A Company s Financial Management Plan

Running Head: CAPSTONE PROJECT

8

CAPSTONE PROJECT

Abstract

Virtual health care has offered sustenance during a universal health crisis with the onset of the COVID-19 pandemic. As COVID-19 continues spreading its arms and affecting thousands of people worldwide, healthcare providers increasingly utilize telemedicine to protect their staff and patients. This has become essential due to the golden rule that everybody is expected to follow, social distancing. The majority of healthcare providers have expanded telemedicine access since the beginning of the pandemic. Virtual health care has become a tool for screening and treating various illnesses and COVID-19 cases remotely and is facilitating visits that would be risky during these tough times. The transitory shifts have made way for an expansion of telemedicine. Telemedicine has ushered in a new era believed to be the next generation of healthcare delivery systems in the United States. This research paper goes through all the stages necessary for the implementation of such a project as telemedicine in AZ Hospital, from the project description, situation and industry analysis, marketing plan, operating plan, organization plan, human resource plan, and financial plan, to determine if the proposed project is worth venturing into.

Contents

1.0 Executive summary 4

1.1 Summary of situational analysis 4

1.2 Key opportunities, issues, and obstacles 4

1.3 Key recommendations 5

1.4 Key assumptions used in forecasting results from 6

1.5 Summary of forecasted operational and financial results 6

2.0 Description of the project 7

3.0 Situation and industry analysis 10

3.1 Market segmentation 10

3.2 Analysis of the competitive situation 14

3.3 SWOT analysis 16

3.4 Industry forecasts and future outlook and trend analyses 17

4.0 Marketing plan 18

4.1 Pricing plan with sourcing and analysis 19

4.2 Distribution channels and practices 21

4.3 Promotion plan 22

4.4 Product/ service forecasts 22

5.0 Operating/production plan 23

5.1 Capacity 25

5.2 Equipment 25

5.3 Processes unique to the project 27

5.4 Competitive advantage 28

6.0 Organizational plan 28

6.1 Venture ownership and form of ownership 28

6.2 Authority of respective principals 29

6.3 Management team background 29

6.4 Roles and responsibilities of team members 30

6.5 Table of organization 30

7.0 Human resources plan 31

7.1 Employee strategic plan 31

7.2 Recruitment plan 32

7.3 Retention plan 34

8.0 Financial plan 35

9.0 Conclusion 38

10.0 Appendix 39

1.0 Executive summary

1.1 Summary of situational analysis

COVID-19 pandemic has exposed the critical infrastructure needs within the overall healthcare system in the United States. Providing relevant healthcare services affordably and conveniently is critical to individuals and the nation’s national security interests. Pandemics, although rare, can have a debilitating impact on society. The pandemic has seen the death of so many people up to date. Moreover, millions have lost their livelihoods. The massive death can be accounted for by the inadequacy in healthcare infrastructure.

Furthermore, the cost of accessing health care services has shown an increasing trend over the years. Also, with the current impacts of the pandemic, this unsustainable trajectory does not seem to be decreasing. Telemedicine is a solution to many of such trends. It is a lower-cost solution that will eventually lower the cost of healthcare services. It can also be delivered during a pandemic like what is currently happening, and this makes it a useful tool during such periods of massive social and economic unrest. As a result of the pandemic, people have been forced to be on lockdown and stay indoors to abide by the rule of social distancing. This has caused individuals to be apprehensive about their visits to the hospital. Telemedicine will offer patients an opportunity to access quality healthcare services from the comfort of their homes, without necessarily having to go for the in-patient visits. This efficiency will make it even attractive to consumers.

1.2 Key opportunities, issues, and obstacles

The current pandemic has discovered the gaps present within the overall healthcare system in the United States. This gap comes as an opportunity for any business venture that is interested. Telemedicine has gained popularity, especially amidst the ongoing pandemic. Through telemedicine, patients can still get access to quality healthcare and affordable pricing from the comfort of their homes. In the case of AZ Hospital, this opportunity is even better since the hospital already offers in-patient services and has a well-established and loyal customer base. Therefore, the implementation process is anticipated to be seamless and with fewer struggles to attract consumers. Telemedicine can diversify the product offerings and the income stream of the organization. This will ultimately help the hospital harness a larger market share and higher profit margin in the long run. The hospital’s product offering will allow for flexibility since patients will choose how they engage with the hospital by choosing between telemedicine product offering and in-patient services. This diversity and flexibility will allow the hospital to gain an even larger customer base, eventually translating into higher profit margins. The hospital will also establish partnerships with other telemedicine service providers who only focus on telehealth services and not in-patient services like x-rays.

One obstacle the hospital is likely to face in this venture is competition from some of the already well-established telemedicine service providers like the Doctor on Demand, created by Dr. Phil and his son Jay McGraw. However, some strategies have been designed to deal with this issue. Another obstacle would be related to the rapid advancement of technology, making evaluations vulnerable to obsolescence as key software and hardware constituents move from being the state of the earth to out of date.

1.3 Key recommendations

Telemedicine has some special characteristics, such as shared information technologies. Most notably, it is not a discrete set of interconnected technologies or a single technology. It is a large, diverse connection of technologies, clinical practices, and organizational arrangements. Its implementation largely depends on a complex, technical and human infrastructure affected by rapid changes in the technology system. As a result, realism and persistence are important for those working towards demonstrating the promise of the service.

