Expert answer:Compare and Contrast Strategic and Fiscal Planning
Expert answer:Week 5 – Assignment: Compare and Contrast Strategic and Fiscal Planning in the Healthcare Write a paper that addresses the following:Articulate the key components of strategic planning and financial planning, and relate these to the healthcare industry.Select a hospital and locate its strategic and financial plans (available online), and then carefully examine each plan.Compare and contrast the hospital’s strategic plan and financial plan. Determine if they are aligned, and then explain your findings.Be sure to identify all private and public sources of income within your paper.Support your paper with a minimum of three scholarly resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.Length: 5-7 pages, not including title and reference pagesYour paper should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.Please view website for additional help:https://managementhelp.org/strategicplanning/index…Introduction to Strategic Planning: Increasing the Impactproduced by Wisconsin Public Television (Ripon, WI: Video Age Productions, 2012), 1 hour 1 minsCriteriaContent (7 points) Points1 Articulated the key components of strategic planning and financial planning. 22 Described a case study hospital in terms of its strategic and financial planning. 23 Derived the alignment of the case study organization’s strategic and financial plans. 3Organization (3 points)1 Included a minimum of three scholarly references, with appropriate APA formattingapplied to citations and paraphrasing. Paper is 5-7 pages long not including the titleand reference pages.3Total 10
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Week 5 – Assignment: Compare and Contrast Strategic and Fiscal Planning in the Healthcare
Write a paper that addresses the following:
Articulate the key components of strategic planning and financial planning, and relate these to the
healthcare industry.
Select a hospital and locate its strategic and financial plans (available online), and then carefully examine
each plan.
Compare and contrast the hospital’s strategic plan and financial plan. Determine if they are aligned, and
then explain your findings.
Be sure to identify all private and public sources of income within your paper.
Support your paper with a minimum of three scholarly resources. In addition to these specified
resources, other appropriate scholarly resources, including older articles, may be included.
Length: 5-7 pages, not including title and reference pages
Your paper should demonstrate thoughtful consideration of the ideas and concepts presented in the
course by providing new thoughts and insights relating directly to this topic. Your response should
reflect scholarly writing and current APA standards.
Please view website for additional help:
https://managementhelp.org/strategicplanning/index.htm
Introduction to Strategic Planning: Increasing the Impact
produced by Wisconsin Public Television (Ripon, WI: Video Age Productions, 2012), 1 hour 1 mins
Criteria
Content (7 points) Points
1 Articulated the key components of strategic planning and financial planning. 2
2 Described a case study hospital in terms of its strategic and financial planning. 2
3 Derived the alignment of the case study organization’s strategic and financial plans. 3
Organization (3 points)
1 Included a minimum of three scholarly references, with appropriate APA formatting
applied to citations and paraphrasing. Paper is 5-7 pages long not including the title
and reference pages.
3
Total 10
Journal of Business Behavioral Sciences
Vol. 26, No. 3; Fall 2014
STRATEGIC PLANNING AT UnityTrust HOSPITAL
C. Kenneth Meyer
Stephen E. Clapham
Drake University
Allison Lemke
University of Iowa
ABSTRACT:
All aspects of the heath care field are experiencing
tremendous challenges that are straining the entire system. Individuals want more
and better health care for less, the health insurance industry wants more profit,
government wants to pay less, medical staffs want better pay, medical researchers
want more resources, pharmaceutical companies are asked to find more cures,
medical equipment companies want more profit, and the list goes on. Hospitals are
an essential segment in the health care arena and many are under tremendous stress
to deliver essential care and be cost effective. This case analysis of the planning
process UnityTrust hospital undertook exemplifies the difficulty small regional
hospitals have in strategic planning in an attempt to address the differing
expectations of a variety of stakeholders (to maintain privacy the names of the
hospital and individuals have been changed). The case identifies the complex set of
organizational interests that need to be addressed in strategic planning and walks the
reader through this hospital’s attempt to initiate a comprehensive ‘Balanced-ScoreCard’ process and their attendant successes and failures in addressing quality of
patient care issues, revenue enhancement, morale and job satisfaction of hospital
employees, and community support.
