Physicians and healthcare executives can no longer treat the business of a medical organization as an afterthought. Increased regulation, dominance by government payers, remote and internet delivery systems, and electronic medical records have all entered the industry uninvited and often are met with resistance by current management.
One of the reasons healthcare managers resist change is that many of the individuals who manage medical practices and organizations come from a provider background and have been trained in the science of healthcare, not in the business of healthcare.
Strategic Planning
A key element in business management is strategic planning, which can move a business/practice that is being buffeted by changing economic forces to one that shapes its own future. It is an organized, step-by-step review of the business, the economy, and the environment in which the business operates.
Choosing Strategies
One of the key elements of strategic planning is evaluating alternative strategies that have been identified as necessary next steps. A conceptually easy method of evaluating alternative strategies is to identify the project or result’s key drivers of success by having a roundtable discussion with all the stakeholders about a completed project or successful result and working backward to identify the elements that created the success.
Examples of the key drivers include:
Time to implement
Cost to implement
Impact on staff
Fiscal impact
Impact on patients
Impact on volume
The next step is to work with the implementation team to identify strategies to establish the project or produce the desired result. One strategy is for the team to develop a grid with the key elements across the top and each strategy along the left side. They then assign each strategy for each key driver a numeric score between 1 and 5, with 5 being the most positive and 1 the least positive. The strategy with the most points can be considered the most promising. For example, Table 1 illustrates that adding morning hours is the best strategy for this organization.
This is a simplified method; the rating scale can be modified to a scale of 1–10 or 1–100. In addition, the topics to consider can be changed based on the key issues that need to be addressed in the medical organization.
Although the process of getting to these strategies may seem like a considerable amount of work, time spent on this process often eliminates costly selection processes. More importantly, it puts the organization in the position of creating its own success. Medical organizations that make researched decisions regarding strategy are more successful than those that simply react to market forces.
Leaders, Teams, and Timelines
After each strategy is ranked and prioritized, the next step is to identify who will be accountable for the strategy’s implementation. In smaller groups, this often falls to one or two individuals, but having several people engaged and supporting the process will make each strategy easier to implement and will improve the chances of long-term success.
The person responsible for the strategy is also responsible for conducting the research and compiling all the relevant information necessary to create a detailed action plan. For example, if the organization plans to add morning hours, an example of a simple step-by-step process is:
Select a launch date.
Designate the earlier hours.
Determine staffing needs for additional hours.
Determine if additional hours can be staffed without increasing overhead.
Identify barriers to access by patients during nonpeak hours (building access and parking).
Develop a provider schedule.
Create a staff schedule and hire additional staff.
Publicize the new hours.
Design marketing materials that announce the new hours (ads, social media).
Develop a budget for marketing and staffing.
Submit a plan for approval by the leadership.
Finalize a launch or go-live date.
During the creation of the detailed implementation plan for any strategy, it’s important to get the feedback and buy-in of the other employees. A plan that doesn’t have employee support will be doomed to failure. Listen and acknowledge objections. It is better to recognize objections before launching the project than to try to solve problems after the launch.
The next step is to identify specific steps and assign a realistic completion date to each (see Table 2 for a simple format). It’s helpful to know how long each of the steps will take to complete so the timeline is reasonable and realistic. For example, placing ads and publicizing the new hours might require 60 minutes to call local media, or it might take weeks as internet posts are updated, websites are changed, and ad rates and other agreements are negotiated.
A process for ensuring accountability is also necessary. For a project to proceed in a timely fashion, each team member should have specific dates and times to complete assigned tasks. Often, actions necessary for completing new strategies will require team members to step outside of their comfort zone and accomplish tasks that are not in their job description (e.g., negotiating rates for a new ad) or are in addition to a full schedule. If the strategies are to be implemented in a timely fashion, everyone responsible for implementing the strategy must be accountable for completing their assignments on time.
Measurable Results
Just as in any clinical treatment, a strategic plan should measure the results. For example, in measuring the results of expanded hours for a medical organization, factors to be considered might include expenses, net income resulting from the new hours, and the number of new patients per week.
Once these results have been selected as measures of success, the accounting and recordkeeping system must be modified to track the relevant numbers. Most organizations do not measure revenue generated by hour or expenses incurred by hour, and they may not keep track of new patients per week. Therefore, the current bookkeeping systems should be reviewed and additional levels of recordkeeping designed so that the values used in the measurement are tracked properly from the beginning of the project. This is also critical for the start-up expenses that are incurred. Remember, what gets measured gets done!
Many accounting systems can code all income and expenses to a special “class” that can generate its own profit and loss. Depending on the significance of the strategy, accounting records measuring the results may be kept for a few months or a year, or they may become part of the regular monthly reports the accountants provide. The reports should not only cover the results for the current period (week, month, quarter), but also they should be comparable week over week or month over month, so that progress or trends can be identified.
Once the reports are designed and the systems are revised to track the relevant data, the team members accountable for the success of the project should begin receiving weekly reports on results. These reports will give the team regular and ongoing feedback regarding what is working and what is not.
The Final Step
The last step is to have a final meeting with the team members accountable for implementation and other stakeholders who have an interest in the success of the strategy. At this meeting, everyone should raise potential problems and obstacles to overcome if the project is going to be a success. Everyone should envision any obstacles or problems that are likely to occur, assume a worst-case scenario, and list potential issues. Then, put in place solutions that will resolve these problems should they appear.
Another consideration is how the new strategy will affect all areas of the enterprise and what potential problems and obstacles will be created by the new strategy. If the organization adds more hours, this will increase the traffic in the office, which could interfere with patients coming in for early blood draws.