Also, a systematic and rigorous evaluation will be necessary, just like in any other technology. Decision-makers must have good enough information in comparing the effects of telemedicine services and applications to those of other healthcare strategies for cost, access, and quality acceptability.

Decision-makers must also fully analyze the implications of the telemedicine infrastructure and the requirements necessary for maintaining the product offering past the initial stages. Hence, there must be careful project and evaluation planning.

1.4 Key assumptions used in forecasting results

1. The hospital has a sustainable competitive advantage by offering both physical healthcare services and online healthcare services. This provides us with a strong customer base in which to leverage high telemedicine adoption rates.

2. We also have a strong and well-respected brand that is synonymous with quality. As healthcare is very important to consumers, they typically do not price sensitive and want the best quality care available at a reasonable price.

3. Competitors who are growing lack the breadth and depth of our product offering allows consumers to choose us over them.

4. Competitors lack the brand awareness, distinction, and comfort that our company offers consumers.

5. We will have extensive partnerships with other healthcare providers and telemedicine providers.

1.5 Summary of forecasted operational and financial results

A forecast of the operational and financial results was done using the current market share and the competitor analysis. A conclusion was reached that the operation is most likely to be a success. The hospital already has a well-established and loyal customer base. As a result, there would not be many struggles with the marketing plan to capture a customer base to consume our telemedicine products. This will translate into higher profit margins. Also, a competitor analysis was done to evaluate how much competition the hospital would face in this new venture. A strategy to beat competition was therefore developed. First, the hospital will use the pricing strategy to capture more customers by operating at lower costs at the initial stages of the implementation, raising the cost later, having established a larger consumer base. Another strategy that will be used to beat the competition is based on the fact that the hospital will offer both in-patient visits and the online component. This will give the hospital a competitive advantage over other organizations in the same venture. The seamless transition between online and offline services will give us a competitive advantage.

On the financial aspect, the pricing strategy is also meant to lead to higher profit margins eventually. The initial strategy will revolve around a low monthly base fee and the consultation fees based on the product demanded by the consumer. The low pricing strategy will attract more customers. Although we might be stretched financially at the initial stages because of this pricing model, the pricing is bound to change with time once the product has established a bigger and loyal consumer base.

2.0 Description of the project

This proposed project aims to develop and implement telemedicine and its related infrastructure throughout the organization. The project shall be used to improve efficiencies in the organization while enhancing the overall quality of care. This is meant to help improve operations, reduce cancellations of appointments, and increase revenue while minimizing healthcare costs simultaneously. Healthcare is currently undergoing fundamental change. First, baby boomers continue to utilize services at an alarming rate. The overall population is aging, and as such, the healthcare infrastructure will need to change to accommodate changing dynamics within the industry. An older baby boomer generation is living much longer and utilizing more services than expected. Currently, 18% of the United States Gross Domestic Product is consumer by healthcare expenditures. This means that 1 of every 5 dollars used in the United States is spent on healthcare, and baby boomers are a large reason for it. In addition to these changes, COVID-19 has exposed many of the inequities in the system related to treatment and quality of care. A large-scale pandemic essentially overwhelmed the healthcare system causing unnecessary death and maltreatment. This has created the need for unprecedented stimulus on many developed nations related to health care treatment (Baron, Hirani & Newman, 2017).

Consequently, changes will need to be made in the future related to healthcare delivery and quality of service. For one, infrastructure must be in place to help take on excess patient capacity when a pandemic occurs. Second, healthcare institutions need to be ready to mobilize and to expedite vaccines and other approval methods needed to mitigate the impacts of future health care problems and pandemics. In addition, the quality of care must aim for preventative measures to keep the overall public abreast of underlying circumstances related to pandemics. It is important to focus on health, obesity, and other individual concerns to mitigate disease impacts on society overall (Browning, 2015).

This project is necessary because telemedicine will provide strong economic benefits for the organization while enhancing service provision to the consumer. COVID-19 pandemic has been an eye-opener, helping us identify the large structural weaknesses within the healthcare system. The hospitals were overwhelmed by consumers, limiting the overall capacity and the hospitals’ ability to take care of patients. The organization can use electronic communications and software to offer clinical services to patients without personal visits through telemedicine. For instance, this could have been used during the COVID-19 pandemic to help stop the virus from spreading to other patients and health care workers. To avoid a similar occurrence such as another pandemic, it is important to institute changes to counteract the next occurrence.

The telemedicine service will enable healthcare providers to offer services to patients electronically. Personal visits are not always necessary in healthcare provision. Services like follow-up medical visits, management of medication, and certain consultations can be delivered through electronic means. Therefore, telemedicine will provide these services in the same manner as in-person visits using video conferencing to administer the services. Evidence suggests the necessity of this as pandemics and other health emergencies will occur in the future. By leveraging telemedicine now, services can be offered to consumers continuously with little to no disruption.

