Strategic Management Healthcare 3 Parts
Part 1) ASSESSMENT of a Healthcare Organization
You must construct a hypothetical health care facility (community hospital, skilled nursing facility, or mental health facility etc).
Pine breeze hospital has presently scored a great in patient safety which truly demonstrates commitment towards reducing medical mistakes and accidents. It actually consists of 1032 beds receiving at least 50400 admissions annually. This implies that it has a large capacity of holding patients as compared to other health facilities within the country with less number of beds. On the other hand, Pine breeze hospital has an approximate of 2,300,000 SF (213,676 m²) where a bigger part of the land has been constructed. It therefore reveals that there is still some part left for expansion purposes especially in establishing modern facilities.
It will be documented that Pine breeze is a general hospital geared at providing fast and quality services to its clients. Some of the basic services provided in this hospital include anesthesia services, behavioral medicine center, Food & Nutrition Services, Radiology and Diagnostic Imaging, Outpatient Surgery, Intensive Care Unit, Outpatient Surgery, Labor & Delivery, Newborn Nursery and Laboratory/Pathology. Social services are also provided where each patient obtains a planned program basically for follow-up at discharge and continuity of care. It offers surgical services which extend to include outpatient surgeries, minor procedures, inpatient surgeries and parenteral therapy. Volunteer services are also offered which help the hospital to realize its mission to provide cost effective and high quality health care services as well as promoting these services to the community.
Pine breeze is a not-for-profit medical practice where is only geared at providing cost effective services to its clients devoid of the profit motif. This ensures that the service providers are patient oriented with the desire to provide high quality services. Everyone is therefore fully responsible for payment of his or her hospital accounts. For conveniences, Pine breeze offers various payment options which extend to include debit or visa credit cards, American Express, discover and Mastercard. Other payment options include online services, wire transfers, money order or even cash. The not-for-profit motif therefore ensures that services are provided as per the ethics of this facility devoid of any possible vices from the health professionals.
The type of organizational structure in this health care facility is a hierarchical one where the ladder actually ascends to the top authority figure. The various departments have clear roles as well as managers. This type of structure ensures that policies enacted by the top management team are clearly followed by the rest of the health professionals in the smaller departments. It greatly helps in the achievement of the organizational mission as well as objectives in their service provisions. In addition, hierarchical structure ensures that there is departmental loyalty which is highly required in health care units.
Pine breeze hospital has actually a distinctive culture which is rooted within its ideal principles which include commitment to progress, mutual respect, professionalism, collegiality and teamwork making this facility to be a stimulating environment for practicing, teaching and conducting research. It will be documented that within this facility, service providers attend families, patients as well as one another with responsiveness, courtesy, concern and respect. This climate supports and nurtures the fullest contributions that everyone is very essential to Pine breeze hospital’s success in research, education and patient care. It will thus be realized that sustaining and maintaining this climate are the very responsibilities of all who learn and provide service in this facility.
The leadership of Pine breeze clearly recognized in advance that the American health care urgently required reform so as to ensure the future of high quality patient care. The leaders further understood that extensive collaboration and consensus would be indispensable to efficacious health care reform. The Health Policy Center organized key stakeholders which include academics, health care providers, representatives from medical industry as well as related businesses, political leaders, insurers, and patients for an array of events which helps to develop consensus-driven principles so as to notify the health care reform practice.
The healthcare facility basically adopts a formal type of communication style known as the downward communication. This form of communication occurs when the managers are able to talk to their employees. The top management team explains the correct work for the employees, job instructions or explaining new procedures. Ideally, downward communication ensures that there is effective flow of information regarding service provision to the clients within the organization. Even though this communication type is very vital towards the organization, it’s essential that managers as well as other health professionals communicate effectively devoid of talking down to the employees.
Pine breeze hospital as explained above is a not-for-profit organization which is located in Rochester, Minnesota, a strategic place to offer health care services to the low incomes earners as well as the noble classes. It will be documented that this facility truly offers high-performance facility design, exceptional echelons of patient-centered care as well as advanced medical technologies. The key factor behind its location was to take part within the millennium development goals that are aimed at curbing disease within the contemporary society while ensuring a better healthy future. This will help in increasing the productivity of the workers hence increasing the level of the national income and a possible increase in the employment rate hence a decrease in the dependency ratio and level of poverty.
As earlier discussed, Pine breeze has 1,032 beds within both the surgical and medical facility. It receives at least 50400 visits in a year basically seeking medical assistance. This implies that this facility is among the very best hospices in the country due to its huge demand as compared to other health care units. Last year it fully performed 32,980 annual inpatient and 15,121 outpatient surgeries. Within its emergency room it receives about 67,542 visits. In every year, at least 500,000 people originating from all possible walks of life come to Pine breeze Minnesota. It will further be recognized that the facility’s patients in fact come from all 50 states and nearly 150 countries.