INTRODUCTION
Strategic planning was originally considered the domain of the
military. Indeed, the word strategy comes from the Greek word strategos, which
means ‘army leader’ and later appeared in the 18th century to mean the ‘art of the
general.’ Strategic planning continues to be an integral part of professional military
education, and has been incorporated into all business schools’ curriculum to better
prepare future business leaders. It has been noted there is a long-standing difference
between the art and science of strategy. The art of strategy, or intuition, is “the
product of individual study and reflection, the integration of prior learning, and
perhaps, a natural inclination to think in this manner” (Yarger, 2006:6). Yarger
continues that the “science of strategy suggests that we can study strategy
formulation, theorize about it, and improve performance by better understanding the
processes involved” (2006:6). As noted above, it is the ‘science’ of strategy that can
be taught; the ‘art’ will develop with experience and introspection (if at all).
Nonprofits must also engage strategic planning as they too are facing greater
complexities that make it difficult to fulfill their missions. To that end a model of
strategy formulation must include an understanding of the critical components of the
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Journal of Business and Behavioral Sciences
dynamic forces that are likely to shape both the external and internal environment
of the organization.
The strategy process occurs in three stages that are not independent.
The first stage is to formulate the strategy, once the strategy is formulated it is
necessary to put the strategy into action or implement the strategy and finally it is
important to determine the size of the gap between anticipated expectations and
realized expectations and make necessary adjustments, the evaluation and control
stage. Formulating strategy must begin with an understanding of the organization’s
mission, i.e., who are we, what do we do, why are we here. Once we know who we
are, we need to know where we want to be in the future, so a well-conceived strategic
vision will help define the organization’s future course. Next, broad financial and
strategic objectives are agreed upon. To achieve the objectives and move toward
the vision, strategic options need to be formulated. Option generation is where the
‘art’ of strategy begins. The options will result from a thorough analysis of external
forces and internal factors. Options will generally include short-term, medium-term,
and long-term solutions. Each option should be analyzed, identifying both
advantages and disadvantages along with probabilities of the assumptions of
occurrences identified in the external/internal analysis. Of course, a significant
aspect of option selection involves the realization of capabilities, in other words, can
we implement the plan. Implementation occurs within three broad categories:
structure, behavior, and the allocation of resources. The evaluation and control
process begins with a clear set of criteria. The criteria should be measurable and
accomplished within a specified time frame. The control aspect results from a
feedback system to ensure the analytical data gets to the right level in the
organization where adjustments are needed.
One system that has been used to assist management in developing,
communicating, and finally measuring strategic performance is the Balanced
Scorecard™. This system is supposed to help link strategic goals to relevant
performance targets and evaluate employee performance based on achievement of
those goals. The following is the case study of a small rural hospital that was
experiencing continuous financial loss. The CEO realized that change was essential
if this nonprofit hospital was to survive.
THE HOSPITAL
The UnityTrust Hospital (UTH) is a not-for-profit community based
medical center in a regional economic hub in the mid-western United States. As an
inpatient acute and skilled (swing bed) medical-surgical center and inpatient
obstetrics services, it provides essential complimentary services as a day surgical
center and clinic for visiting physician specialists. UTH is located in a reasonably
upscale city of nearly 25,000 and, therefore, has many of the same dilemmas that
other smaller rural hospitals encounter with the well documented and inadequate
reimbursement policies used by third party payers, especially Medicaid and
Medicare recipients, coupled with an increase in facility usage rates by uninsured
patients. As a small 80-bed hospital it often found itself competing with the larger
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Meyer, Clapham and Lemke
comprehensive, trauma and acute healthcare facilities located within two-hours or
less commuting distance.
In addition to the economics associated with reimbursement schedules and
scale of operations, UTH struggled with the recruitment and retention of healthcare
workers such as physicians, internists, surgeons, anesthesiologists, psychiatrists,
obstetricians, registered nurses (RNs), physical therapists, pharmacists, and the
complementary or allied health care technicians and specialists. The administrative
staff was sensitive to the wage and salary differentials between what they could offer
compared to the large urban centers with their “enlightened” litany of benefits and
perks such as tuition reimbursement, flexibility in time and shift schedules, child
care facilities, and even satellite locations. UTH, nevertheless, had to compete
effectively on a regional basis and maintain a strong, high-quality healthcare
presence within their community.