Moreover, healthcare expenditures continue rising. Currently, 18% of Gross Domestic Product (GDP) is related to healthcare expenditures (American Health Care: Spending and the Federal Budget, 2018). With telemedicine, costs can be reduced significantly since hospitals no longer need the related overhead administrative costs necessary for in-person visits. Through electronic innovations, costs can be reduced, with cost-saving is directly transferred to the consumer.

The global telemedicine market is estimated to be roughly 56 billion dollars in 2021. The annual growth rate of the telemedicine market is anticipated to be about 22 percent between 2021 and 2028. This rise is attributed to increased consumer demand and telemedicine adoption rates (Telemedicine Market Size Analysis Report, 2021).

The key personnel needed will be related to technology. The organization will need a chief technology officer who can leverage their expertise to deliver technology and adoption solutions. Moreover, the company will need to hire a legal team to evaluate the implications of the implemented telemedicine and what products and services can be provided. Furthermore, a small marketing team will also be needed to promote the value of the service, oversee designing information packets, social media campaigns, and other channels.

3.0 Situation and industry analysis

From an economic viewpoint, the admission process and transfer regulation are vital since an organization continuously looks for ways to increase revenues and grow the volume in every service line. I work in the healthcare industry and witness inefficiencies that occur daily. The inefficiency not only sacrifices the quality of healthcare but also reduces the profitability of the enterprise. Lower profitability has implications for the stakeholders involved. This includes reduced ability to attract and retain high-quality employees. Also, it lowers the ability of the enterprise to invest in new innovative technologies that can further increase healthcare quality or accelerate treatment procedures. The current admission processes and transfers in the organization that I currently work for are fragmented. The West and Eastside locations follow different algorithms. Currently, the organization cannot track patients accurately moving to other facilities within and outside organizations. To develop the correct service lines and increase our volumes, it is essential to have consistent, defined transfer and admission processes.

To accomplish the above tasks, the organization will need to innovate in a much more effective manner. This will require the corporate to leverage technologies that increase efficiencies while also minimizing costs. Telemedicine and its ability to restructure the admission process are methods (Adams, 2019).

3.1 Market segmentation

COVID-19 pandemic has exposed infrastructure gaps in the health care system in the United States. The provision of relevant health care services affordable and convenient is critical to individuals and national security interests. Although pandemics are rare, they can have an incapacitating effect on society. As we have seen throughout history, pandemics cripple operations, cause high death levels, and lead to business operations closure. All these have an overall impact on the nation as a whole. Since the onset of the current pandemic, nearly 540,000 people died, while millions have lost their income sources and livelihood resulting from the inadequacy of the health care infrastructure.

Moreover, health care expenditure trends that occurred before the pandemic have indicated no signs of lessening. Currently, healthcare expenditure accounts for roughly 18% of the US GDP or $3.6 Trillion in monetary value. On a per-capita basis, these expenditures have proved to be the highest in the world at roughly $11,000per person. By 2028, the projections on health care expenditure are roughly $68,000 as per the census bureau. The result is that the cost of health care accounts for approximately 16 percent of the total household income. This trajectory is unsustainable as health care trends do not seem to be reducing. The following chart represents the rise in the cost of health care since 1961.

Chart 1

These trends in healthcare do not seem to be reducing. This is primarily because of the demographics in the current market. For instance, the population is becoming much older and living longer. As a result, the demand for additional healthcare services increases over a longer period. Baby boomers have been a critical element to the profitability of the overall healthcare industry. They have large amounts of discretionary income, live longer, and therefore demand healthcare services. Since they have a shorter life span, they are less price-sensitive and are willing to pay premium prices for health care services. Such trends create significant gusts of the industry as it has a large, wealthy captive audience.

In 2020, the telemedicine market grew by 23.5% to reach $186 billion (Telemarket market size analysis report, 2021). Much of this is attributed to the COVID-19 pandemic, which illuminated many of the weaknesses in the United States’ healthcare system and telemedicine services. For one, the United States health care system is ill-equipped to handle a large-scale health concern or a pandemic. During the COVID-19 pandemic, many hospitals were forced to operate significantly beyond their capacity. The country lacked enough resources like masks and other protective equipment for health care workers in their strife to mitigate the spread of the virus. In terms of health care equipment, the country lacked enough ventilators to see the needs of patients who needed physical accommodation. As a result, some serious ailments could not be properly treated because hospitals were overwhelmed. Provision of health care diminished due to inadequate availability of personnel and the overall cost of health care increased.

As a result, telemedicine has risen in popularity to solve many of such trends presented above. It helps to provide a lower-cost solution that automatically lowers the cost of healthcare treatment. Additionally, telemedicine can be delivered during a pandemic, making it useful during immense economic and social unrest periods. The quality of service delivered through telemedicine is equal to, if not better than any regular in-patient visits or procedures. This saves time for every stakeholder involved. Also key to note is that telemedicine helps reduce absenteeism that results from cancellations of appointments since individuals can utilize services from the comfort of their homes (Greiwe, 2019).

The global lockdown forced people to stay within their homes, which caused individuals to be apprehensive about their visit plans to the hospital. Also, the pandemic threat caused increased use of telemedicine since consumers fear that they may have acquired the virus. Home-based or remote working also increased telemedicine since consumers were more familiar and comfortable using online channels and mediums of exchange. Resulting from this was a large increase in adoption rates and proficiency within the market across the industry. Chart 2 below shows the overall growth rates within the industry.