Part 2) IDENTIFICATION of Threats
Once the assessment is completed on a healthcare facility the second step is to identify internal and external threats to the integrity of the organization. In this step you are to identify those issues affecting your organization. Begin with issues impacting all healthcare facilities and then, provide three additional issues that are specific to your facility. Therefore, it becomes prudent to perform a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis. Please cite sources.
Internal: Strengths & Weaknesses
Under this category, the basic resources as well as capabilities associated with most of the health care units within the entire country are listed. Most of the health care units have strong brands that actually help in surpassing the rest of the organizations in terms of competitive advantage since they are well known by most of the people. Economies of scale happen to be another common strength within most of the hospitals where they are geared at ensuring that they have extra products as well as staff to avoid any possible shortages or delays to their clients. The prices paid for the services provided are relatively low. Since most of the organizations are not-for-profit they ensure that the charges passed to their clients are affordable since their objective is to ensure that there is a healthy society for increased productivity levels in the economy (Langabeer, 2008).
The additional strengths associated with Pine breeze are that it has received a commendable customer loyalty. Clients have become loyal to their quick and high quality services that they truly offer. It also offers unique services particularly within their surgical and laboratory services which happen to be an exceptional strength. Additionally, it has an innovative culture where through its competent team of health professionals, new and unique service provision techniques are invented.
Some of the organizations are feared to have weak customer service which causes most of the clients to flee since they likelihood of obtaining treatment services is minimal. This should highly be avoided to ensure that they retain their customers and increase their income levels. Other health care facilities lag behind in terms of technology making the competitive level within the market to be minimal. They become unable to provide modern or advanced services to their clients as most of the best performing hospices can do. Studies reveal that business site actually affects the overall attendance of customers as well as the performance of the business. Based on this factor, most of the facilities are located in poor locations or areas with geographic barriers. This highly affects the performance of the facility as those patients who need urgent services are unable to access the facility due to geographic barriers.
It will be realized that every organization has its own weakness and in our case, Pine breeze has a weak management. Service providers do not accomplish their duties in time. The amounts collected from the services provided to the clients are poorly managed with high chances of fraud. This has a led to a damaged reputation which is a key weakness to several organizations which gradually affects the loyalty of the customers. It may in turn lead to reduced customer attendance to the facility.
External: Opportunities & Threats
The external opportunities actually help the business to determine the ways in which they can expand to the international market regardless of the stiff competition that prevails within the market. They therefore help the business to expand in the market hence preventing any possible closure. The presence of acquisition synergies happens to be one among the various opportunities that prevail in the health care industry which greatly helps the small hospices from running out of business. It allows most of the larger health care units to acquire the small ones so as to maintain the country’s goal of enhancing a healthy society. New technology is one of the key opportunities that most of the hospices realize in the market (Daniels & Ramey, 2005). New technologies are available that make the hospitals to design new surgical services as well as other medical services that require improvements.
One of the possible opportunities that Pine breeze experiences in its marketplace is the lack of dominant competition. There is less competition paving way for expansion although it may in the long run reduce the level of innovativeness. Another opportunity is the availability of new services which actually help this facility to meet the differing needs of the customers. It will be recognized that each patient requires his or her needs to be addressed therefore the fact that there is availability of new services most of their needs will be catered gradually improving the health level within the society. The other opportunity realized by this facility is the financial leverage.
The healthcare industry in the country faces several threats were political risk happens to be one of the key threats because governments quickly change highly affecting the operations carried out within this industry. Other threats include rapid advancement within technologies, volatile costs, economic shifts and loss of key staff. One of the threats witnessed by the facility in question is the volatile revenue. The volatility of the revenues makes the process of planning within the organization very difficult delaying the possible investments that it wishes to establish. The other threat is the change of tastes of the customers where they the demand of the services provided by this facility may drastically drop. Lastly, the entry of new competitors in the market with more innovative services and products may be a possible threat (Gandolf, 2013).
Daniels, S., & Ramey, M. (2005).The leader’s guide to hospital case management. Sudbury, Mass.: Jones and Bartlett.
Gandolf, S. (2013, February 28). SWOT: The High-Level Self-Exam that Boosts Your Bottom Line. Healthcare Success Strategies. Retrieved January 9, 2014, from http://www.healthcaresuccess.com/blog/medical-advertising-agency/swot.html
Langabeer, J. R. (2008). Health care operations management: a quantitative approach to business and logistics. Sudbury, Mass.: Jones and Bartlett Publishers.