It was a turbulent time for UTH and its CEO Alexander Hopkins,
who often spoke eloquently about the problems hospitals faced. He stated, “It was
the best of times for some and the worst of times for others.” He further stated that
failure was not an option and that UTH faced a similar set of problems and
circumstances as found across rural America. Throughout his tenure at UTH he was
not one of those executives who failed to engage in strategic analysis and planning
and leave to UTH’s fate to “twist and turn” in the dynamic winds of uncertainty, fear
and change. For Hopkins, planning for success was not an option – – it was an
essential and mandatory requirement and obligation. He further noted when
speaking to UTH’s board of governors, the often-mentioned truism, “If you don’t
know where you are going, any route will take you there – wherever ‘there’ is.”
However, for Hopkins, it was also important to keep in the “dashboard” of leadership
the dozen or so concepts that made up his core managerial and leadership philosophy
and lexicon. He often stated that without compromise, UTH must be customer
oriented, results based, people centered, multicultural, proactive, no excuses, high
quality, transparent, entrepreneurial, change oriented, high learning, and a
competitive health care center.
Faced with the plethora of increasingly daunting economic,
financial, and human resources management issues, CEO Hopkins knew that he had
to plan for success in a topsy-turvy, upside-down, inside-out set of environmental
challenges. He knew full well the status of the financial ledger for the hospital-receipts of gross revenue averaged about 30 million dollars annually and expenses
exceeded revenues by nearly 11 million dollars per year–and this untenable situation
would likely continue unabated for the next five years. Then, he felt, just maybe,
the hospital might be able to reign in the deficit financing and perhaps produce a
balanced budget–the first one in nearly a decade. With all of the economic data
and projections in shambles and, at least on paper, simply wishing the problems
away would not work if he were to plan successfully. He had to identify and use the
best tools available if collectively the hospital was to emerge from the swamp and
discover a future “oasis” state. He believed in the future and the inevitability of
managing change and he, like other small hospital administrators, found a system
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Journal of Business and Behavioral Sciences
that they believe could be used successfully for strategic planning purposes: The
Balanced Scorecard (BSC) system.
The Strategic Management Plan: Positioning for Health Care Success
CEO Alexander Hopkins, hospital administrator, along with a
freshly minted administrative team comprised of highly selected department heads,
under the ever-watchful eyes of Dr. Royce Gabriel, M.D., began investigating the
merits of the Balanced Scorecard system in 2010. The old system used for longrange planning was an elementary one that simply used the perfunctory steps in
conducting meetings where guesses were offered of the present situation and
brainstorming options for solutions followed. Although, useful on a short-term, it
did not provide the depth and comprehensiveness that UTH required if it were to
survive–not to mention strive–in the 21st century.
Initially, the administration team was led through a number of
learning and training presentations, simulations and “hands-on” exercises in order
to become familiar with BSC. Once they had a fundamental understanding and
appreciation of the different steps, stages and essential, but complicated, processes
associated with the selected strategic planning system, the BSC was communicated
system wide to all hospital employees and stakeholders through The Periscope – the UTH newsletter.
The article of introduction was entitled “A time to plan, a time for
change: Our mutual future.” As such, it outlined the essential ingredient of the BSC
system:
Balanced Score Card was intended to keep UTH properly focused on
essential goals.
BSC is a proactive response to competitive and threatening external forces
such as financial pressures and exigencies, regional competition,
consumerism, regulatory reporting mandate and requirement, new
technology, and the need for a “state-of-the-art” digital information system.
The BSC directive was set out in “crystal clear” language on a one-page
flyer in order to promote readability, understanding or comprehension, and
wide spread participation. The BSC is intended to align UTH’s mission and
strategy with organizational values and behavior.
The BSC is intended to align UTH’s mission and strategy with
organizational values and behavior.
BSC is a powerful communication and collaboration vehicle for all
employees, that facilitates team based accountability in the pathway to
achieving strategic objectives.
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Meyer, Clapham and Lemke
BSC: A Multiple-Stage Planning System
Dr. Royce Gabriel led the BSC leadership team through the processes
beginning appropriately with establishing the hospital’s mission and vision
statement. Accordingly, they reached consensus on the following statements and
then communicated them to all employees:
Mission: “To meet Community needs by providing impassionate
and personalized healthcare services.”
Vision: “UnityTrust Hospital will be firmly established as a
treasure community asset, reaching beyond the medical center walls to demonstrate
our dedication to wellness, the healing of the sick and the relief of suffering.”