Chart 2

3.2 Analysis of the competitive situation

As it’s related to AZ general hospital specifically, telemedicine can diversify its products and income stream. The offering of these products can eventually help the hospital harness a larger share of the wallet with consumers while reducing the overall expenses associated with in-patient cancellations. Telemedicine will allow the company to have higher profit margins in the long run while improving customer service at the same time. Previously, profit margins would be extremely low because the company would need to place a heavy investment in the telemedicine infrastructure. Such infrastructure includes additional servers for data storage, increased security measures to protect customers’ personal information, software that schedule appointment, and other hard costs. Soft costs include deciding the services to be provided by the system, training personal to know how to use the system properly, and limitations associated with the product offering. Therefore, many of these elements take time, financial capital, and human capital for effective deployment. Another extra requirement for the company has an available staff to help alleviate any technical issues that might occur. Once the product offering is established and becomes operational, profit margins are expected to increase due to economies of scale and low variable costs. Since variable costs are low, every time the company generates revenues from the service offered, profit margins increase in direct proportion (Wang et al., 2019).

As stated earlier, telemedicine offers the organization a diversified stream of income that gives optionality to both the organization and its customers. As the pandemic has demonstrated, optionality is of great benefit for companies that want to take a larger market share. The ability to offer a strong product online and physically will further help the company establish itself even deeper in customers’ lives while improving services. Consumers get to choose what they want. Hence, they are willing to pay premium prices for the options available (Adams, 2019).

Just like in any industry, competition does exist and is fierce in this industry. One reason for this is the increasingly low barriers to entry into this market. Therefore, any hospital with human and financial resources can opt to establish a telemedicine product. Also, companies dealing with pure telemedicine have been created. These do not require any physical presence but only offer online consultations. For instance, the Doctor on Demand, created by Dr. Phil and his son Jay McGraw, provides seamless online consultations. It allows consumers to see a doctor through video conferences, and a diagnosis is given. This venture recently closed a $21 Million series, a lead by Venrock. In this example, the competitor has a well-established brand and is widely recognized, has a strong business plan, and is backed by an established financier.

Additionally, competitors are using telemedicine to establish their networks and bring their programs to the market. American Well seeks to provide its consumers with convenient access to medical care and services extending beyond urgent care. This is to include chronic care management and post-surgical follow-ups. Considering all these facts, many competitors have several business models that customers find compelling ad appealing. The exponential growth of the industry comes with new entries into the market continuously (Cogan & Vogel, 2017).

AZ general hospital has a unique competitive advantage over its competitors since it will have the optionality of in-person visits and the online component. Some consumers may still opt for an entirely in-person experience, a service many of the competitors cannot provide. They will, therefore, lose this market to competitors like AZ general hospital that can. Moreover, AZ General Hospital has a range of services that can only be offered in person. Competitors who exclusively online have limited services they can provide. With AZ General Hospital, we can be a better service provider and offer a broader range of services while still providing telemedicine to those who opt for it. Combining these capabilities will allow the organization to succeed even as the industry takes course into the telemedicine product offering.

3.3 SWOT analysis

STRENGTHS

1. Telemedicine provides a lower cost solution than traditional services provided in the physical location.

2. AZ General Hospital has a combination of physical and online presence that provides a distinct competitive advantage.

3. AZ General Hospital already has a strong customer base that allows the telemedicine product to pick up quickly.

4. The telemedicine market is fast-growing and highly profitable and does not require competition based solely on price.

5. Telemedicine requires a large initial investment that limits smaller healthcare facilities’ ability to establish the product offering, thus reducing competition.

WEAKNESSES

1. Telemedicine in its current form is limited in the amount and kinds of services it can provide solely online.

2. Telemedicine does require a large commitment in terms of costs to purchase necessary hardware and software.

OPPORTUNITIES

1. Continuous innovation within the telemedicine sector

2. Acquisition of competitors with a superior product offering

3. Potential supplementary services that could increase the hospital profit stream

4. The ability to expand into other markets with services without having a physical presence

THREATS

1. Strong competitors backed with well-established financiers.

2. Competitors with strong brand names and recognition

3. Larger, more established hospitals

3.4 Industry forecasts and future outlook and trend analyses

As mentioned earlier, telemedicine is undergoing exponential growth. Since April 2020, telemedicine has improved from less than 1% to 44% today. Hence, the industry forecast is that telemedicine will become a standard health care service offered across all care health care systems. According to research conducted by Forrester, a global research firm, the United States’ virtual health care visits should rise to about half a billion in the next ten years. As such, patients will choose health care providers depending on their ability to provide strong telemedicine product offerings. According to CDC, chronic diseases that can be avoided through preventive health care services account for about 75% of the nation’s health care expenditure. With health care expenditure currently at $4 Billion, preventive care services are accountable for about $3 billion yearly. Therefore, by providing more convenient access to follow-up care, telemedicine treatment, and specialists for faster diagnosis, hospitals will have fewer readmissions, in-patient stays, and complications, and reduced cost of treatment and services (Atkinson & Ezell, 2019).

