Health Management

(540163)

Lecture 5. Strategic Planning in

Healthcare organizations
 Introduction
• The success of an organization relies on its
capacity to plan for the future.
• Strategic planning is based on the
establishment of mission, vision and values
and the subsequent planning of means to
achieve them.
 Strategic planning (SP)
• “Is a management tool used by organizations
to stay focused on the mission, to set
priorities, and to foster growth and
development.”
–Cynthia M. Howe
• Is the systematic and organized process
whereby an organization creates a document
indicating the way it plans to progress from its
current situation to the desired future
situation.
 Strategic planning (SP)

• It is the set of decision-making criteria and the

decisions taken and implemented by an
organization to definitively and permanently
guide its activities and structure.
• A strategic plan will succeed only if the
CEO/Owner and other key leaders believe in
it and openly support it.
 Strategic planning importance

• To Identify controllable and uncontrollable

market forces and how they may affect the
future of the organization.
• To determine an appropriate strategic
direction
• To focus the organization
• To allocate resources efficiently
Why Should Healthcare Organizations
Use Strategic Planning?
1. Increasingly informed, demanding and non-
loyal clients with the capacity to choose, a
decision that has consequences for financing the
HO.
2. Increasingly professional and skilled
competitors.
3. Limited resources for production leading to the
increased obligation to allocate resources on a
rational basis, allowing only the best and most
efficient HOs to remain.
Why Should Healthcare Organizations
Use Strategic Planning?
4. Focus is shifted from the product or service
to the client.
5. Increases in the size of the population, their
needs, and the diagnostic and treatment
options offered has led to physical growth in
the size of HOs and increased organizational
complexity.
 It implies
• ….. that the unit of production is not the
individual but the organization.
• …….. SP has a clear transformational purpose:
a) it identifies the current characteristics specific to
the organization and the setting in which it
operates;
b) it generates a vision of how the organization
wishes to be in the future; and
c) it also defines the roadmap and actions required
to change the organization's current situation to
the desired future situation.
 Strategic planning:
Advantages, Drawbacks and Errors
Advantages : Drawbacks
• Is a rational process . •It is expensive (time invested by
• Establishes a clear and explicit members at different levels of the
framework with criteria for organization).
making day-to-day decisions and
simplifies managerial decision- •may uncover differences or conflicts
making. that the members had learned to live
with.
• Encourages the participation and
commitment of the entire HO in •Given that SP not an exact science, a
achieving the planned results ( genuine fear is that even with good
institutional cohesion). SP an organization may still fail.
• Offers a serious and credible
external image (corporate
reputation).
 Strategic planning:
Advantages, Drawbacks and Errors
Errors
Two common errors are:
• not involving the right people and
• not addressing the really relevant issues due to their being too
burdensome or complex.

 Another error is the failure to link SP to organizing the resources

(financial or otherwise) needed to carry it out. Any strategic plan should
be able to answer the question of how much it costs.

 The most common error is to put all the effort into the planning
stage, but fail to put the plan into practice. A variation of this is when its
implementation is interrupted by the arrival of a new management team
or head who wants to restart the entire process.
 Strategic planning process (SPP)
• Consists of 2 interrelated activities: the
development of the strategic plan and the
execution of the organization’s strategy.
– Done on multiyear time horizon and updated
annually.
– It is a dynamic process
Strategic planning process (SPP)
Strategic planning process (SPP)
Components of a Strategic Plan
 Components of a Strategic Plan

• Vision – Developing a
clear understanding of Example: Johns Hopkins
Medicine pushes the boundaries of
what is the preferred discovery, transforms health care,
future for the advances medical education and
creates hope for humanity.
organization
Together, we will deliver the
• Has to be realistic and promise of medicine
not something
impractical
 Components of a Strategic Plan
• Mission – Developing a
sound statement about
why the organization exists
• Core purpose of your
organization
• Presented in a clear, short
statement that focuses on
attention in one clear
direction by stating purpose
of the group’s uniqueness.
Example: The mission
of Johns Hopkins Medicine is to
improve the health of the
community and the world by
setting the standard of excellence
in medical education, research
and clinical care.
Diverse and inclusive, Johns
Hopkins Medicine educates
medical students, scientists, health
care professionals and the public;
conducts biomedical research;
and provides patient-centered
medicine to prevent, diagnose and
treat human illness.
 Components of a Strategic Plan
• Core Values and Beliefs
– Describes behaviors Example:
and ideas that are
• Excellence & Discovery
important to the
organization. • Leadership & Integrity