During the first several months of 2011, the BSC leadership team
frequently met to discuss the BSC structure and strategy options for the hospital. In
the spring of 2011, they decided upon and introduced their primary strategic goal
areas for the hospital. Goals were developed around five key “theme” or “pillar”
areas. The “5C” themes keys to the hospital’s future planning efforts were: the
Consumer, the Customer, Competition, Cost and the Community. For each strategic
theme, the BSC Leadership team developed strategic goals:
Strategic Theme: Consumer (Consumers were defined as inpatient or
outpatient consumers of hospital services).
Associated Strategic Goals: 1) Grow net revenue more
than expenses each year; and 2) maintain overall patient
satisfaction rating average score above 86.
Strategic Theme: Customer (Customers were defined as hospital staff and
physicians).
Associated Strategic Goals: 1) Fully staff emergency room
ER staff with hospital employed ER physicians; 2) recruit
physicians for general surgery, orthopedics and ear-nose-and
throat (ENTs); and 3) improve employee satisfaction scores by two
(2) percentage points per year.
Strategic Theme: Cost (Total operating costs)
Associated Strategic Goals: 1) Maintain a five (5) percent
operating margin through an increased understanding of
profitability; 2) grow revenue and manage expenses at a level of
expenses to revenue at which the hospital would be able to fund
growth and development
while minimizing exposure to debt
[This percentage was benchmarked at the 75th percentile for likesize organizations].
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Journal of Business and Behavioral Sciences
Strategic Theme: Community (Municipalities, businesses and households
within a defined geographic region)
Associated Strategic Goals: 1) Increased awareness of
hospital services; 2) maintain a positive image through the hospital
foundation’s activities in the community.
Strategic Theme: Competition (Hospitals, medical and surgical centers
within a two hour commute)
Associated Strategic Goals: Increase market share 1%
annually for 3 years as measured by patients served and hospital
bed utilization.
Following the formulation and introduction of the “5C” Strategic
Themes, UTH implemented them throughout the hospital. CEO Hopkins was aware
of cognition research that suggests that visual aids help simplify complex cognitive
tasks (see Glenberg and Langston, 1992). The organization did not immediately
develop a BSC Strategy Map to link objectives within theme/pillar areas to
achievement of broader strategic goals and hoped for results. But by late August
2011, a strategy map had been developed within the framework of BSC. It was
perceived to be the best fit for UTH as displayed in Exhibit 1, UnityTrust BSC
Strategy Map. As illustrated in exhibit 1, the BSC Strategy Map integrated the
objectives that had to be met in order to fulfill the mission statement of meeting
community needs by providing compassionate, personalized health care services.
Implementation/Cascading: The BSC Leadership team worked
diligently in developing the basic BSC themes/pillars know as the “5C” themes and
their associated objectives. The team developed a timeline for rolling out and
implementing the BSC plan within the organization. This process is known as
“cascading.” Accordingly, they targeted these timelines for a successful rollout:
June 2011: Introduce the BSC concept to Board of Directors.
Describe goals and benefits of the scorecard, and how it relates to the strategic plan.
Make presentations to department managers’ meeting, and identify 4-5 department
managers who would be willing to take the lead in implementing the scorecard in
their department.
July 2011: The 4-5 identified department managers would work
with the CEO to refine their scorecards, assessing the hospital’s current position
and developing action plans.
August 2011: Present the BSC to the board of directors and all
remaining department managers.
September 2011: Begin monitoring data and current position.
Begin taking steps toward the action plans.
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Meyer, Clapham and Lemke
October 2011 – January 2012: All remaining Department Managers
create their own scorecards by adopting measures from the corporate scorecard and
adding 2-5 department measures of their own. Begin conducting performance
evaluation using the scorecard tool during the next cycle of evaluations.
The timetable presented was an ambitious one, especially for a planning
process that involved so many different stakeholders and their specific, although
sometimes “parochial” interests. For the BSC leadership team the “cascading”
elements were ambitious ones and, as
displayed, ranged from briefing the board of directors to educating
departmental managers who were in lead positions in implementing the scorecard,
to data collection and monitoring, creating their own objective, quantitative
departmental measurements (metrics), and then successfully implementing their
own scorecard performance evaluation.
Using their new scorecard performance evaluation tools, department
managers evaluated employee performance in three areas: 1) basic competencies for
their department-specific duties, with employees able to earn up to 40 points by
performing highly in this ar …
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