4.0 Marketing plan

The pricing model for telemedicine is yet to be standardized because the industry is just beginning. Hence, many competitors use different pricing models based on their business models. Many are willing to charge lower profits to generate loyal customers with large amounts of capital and financial backing, for starters. Many technology-based companies like Microsoft and amazon followed this strategy during their startups. For instance, Amazon recorded substantial losses for most of its existence as it sought to generate a bigger customer following while building its product offering. Microsoft used a similar strategy to become the dominant processing it is today. Once it dominated, it was able to charge higher prices and add additional services. Pricing for startup telemedicine organizations seeks to be employing the same tactic. However, this can be very disruptive as these software providers are purposing to take financial losses and operating on a thin margin to take market share from competitors. Those competitors who do not have the financial backing, capital, or investor base to sustain the losses will eventually lose market share and ultimately profitability. We are currently witnessing this within the retail sector since many stores like Sears, Neiman Marcus, and JC Penny have filed for bankruptcy. This resulted from their inability to compete with online retailers who used extremely aggressive pricing strategies. On the other end are more established telemedicine providers who are not “pure-play” telemedicine providers (Adams, 2019). They combine a combination of services, each with varying profit characteristics. The result is that these businesses do not rely solely on revenue from the telemedicine operation. These operations have much more flexible pricing related to their telemedicine product offering relative to their competitors. Going back to the retail example earlier, Costco has thrived in the current environment, and their core retail operations have performed very well due to their cost focus strategy. Even with Amazon operating at a loss and undercutting its prices, Costco still offers such a compelling value proposition that consumers still used their services. Therefore, they have slowly rolled out their online service offering to compete with Amazon better.

In this instance, AZ Hospital will adopt a similar approach to its pricing tactic relative to competitors. The hospital benefits from other “core” services that allow it to be flexible related to its telemedicine product offering. As a result, the company should not feel pressured to operate at losses to roll out its product properly. Instead, the company can be patient and deliver a compelling experience, leveraging its healthcare expertise and potentially charging premium prices (Visitiu, 2018).

4.1 Pricing plan with sourcing and analysis

The current pricing strategy will revolve around a low monthly base fee and the consultation fees based on the product being demanded by the consumer. This pricing strategy will first be very transparent to the consumer before engaging with the company. To start, the monthly base fee will start at $20 per month. The other fees will be based partially on competitive pricing and partially on internal profit margin projections. As stated earlier, the company will not engage in price wars with vendors and providers seeking to market share. Instead, the company will similarly leverage its value proposition to Costco in the retail industry.

This pricing model is justified because AZ Hospital has a physical and online presence that is difficult for other competitors in the market to imitate. Consumers have more flexibility and options to choose how they would like to engage with our services and product offering. In addition, due to our physical presence, our facility can provide services that many telemedicine providers cannot imitate. This smooth transition between online and offline services gives our firm a sustainable competitive advantage over our peers. In some cases, it will allow us to form partnerships with certain telemedicine providers who are unwilling and unable to provide the services we offer. For instance, it is difficult for a competitor like Doctor on Demand to provide an X-Ray over the internet. As such, they must often contract this work out to other health care providers. Our pricing model accounts for the costs needed to maintain the physical presence in the market, the depth of product offerings, the flexibility of product offerings, and the quality in which these offerings are administered. As a result, we don’t intend to lower our prices as our competitors do not have these offerings and their associated costs. Chart 3 below shows total telemedicine costs for different treatments. Take note of how the range varies for basic and often routine treatments. As noted earlier, this is primarily due to the industry’s infancy and the various pricing structures used by our competitors (Browning, 2015).

Chart 3- cost disparity for telemedicine treatment

Chart 4 below provides the same example as chart one. Here the chart takes one treatment, “Birth Control,” and shows the split between the visit cost and the prescription drug cost. The disparities are wide and mostly depend on the provider, the quality of service provided, and the overall product offering from the chart. Some of our telemedicine competitors, such as Hux, do not charge anything for their visit, with their revenue being incurred solely from the sale of prescription drugs. Likewise, competitors such as Doctor on Demand charges a large consultation fee upfront, with very low prescription drug cost on the back end. However, most competitors use a combination of both items as it relates to their pricing strategy.

Chart 4- cost disparity for birth control

Our pricing strategy will be a monthly fee for the service, together with a combination of prescription drug price fee and a competitive consultation fee.

4.2 Distribution channels and practices

As noted earlier, distribution channels will come from a variety of sources. The most significant and reliable source will be our customer base. AZ Hospital is unique because we already have a well-established, well-documented, and loyal customer base. Therefore, the organization does not necessarily have to spend significant amounts on marketing, advertising, and public relations as many of our competitors. These savings can lower monthly fees or consultation fees for customers to make the pricing even more competitive. Therefore, our customer base will be our primary distribution channel during the initial stages. Once fully utilized, the company will then shift to other telemedicine providers who do not have a physical presence within the market. Here, we can integrate our unparalleled product depth and quality with competitor’s ability to generate leads through the telemedicine product offering. This could improve our brand recognition and awareness while also providing telemedicine another income stream. Finally, our third distribution channel will be via other health care providers and major companies. Here, we will seek to establish partnerships with other healthcare partners who may not have a strong offering or unwilling to cater to the cost of creating and maintaining the offering (Browning, 2015).

