Healthcare strategic management principles and practice

Strategic Healthcare Management

How is the strategic planning process for a healthcare organization different from that of other service industries?

It is often said that there is no good time to become ill -- however, from the health care provider's point-of-view, an unplanned rise in community ailments is an unfortunate unplanned excess cost to the organization as well as an unfortunate blow to a number of individual's states of health. This is why strategic planning of health care costs for organizations must evaluate the appropriateness, necessity, and quality of the prescribed services on a retrospective basis, as well as on a prospective or concurrent basis. ((ProPAC, 1996)

In contrast to other service industries, it can be more difficult for healthcare organizations to plan for seasonal rises and lows in demands placed upon the institutions and its works. True, flu and allergy season brings certain predictable demands for flu shots and to allergists for medication. Also, a Case Mix Index or CMI can be used to measure of the prospective relative costliness of the patients treated in each hospital or group of hospitals, given area demographics and past rises and fluxes in illness and birthrates. (MedPAC, 1998)

But no health care organization can completely and strategically pre-plan for community disasters, such as the attack upon the Twin Towers in New York City, a fire, or an earthquake. Epidemics can also strike cities or regions quite suddenly. Unlike a service industry organization, like retail store that can predict a likely need for temporary workers around Christmas time, or a CPA's office that can predict an increase in hours around April 15th, followed by a relaxing decrease, people do not become sick, die, or give birth upon a calendar schedule. Thus, strategic healthcare management must allow for unexpected costs, such as hiring temporary workers as well as increases in needed supplies, and facilities costs for the added hours worked by current laborers.

Identify an environmental factor that would require immediate attention by a healthcare organization? How does this environmental factor affect this organization?

A recent environmental factor that could not be planned for, but required immediate attention was this winter's anticipated flu vaccine shortage. Healthcare organizations thus had to anticipate the need for rationing, once they heard of this unexpected and immediate downshift in likely vaccine supply. To addresses the problem, many organizations contacted government authorities to answer the question of who should have priority in getting flu shot, under the changed circumstances. As they could no longer give the shots on an as-request basis as before, changes in policy had to be made.