Part 3) APPLICATION of Strategic Plan
You have identified the economic, social, technologic, political and competitive changes impacting your healthcare facility. Now it becomes imperative that you address these issues in order to maintain integrity to your facility. Address the identified threats to your organization utilizing strategic management planning, strategic thinking and managing strategic momentum. Be certain to prioritize threats and include time frames (long range and short range). Utilize the concepts and apply principals of strategic management, from your readings, when developing your plan. Please do not simply restate facts.
The threats that revolve around this facility need to be addressed to as to secure future reducing possible closure of the organization. As discussed above volatility of the revenues happens to be one of the key threats. It will be realized that revenues are crucial within an organization as they allow for expansions as well as coping with the external pressures arising from the rival competitors through investing in new technologies. In case the amount of revenue generated drops, then the possibility of the business running out of the market is truly high. Therefore the management should focus on establishing ways of expanding the level of revenues generated (Blesch, 2013). This can be realized by slightly increasing the charges passed to the customers but not more than what most of the hospices are charging to maintain the demand of their service provision. An increment in the amount charged is capable of raising the revenue that the firm receives from the provision of its fast and quality services. Revenue volatility can also be reduced by determining other sources of revenue in which the facility can use apart from charges. It may obtain from aids provided by well-wishers. This may help in financing most of the activities as well as projects that the hospice would like to develop. Consultation fees, donations, gifts and other sources of income can be used so as to increase the amount of revenue that in turn necessitate investments and adoption of new technologies (Ryan, 2013).
Another threat discussed in above is the entry of new competitors. It will be documented that entry of competitors in the market slightly decreases the level of profits. This is because the organizations focus on the same customers that the existing firm was dealing. This a serious threat that the organization should be geared at addressing. The best way in which the firm can overcome this threat is to focus on using new and unique technologies so as provide better and quality services to their clients. This will ensure creation of customer loyalty were they will only be willing to consume products as well as services from this hospice. The demand will as a result be maintained or even increased thereby increasing the market share, level of performance plus profitability levels. Adoption of new technologies will actually help in creating barriers to entry since the entry costs are high and the level of competition is very stiff (Barnat, n.d.). The higher prices charged can also reduce the potential entrants in the market. Therefore the key factor to reduce the possible increase in competition is to increase the barriers to entry. Changes in the tastes of the customers may be hard to address but the firm should solely be focused on providing differentiated products and services which are cost effective. With the provision of varied services and products the differing needs and tastes of the customers can fully be addressed. It as a result maintains the demand of the customers maintaining the anticipated level of revenue. In the event this hospice does not take action to address the changing tastes of the customers it may face a decrease in the anticipated revenues.
Political risks can also be reduced by ensuring that the facility invests in various projects that can provide revenues in the event the prevailing government is out of office. This is because every ruling government enters with different policies which may greatly affect the performance of the business. The increased tax bases that may perhaps be associated with a new government, for example, may reduce the profit margins of the firm hence minimizing its chances of expanding. This healthcare facility also needs to acknowledge the micro and a macro political risk background. It will be established that micro level risks are able to be managed with far more effortlessly as they come where investments can actually be shifted to different firms, industries can in turn find new local partners, under worst case situation firms can truly file insurance claims. On the other hand, macro-level risk, is the multiplicity that you require to comprehend before it comes for the reason that if the nation in which the facility wishes to invest devalues its currency, closes its borders, or even enters into a civil war, the business as well as its money is left with very limited options (Rajwani, 2011).The management further needs to diversify its possible political risks where if the firm has some strategic business units within several geographies are required to acknowledge its cost base. It also needs to realize that some of the regions that may appear to be very attractive also carry great political risks.
Barnat, R. (n.d.). Threat Of New Entrants. Strategic Management :: . Retrieved January 9, 2014, from http://www.strategy-formulation.24xls.com/en110
Blesch, G. (2013, June 16). Financial managers warned about growing revenue volatility. Healthcare business news, research and events from Modern Healthcare. Retrieved January 9, 2014, from http://www.modernhealthcare.com/article/20130616/NEWS/306169989
Rajwani, T. (2011, May 1). Cranfield School of Management. How Firms Should Deal With Political Risk. Retrieved January 9, 2014, http://www.som.cranfield.ac.uk/som/p16495/Think-Cranfield/2011/May-2011/How-Should-Firms-Deal-with-Political-Risk
Ryan, D. L. (2013). Boom and bust again: policy challenges for a commodity-based economy. Edmonton: University of Alberta Press.