4.3 Promotion plan

The promotion aspect will be primarily internal at first, as we will leverage our customer base to generate a consumer base. Afterward, the firm will engage in limited advertising and promotion on social media, YouTube, Google, and other social media platforms. The initial promotion will be modest to gauge the overall customer generation and ROI. Since the industry is relatively new, nearly all market participants are not entirely sure which promotional tactics would generate the highest customer traffic and ROI. Moreover, promotion through our primary distribution channels with telemedicine and other healthcare providers will help establish the brand.

4.4 Product/ service forecasts

As it’s related to the product and services forecast, we expect that our product offering will grow in line with the overall industry. As of 2021, the industry is growing at about 20% per year. As a result, we believe we should be able to grow steadily at this rate for the following reasons:

1. We have a strong and well-established brand that is synonymous with quality. As healthcare is very important to consumers, they typically do not price sensitive and want the best quality care available at a reasonable price.

2. We have a sustainable competitive advantage by offering both physical healthcare services and online healthcare services. This will provide us with a strong customer base to leverage high telemedicine adoption rates.

3. Competitors lack the brand awareness, distinction, and comfort that our company offers consumers.

4. Competitors who are growing do not have the breadth and depth of our product offering, allowing our consumers to choose us over them.

5. We will have extensive partnerships with other healthcare providers and telemedicine providers, especially those who are unable and unwilling to offer in-patient services.

5.0 Operating/production plan

The organization will have to establish a committee that will decide on visits and appointments appropriate for the hospital. Additionally, the committee will set up guidelines that will include the clinical protocols and operational workflows for every physician, staff, and all specialists while considering the role of advanced practice providers (APPs). This will help ensure the consistency of messaging and allow for efficiency in triaging patients’ concerns and their medical conditions. This will further help determine appropriate services and care to set, appointment type when the patient is tended and by whom, and the provider specialty. Triaging is important since it will help improve patient management and the management of hospital resources. This will ultimately allow for better care delivery at the right place, setting, and time. It will also help the healthcare providers provide clear instructions during this when we must all abide by the regulations set up to reduce the spread of the COVID-19 virus, including social distancing. Moreover, the hospital will have to set standards with comprehensive and clear documentation (Visistiu, 2018).

Furthermore, patients will expect a confidential, professional environment whether they come for the in-person visits or receive the healthcare service from the comfort of their homes. For this reason, the hospital and the healthcare providers will have to ensure that their workspace background is appropriate. This means no interruptions from pets, family members, and colleagues, and no distractions as well. For the telemedicine service, providers must keep in mind that they are on camera. Another essential element to the efficiency of the services and products provided by the hospital is setting up the workspace to enable the healthcare provider to see the patient and easily access the electronic health records, messages, and any other relevant resource information. The technology will also be set up to help prevent frustration both for the healthcare providers and the patients and to prevent miscommunication. This will ensure that the hospital has seamless operations throughout. Therefore, essentials to ensure this include broad connection and good sound and strong and consistent Wi-Fi. For audibility and good sound quality, the hospital will need good headsets and microphones for the users. A strong technological team will help to bring this into reality.

The hospital will also have to establish practice management systems (PMSs) and electronic health records (EHRs) for the healthcare providers and other virtual communication options. There will also be the need to establish time slot templates and the types of appointments, and the length of each type.

To optimize scheduling, the committee established by the hospital will have to walk through the entire telemedicine call process from the beginning to the end. Additional buffer time between visits will also be required, especially at the initial stages of the implementation process. The hospital’s technology team of experts will also ensure that the technology used by patients for scheduling appointments is reliable and user-friendly (Visistiu, 2018). The hospital will also develop clear instructions for patients to follow regarding the technology since many will not be too familiar with how the technology works. The staff will also be given adequate training to ensure they navigate the technology with ease and master the processes. All these activities are aimed at ensuring efficient and seamless operation.

5.1 Capacity

The hospital will have to develop building capacity among the hospital’s health care providers and staff. This is likely to have a significant impact on their preparedness and comfort. This will address issues in history, skills, communication, and technical proficiency. Also, the number of patients attended daily is likely to increase, translating into increased profit margins.

5.2 Equipment

Telemedicine requires a lot of specialized equipment for the venture to be seamless and successful. However, for almost every tool used for in-person visits, the hospital can purchase a typical electronic version. The following is a list of the tools and equipment necessary for the implementation of the service.

A remote vital monitoring device takes the patient’s vitals and sends the results straight to the specialist’s device. With this device, a patient who is at risk of developing a serious condition or problem can put it on continuously to allow for constant monitoring.

Wireless scales ensure that the patient’s accurate weight is measured and transmitted to the hospital’s system and the healthcare provider’s device. Having a record of the correct patient weight will help the practitioners prescribe medication and treatment correctly despite not physically seeing the patient.

Virtual stethoscopes – this records audio from the patient’s side and then transmits it to the device of the specialist. With this device, a patient will record audio from the area the physician would like to examine, including the lungs, the digestive system, or the heart. The recorded audio is then sent wirelessly to the hospital system, where the physician can access it.