Anticipating potential pitfalls and creating solutions will likely reduce the number of fires that need to be put out in the first few weeks of the implementation of the plan.
Proceeding from Concept to Reality
Almost by definition, a strategy can never be fully implemented because everything that is assumed when formulating it — about customers, technology, regulation, competitors, and so on — is in a constant state of flux.
CEOs and their business unit leaders must continuously evolve their strategies (i.e., the fundamental choices listed above) if they are to remain relevant and competitive. And if that’s the case, there will always be a gap between where their companies are and what their strategies call for. Closing that gap is “implementation.” Thus, strategy and implementation are running continuously in parallel rather than in sequence, as Ken Favaro describes in his March 2015 Harvard Business Review article, “Defining Strategy, Implementation, and Execution.”
Garnering Support for the Strategy
Implementation consists of taking the actions to create something new and then evaluating the result and constantly modifying the actions until the desired result is achieved. An informal survey of business publications identifies several key elements necessary during the implementation stage of any strategy: acceptance and support for the strategy by the key stakeholders, a clear understanding of the decision-making rights of the staff accountable for implementation, and open and immediate communication from the top down and the bottom up.
Any significant strategy should be communicated to the staff throughout the planning process, and all levels of staff should have been given the opportunity to contribute to the plans. The physicians, providers, and administrators of a medical organization must be 100% in support of the strategy, and it must be clear to their staff, patients, and others that they are excited about the upcoming changes. Any hesitancy or second-guessing must be resolved immediately and not left to spread throughout the organization.
Everyone should be encouraged to bring concerns or problems to the person accountable for the strategy and be acknowledged, not ignored, when they do bring up a problem. Any problem identified is an opportunity to make the strategy more successful.
A critical part of this step is that administrators and staff be given the authority to make decisions at a certain level of operations on the spot and that the owners and higher management will support those decisions if they are within the approved guidelines. This gives each employee the ability to react quickly to unexpected issues that might arise in implementation.
Once the situation is resolved, the decision should be reported to the person accountable for implementation so that any impact of the decision on other areas of the process is identified and accounted for. In this way, the action plan is constantly being updated for new actions and revised dates. The plan should be available to the entire team and be discussed at a weekly meeting.
Declaring Completion
An often-over-looked step in implementation of a strategy or set of strategies is to declare completion when the project is operational, the strategy has been implemented, and the action is complete. Unlike a celebration by the members of an athletic team at the end of a game or match, the completion of a business project is seldom formally celebrated. The acknowledgment of completion is often obscured by day-to-day problems or the dragging out of finishing touches so that the project has been operating for months before all the details are finished.
When developing an action plan, it is always important to include milestones — places where sections of the plan can be declared complete, and the progress to date can be celebrated. At this point, some of the results from the action should be reported, and the entire group can be acknowledged for their contribution to the new reality.
Reaching milestones should be shared with not only the employees, but also all stakeholders in the organization, such as the patients, referring physicians, and hospital staff. By sharing these accomplishments, you are establishing in the minds of these people that you have an organization that is growing and expanding, and it is a great place to be. You are seen as a successful organization, and this alone can increase referrals.
Rewarding Performance
It’s a common axiom in business that what gets measured and reported gets done. This is because it’s a human trait to want to be accepted as a valuable member of the group. It is also important to be aware that direct rewards always affect performance, so we can say that what gets measured, reported on, and rewarded gets done faster.
Therefore, all strategies should have milestones, as discussed above, and along with the celebration of completion, there should be a reward. The reward doesn’t always have to be monetary; it can be recognition through an inexpensive gift, such as a coffee mug, or a prize with another perceived value, such as a coveted parking space. It really doesn’t matter; the real reward is public recognition for a job well done. These little breaks to celebrate completion keep the energy and commitment up for the project and allow the entire staff to feel part of the team.
Evaluating Success
Evaluation is the final step in the strategic management process. Without this step, the organization does not know whether it reached the desired goal and whether that goal was indeed in line with the organization’s mission and vision statements.
Every planned and executed action will produce results. The question is whether the results are what was expected or anticipated — and even whether they are results worth keeping.
The evaluation should take place 6-9 months after the project is complete and operating. By then, results will have been measured for a determined period, and performance month over month can be tracked. The project’s effect on the organization should be clear, as should the results of mid-implementation changes.
Once all the data have been analyzed, management and the implementation team should identify the three most desirable results of the project. One of the desirable items might even be a process that didn’t work well and was eliminated quickly.
The key is to identify what made those results work and then determine how that success can be replicated in any future project. When possible, a complete summary of the steps that led to the success should be documented in memo form and kept in the project resource file.
The team should also identify areas that could have been done better, then determine what led to the problems and how the process could be revised so that a different result might be obtained. These notes should also be kept in the project resource file.
It is important to set up analysis and measurement as an ongoing process. Many of the measurements should be incorporated into the monthly or quarterly reports so that the organization can make sure that the new process or strategy continues to create the success envisioned and continues to align with the mission and vision statements.
The Bottom Line
This process of identification and implementation in a business strategy is detailed and can be time-intensive. A busy organization might take a year to fully identify and implement a strategy; another organization might identify and implement a strategy during a single meeting. Regardless, the process is similar in each case.
When deciding to implement a new strategy, management should consider the time and dollars committed when determining how many of these steps to incorporate. Clearly, when the time and financial commitment are large, the process should be done in its entirety, but if it is a decision as simple as changing the professional staff uniform, some of the steps identified above can be modified and combined.
The bottom line is that for an organization to thrive and not just survive in the current healthcare environment, it needs to be proactive. This is easily accomplished by having a strategic plan to address where the practice is within the market, where it wants to be, and what gap or gaps must be closed for the practice to be operating consistently at the top of the industry.