• What are the principles, • Diversity & Inclusion

standards, and actions • Respect & Collegiality
considered worthwhile
in the organization
Sp = The “roadmap”
leading an
organization into the
future . . .
 Steps of a Strategic Plan
• Assessment of the Internal and External Environments
SWOT Analysis : is a precursor to the strategic planning
process.
– How the organization is currently interacting with the
environment?
– What are the market opportunities and threats to the
organization?

S Str engths
Internal Environment
W Weaknesses
O Oppor tunities
External Environment
T Thr eats
 SWOT Analysis cont.
– Step 1 – In the here and now… List all strengths &
weaknesses that exist now.

current factors that have prompted outstanding organizational

strengths performance.
Some examples include the use of state-of-the-art medical
equipment, investments in healthcare informatics, and a focus
on community healthcare improvement projects.

organizational factors that will increase healthcare costs or reduce

healthcare quality. Examples include aging healthcare facilities and a
lack of continuity in clinical processes, which can lead to duplication of
efforts

weaknesses
 SWOT Analysis cont.
– Step 2 – What might be… List all opportunities
& Threats that exist in the future.
as significant new business initiatives available to a healthcare
Opportunities
organization. Examples include collaboration among healthcare
organizations through the development of healthcare delivery networks,
increased funding for healthcare informatics, community partnering to
develop new healthcare programs, and the introduction of clinical
protocols to improve quality and efficiency
Threats

factors that could negatively affect organizational performance. Examples include

political or economic instability; increasing demand by patients and physicians for expensive
medical technology that is not cost-effective; increasing state and federal budget deficits; a
growing uninsured population; and increasing pressure to reduce healthcare costs.
 SWOT Analysis cont.
– Step 3 – Plan of action… Review your SWOT
matrix with a view to creating an action
plan to address each of the four areas.
– Step 4 – Develop Operational Plans,
Monitor Actions, Evaluate Progress, and
Revise the Plan!
 Gap Analysis
• To further refine planning decisions, SWOT analysis can be
supplemented by gap analysis.
• A technique to determine what steps need to be taken in
order to move from its current state to its desired, future
state. Also called need-gap analysis, needs analysis, and needs
assessment. Gap analysis consists of
– (1) listing of characteristic factors (such as attributes,
competencies, performance levels) of the present situation
("what is"),
– (2) listing factors needed to achieve future objectives
("what should be"), and then
– (3) highlighting the gaps that exist and need to be filled.
• Gap analysis forces a company to reflect on who it is and ask
who they want to be in the future.
 Gap Analysis
• Gap analysis forces a company to reflect on who it is and ask
who they want to be in the future.
 Strategic Planning Process
Developing the Plan
– Goals
• Identify long-term outcomes to provide focus for the
planning process
– Strategies
• Outline how you will achieve your goals
– Objectives
• Identify specific, measurable results produced while
implementing strategies.
 Strategic Planning Process
Goals and Objectives Should Be SMARTER

– Specific
– Measurable
– Acceptable
– Realistic
– Timeframe
– Extending
– Rewarding
 Strategic Planning Process
Developing the Plan
– Implementation
• Tasks – assigned to various board and staff responsible
for specific items
• Timelines - established for implementation of the plan
for implementation
– Funding the plan
• What is required to fund the goals in the plan
 Strategic Planning Process
Developing the Plan

– Communicating the plan

• How will you communicate the plan to stakeholders?
– Monitoring and evaluation
• Critical to plan’s success and credibility
• Must be built into the plan
• Critical for continuous improvement
– Continuous improvement
• Focuses on improving customer satisfaction through continuous
and incremental improvements
to processes