The patients will use thermometers to record their temperature, which will then be displayed on the physician’s screen. This can be done numerous times to enable the physician to track any changes in the patient’s condition.

Pulse oximeters – to measure the oxygen level, especially in serious cases such as COVID-19 infections. Patients can have low oxygen levels without knowing about it, and this can be very risky.

Digital otoscopes – these devices live stream video and images to the physicians and record images that can be used for reference in the future. Such a device will allow patients to record organs like their ears at any time and send the images to the physicians for viewing and diagnosis. Another advantage with these devices is that the physician can look at the images whenever it is convenient.

High-quality cameras - this will be necessary for specialty practices since some particular specialties require better quality images. For instance, specialists like radiologists and dermatologists require higher-resolution videos and images for accurate diagnosis.

Hardware and software tools - for a smooth collection of sensitive health information wirelessly, the hospital will have to hire a team of technology expert as part of the human resource to develop a secure software tool that will allow patients to upload videos, images, and files while being assured complete confidentiality.

Getting the necessary equipment for telemedicine service provision is important. With the acquisition of such tools, the hospital’s operations will be efficient and convenient so that more customers will be attracted. The equipment mentioned above is easily available in the market. Also, several infrastructures will be required to implement the service, including a platform for video interface. This will be a critical piece of telemedicine infrastructure. A variety of video systems are easily available in the market.

5.3 Processes unique to the project

AZ Hospital is unique because it already has a well-established, loyal, and well-documented customer base. As a result, the organization will not have to spend substantial amounts of money on marketing, public relations, and advertising as many of our competitors do. These savings can then be channeled to other operations, lower consultation fees, and customers’ monthly fees. This approach makes the hospital unique, more appealing to consumers, and gives the hospital a competitive advantage. Consumers are always attracted to quality services at affordable prices. Our strategy of competitive pricing is, therefore, anticipated to attract an even larger consumer base.

Another unique process will be channeling our distribution through major companies and other healthcare providers. With this strategy, we can establish partnerships between our product offering and other healthcare providers who may not have a strong offering or unwilling to take on the costs to create and maintain the product offering. This will be made possible by our physical presence since we will offer both in-patient health care service and online telemedicine product offering coupled with our pricing strategy. As a result, we will not need to lower our prices like our competitors. Our faculty can offer services that many telemedicine providers cannot imitate. For instance, it will be difficult for some healthcare providers to provide x-rays over the internet. As a result, such providers will seek partnerships with other providers that can physically provide such services. AZ hospital will, therefore, maximize such opportunities. This will also help increase our popularity in the market, hence building a stronger brand name that will stay operational with higher profit margins even in years to come.

5.4 Competitive advantage

With AZ hospital, the combination of physical presence and online product offering provides a distinctive competitive advantage against other telemedicine service providers. For one, the hospital already has a built-in customer base in which the telemedicine product offering can leverage immediately. This allows AZ hospital to quickly put up operations without spending time hunting or recruiting potential hospital partners or consumers. Likewise, the physical presence of the hospital provides customers with the optionality that other pure telemedicine competitors cannot match. Allowing consumers to have the option to use either offering or a combination of the two will also help to increase adoption and usage rates (Wang et al., 2019). Consumers will have the flexibility to choose how they would like to engage with the hospital. The flexibility of our product offerings, the depth of product offerings, and the quality of service administration are considered an added advantage. This will offer us a competitive advantage by attracting an even bigger consumer base because of the flexibility. This seamless integration of offline and online services will give us a sustainable competitive advantage over other telemedicine service providers. Another competitive advantage will come from our pricing strategy. This will revolve around a low monthly base fee and a combination of consultation fees based on the product in demand by the consumers.

6.0 Organizational plan

6.1 Venture ownership and form of ownership

The venture into telemedicine will be a sole proprietorship since the venture will be fully owned and funded by the hospital. The hospital can also seek additional funding from some relevant bodies to help with the initial stages of setting up the telemedicine product offering. This means that the hospital will be responsible for any profits or losses incurred in operations and liable to the same. The form of ownership will also be sole proprietorship as the venture will be solely owned by AZ hospital. Even though the hospital will establish partnerships concerning providing in-patient services to other healthcare providers who solely provide telemedicine services, the hospital will still have sole ownership.

6.2 Authority of respective principals

The governance capability will provide the organization with thorough, timely, and accurate information about the telemedicine product offering. The hospital will have to select a telemedicine executive champion and a telemedicine leader who will play key roles in the implementation process. These positions are critical in giving out directives once the opportunities and risks have been calculated. The telemedicine executive champion can be selected from various officers like the chief technology officer, chief operating, chief medical information, chief medical, chief executive, or chief information officers. This person’s role will be to ensure proper evaluation of telemedicine options and ensure appropriate allocation of resources within the organization. The telemedicine leader’s role will be to support the executive champion.

