Outside/In: Building a Community-Centric Strategic Plan

Stephanie Randa, RN, MSA, MBA

• Why Now?

• Current Strategic Planning Process

• The Role of Data in Strategic Planning Process

• The New Strategic Planning Model

• Examples of Outcomes

Objectives

Strategic Planning Option 1

Strategic Planning Option 2

Why Change Now?

• Healthcare growth rate on the upswing

• Mergers & acquisitions increase

• Hospital beds numbers declining

• Value-based purchasing

• Physician income has remained static

• Aging population

Power of a Community-Centric Hospital

• Community centered

• Less reimbursement

• Greater rate of chronic disease

• Disproportionate costs

• Problem: Strategic planning is important

• Fact: 90% of strategies fail because of poor execution

• Solution: Use tried-and-tested tools

• Current Method Timeframe: Weeks and months

Strategic Planning

Are You Stuck in the Strategic Planning Comfort Zone?

• Large detailed strategy

• Focused on cost

• Capabilities-based

• Plan is presented to board by executive team

• Board members focus on risks

• Plan is placed in binder and reviewed every 5 years

Current Model

Previous Method

Step 1: Frame Your Choice

Move from focusing on issues to possibilities

Issue: “Declining profits or market share”

Possibilities: Describe how the hospital might succeed

Possibilities: 1. Improve reputation in the market

2. Build a new hospital

• Creativity• As long as you can imagine it, it is valid

• Consider 3-5 possibilities

• Status quo is a choice

Step 2: Generate Strategies for the Possibilities

• What must be true for each possibility to be a great choice?

• Use declarative statements rather than conditional

• Weed out the list• Determine must-to-have vs. nice-to-have

Step 3: Specify the Conditions for Success

Example: For-Profit Hospital in OhioSpecify Conditions for Success:

Move from focusing on issues to possibilities

Issue: “Declining profits or market share”

Possibilities: 1. Improve reputation in the market

2. Build a new hospital

Condition: Reputation—“Patients will come to our hospital if we improve quality of patient care; improve communication; reduce costs.”

Condition: New hospital—“Patients will come to our hospital because it is new; clean, in a new location, and easy access.”

Assessing the Validity of a Strategic Option: Improve Hospital Reputation

Industry Analysis

Business Model

Analysis

Consumer-Value

Analysis

SegmentationPopulation largest age group: 45% over

age 45; largest population centered in

existing county

StructurePopulation consist of aging baby

boomers; needing healthcare & services

CostsCosts lower than expected

ChannelPhysicians leaving hospital due to poor

quality outcomes

ConsumersQuality Outcomes

CapabilitiesLarge areas to improve but it is easily

attainable

PredictionIf patient care

improves, the

one hospital will

be challenged

Competitor Analysis

STRATGIC

OPTION IN

QUESTION

• For each choice: identify barrier

Step 4: Identify the Barriers to Choice

Example: For-Profit Hospital in Ohio

Specify Barriers of Choice:

Conditions: Reputation—Patients will come to our hospital if we improve quality of patient care; improve communication; reduce costs.

Conditions: New hospital—Patients will come to our hospital because it is new; clean, and easy to access.

Condition: New Hospital Location—Patients will come to our hospital if it is in a new location.

Barriers: Reputation—No brand recognition or long-term relationships with patients.

Barriers: New Hospital—Cost; demographics still poor; aging population; physicians still would go to another hospital.

Barrier: New Location—High cost; physicians would still go to another hospital.

• Speaking to the Customer• Focus Group

• Survey

• Data Analysis• Market information supporting barrier?

• Demographics supporting barrier?

Step 5: Design Tests for the Barrier Conditions

• Start with the least likely barrier to hold up

• Next opportunity—Improve reputation• Goal to Improve HCAPPS

• Quality measures required to be high priority

Step 6: Conduct the Tests

• Segmentation of market data

• Based on focus group of ten comprised of staff, patients, local city planner

• Survey of current patient base

• Physician focus group

Outcome: Improvement in quality measures at hospital would be the best choice to improve revenues.

Step 7: Make the Choice

Example: For-Profit Hospital in Ohio

Final Outcome:Conditions: Reputation—“Patients will come to our hospital if we improve quality of patient care; improve communication; reduce costs.”

Outcomes: 2-year plan

• Improved quality indicators resulted in 10% improvement in net revenues

• Healthgrade improved from worse than expected to either expected or better than expected within 6 months in 13 out of 26 categories

• Re-facing of the front of hospital

• Improved accessibility

Sustainability: 15 out of 26 indicators have improved.

• Representation of diverse specialties, backgrounds, and experiences• Operations managers

• Staff members

• Community participants

• Group size varies based on size of organization• If large, then use breakout groups to discuss possibilities

• 8-10 ideal

The Team

The New Model Pros and Cons

• Pro• Quick and easy

• Data-driven

• Facilitation takes little training

• Con• Unfamiliar method and concepts

• Testing may take time and money

• Scientific Method

• Creative

• “What do I want to believe?”

• Test Barriers

New Model Summary

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