in which the organization is built upon is important so that communication and ideas can flow freely while implementing strategic healthcare planning. Designing company goals and a path to achieve these objectives allows staff at every level, from administrators to physicians, to have a drive and passion that is extremely important in the medical field.

Benefits of Strategic Planning in Healthcare

The benefits of strategic planning in healthcare are numerous mainly because healthcare planning is composed of many components. Like most businesses, hospitals and healthcare institutions are operating at many levels. From patient care to financing, health systems need to plan for the future in more ways than one. Unlike traditional plans, strategic planning takes into account what is to come for every sector of the organization, taking into account foreseeable changes for all departments.

The importance of strategic planning in healthcare is also seen when looking at an organization’s productivity. Most institutions believe that they are being as efficient as possible, however, taking a closer look at productivity can provide insight as to where improvements can be made and more specific plans can be set. Some of the key areas that a hospital strategic plan can significantly improve include:

  • Company Culture
  • Goals and Objectives
  • Operating Budgeting
  • Service Line Decisions
  • Risk Management
  • Capital Planning 
  • Cost Accounting
  • Long Range Forecasting