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Strategic Planning: for hospitals and healthcare delivery systems of all stripes is more important today than it has been since the Greatest Generation emerged victorious from World War II. The economics that have ruled healthcare providers for the last 50 years are undergoing a dramatic transformation that will play out over the next five to 15 years. The nature of demand is changing (consumerism) slowly but inexorably and the supply side (e.g. hospitals, physicians and nurses) is becoming more constrained in critical areas as "products" are becoming more specialized, more expensive and more efficacious. As a result, it is becoming increasingly difficult for any hospital to "be all things to all people." To prepare for a new set of economic rules hospitals need effective strategic planning processes that articulate the following:
- Mission: too often, the raison d'etre for the organization is given insufficient attention during strategic planning. The strategy process should clearly identify the core business and the manner in which other business lines relate to the core. Passive acceptance of the Mission Statement as inviolate runs the risk of focusing the organization on what is "good" to do versus what is "best" to do.
- Vision: a two or three sentence vision phrase may be an appropriate way to provide inspiration. A vision statement, however, should be a clear, pragmatic depiction of a desired state for the organization at a specified (five to 10 years out) period in time.
- External Assumptions: just as Tom Friedman predicated fundamental changes in global economics based on a small number of transformational trends (The World Is Flat), so too the healthcare provider world is changing, driven by nine, supply/demand forces.
No one can predict the future, but that doesn’t mean you can’t think systematically about it.
— Ian Morrison, Futurist
— Ian Morrison, Futurist
- Internal Assessment: hospitals must confront the brutal facts regarding their own capabilities and limitations. These must also be assessed relative to a defined set of criteria including nearby competitors (not just hospitals but freestanding ambulatory centers) as well as a stretch goal (e.g., "the best in class.)"
- Key Strategic Issues: "Great strategists get a few big things right (Michael Porter)." The organization with 30 strategic priorities is, by definition, focused on tactics and operations as opposed to strategy. Pillars are important but they aren’t strategy.
- Resource Allocation: strategy can only be effective if it leads to a reallocation of cash and human capital to support defined priorities.
Physician/Hospital Alignment: will remain a key issue for most hospitals into the foreseeable future. While many prescriptions have been offered, virtually all address the problem too narrowly, assuming the solution is exclusively economic. Physician/hospital alignment is a multi-factorial challenge requiring a systemic approach to resolution. Hospitals need a comprehensive plan with at least the following components:
Clinical Priority Setting: the clinical experts in any hospital are the members of its medical staff (consider the implications if this is not true). In an era of clinical evolution, growing "customer" sophistication, increased competition and constrained resources, hospitals must engage their physicians in specialty specific assessments to set priorities. - Customer Support: most hospitals could do a better job of assisting physicians in efficiently providing the "best" possible patient care. A Physician Customer Support plan is required.
- Hospital Clinical Leadership: in many hospitals the existing medical staff structure is broken. Hospitals need to develop more sustainable leadership models for the future.
- Recruitment & Employment: physicians coming out of training today are increasingly interested in joining a group as opposed to running a small business (i.e., being in solo practice or belonging to a two/three member partnership). Hospitals need to understand the implications of this and determine the role they want to take in group formation.
- Business Ventures: hospitals should have a clear understanding of what's in the "toolkit" as they enter into risk/reward arrangements with members of their medical staff.
If you want to herd cats, you better understand how to attract them.
-Barbara LeTourneau, MD (Paraphrased)
-Barbara LeTourneau, MD (Paraphrased)
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Governance Design & Development: as the healthcare provider world is changing, approaches to governance are evolving as well. In order to improve their own performance, trustees are frequently undertaking one or more of the following initiatives:
- Rightsizing: to improve performance. An approach that addresses both the number of trustees and the functional composition of the entire board.
- Streamlining: the number of corporate entities within the organization based on the principle of “form follows function.”
- Clarifying: responsibilities between and among boards and committees.
- Specifying: the boundaries between the board and the CEO; clarifying the relationship between trustees and other members of executive management.
- Redefining: committee charges and the relationship of each committee to the full board.
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