6.3 Management team background

As it relates to the role of leaders on this project, every leader will have a much-diversified role. The leader must first be a project manager as many different and diverse tasks are required to succeed. These tasks include collaboration with teams like IT, Finance, Marketing, Law, and Human Resource. Each leader must also be able to delegate tasks to allow them to process responsibilities realistically. In addition, each leader must be a strong communicator. He or she must develop a fascinating and interesting value proposition for the whole team to implement. Through the vision, the leader, the rest of the team can better incentivize activities related to the overall vision of the hospital. For instance, these incentives could be increased pay for making predetermined signs. In each case, the leader must help deliver the telemedicine project on time and within the budget. This can be very complicated, considering the many variables involved in the process. As a result, each leader must be multidimensional and multitask under different business and economic conditions. Each leader must have experience dealing with very stressful and contentious jobs with a large amount of uncertainty. In addition, they must rely on experts who are often wiser and more knowledgeable than they are as it relates to telemedicine.

6.4 Roles and responsibilities of team members

Telemedicine is an innovation based on technology. As such, the hospital will need coders who are uniquely focused and technology-skilled to implement the program. The coders will also have to be skilled in coding using various languages, have strong communication skills, and be flexible to change. The team members must also show strong track records of beating deadlines and have strong collaboration skills. Their roles and responsibilities will generally revolve around administering quality product offerings while abiding by the ethical code of the hospital. Every team member will be expected to maintain a high level of the team playing to ensure that the hospital’s goals are attained.

6.5 Table of organization

VP Operations

In-Patient medical director Director Out-patient medical director

Manager

Coordinator

Team members and other staff

7.0 Human resources plan

Human resource is a crucial element to any business venture. Human resources have become even more critical due to globalization and industry transition into a much more service-oriented model. As a result, for AZ hospital to transition into telemedicine, the firm must hire the relevant and qualified personnel for the task. For one, technology innovations are difficult to implement and need skilled personnel and large investments in equipment. Delay or hiring the incorrect individuals can cause unwarranted disruptions to the overall implementation.

Similarly, when high turnover happens with a technology-based product, much of the product know-how leaves with the individual. As a result, any new hires will have to be accustomed to the work of the departing personnel and make appropriate changes as required. This could still cause further delays, which are also costly and detrimental to the overall project. Hence, attracting, hiring, and retaining skilled and competent personnel is a critical aspect of the project’s overall success (Atkinson & Ezell, 2019).

7.1 Employee strategic plan

Telemedicine is a technology-based innovation. As such, AZ hospital will need a unique and dedicated technology skill set to implement the project. Herein, the company will need employees who are skilled at coding in different languages, have strong communication skills, and track record of implementing tactical change within a traditional setting. The employees must also have a strong record of meeting deadlines and have strong collaboration skills. As AZ hospital is a traditional establishment focused on delivering healthcare services in a much more traditional setting, the current employee base is inadequately equipped with these skills. In many instances, the employee base has a traditional mindset and does not share the innovative vision required for the telemedicine project to be successful. As a result, the organization will need to seek external skills. As a result, an entirely new department will need to be created to help foster the innovative culture necessary to implement the telemedicine product offering. However, as it is related to leadership, a team leader from the hospital will be present on all team decisions on technology to ensure that the ethics and culture of the organization are maintained (Atkinson & Ezell, 2019).

7.2 Recruitment plan

Several essential infrastructure elements will be required for the implementation of the telemedicine product offering. First, the video connection and platform for a video interface are essential for a telemedicine infrastructure. Currently, there are various video systems available in the open market. The most basic system is directly related to the consumer system. The consumer will use a home computer or smartphone with the app to communicate directly with the physician. These systems are normally provided via a third-party retailer. However, in the case of AZ Hospital, this will be developed internally to ensure high-quality standards.

Additionally, the recruitment plan will need a competent technical team to support operations continuously (Cogan & Vogel, 2017). Herein, the staff will help with technical or hardware issues that occur occasionally. The recruitment plan will initially be conservative with recruitment efforts and will therefore only hire a small team. Once budgetary concerns and staffing needs are addressed, the company will hire additional team members to join the technology department. Below is a summary of the number of employees needed and the skill sets required (Greiwe, 2019)

Employee Type

Number of Employees

Skill Set

Technical Support

2

1. Strong communication skills

2. Strong problem-solving skills

3. Prior customer service experience

4. Technology-focused background

Technology Department Leader

1

1. Strong Leadership Skills.

2. Prior experience leading a team.

3. Strong technology background and computer coding skills.

4. Strong communication skills

5. Problem-solving and ability to multitask.

6. Ability to meet and exceed deadlines

Coders

2

1. Coding Skills in a variety of languages

2. Prior history of performing coding at a high level

3. Strong communication, multitasking, and problem-solving skills

7.3 Retention plan

Employee evaluations occur every six months, once at the beginning of the year and the end of the year. Evaluations will be based on key corporate objectives such as project completion, teamwork, and overall departmental success. Recognition will be given in the form of annual bonuses given at the beginning of the year based on individual and team performance (Cogan & Vogel, 2017).

As it relates to retention, AZ hospital will be at or above market rates for talented and skilled coders. As a hospital, the company can offer a very captivating benefits package, particularly for healthcare-related benefits. This will give AZ hospital a retention advantage as other industry competitors will be less likely to match the company’s health benefits. This benefit will be even more attractive to the utopian who are entering the stage of their lives where they have children. As such, the healthcare benefits become much more advantageous to them.