Strategic Management and Planning Strategic

Strategic Management and Planning

Strategic Plan Assessment for Rashid Hospital

The intent of this analysis is to provide an environmental and competitive assessment of Rashid Hospital, one of the three hospitals included in the Department of Health and Medical Services Department of the Emirate of Dubai. Included in this analysis are the following: an assessment of the external environment of Rashid Hospital including an analysis of the payers for care, population served, and competitors; an analysis of the internal environment of the organization; an assessment of Rashid Hospital using Porter's Five Forces Model; a checklist for linking strategic alternatives to situational analysis; and finally a discussion of specific methods Rashid Hospital can use in evaluating alternative technologies. Taken together these five specific assessments will serve to accurately and completely define the competitive position today and potential strategies in the future for Rashid Hospital to take in the future.

External Environment Assessment

Rashid Hospital is the premier medical facility for treating emergency, trauma, critical care and ambulatory needs of residents and non-residents of the Emirates of Dubai (UAE). The hospital has created a series of additional practices, all aimed at delivering greater service and value to the surrounding community. One of the greatest potentials for growth for Rashid Hospital is in creating programs that address the healthcare needs of international visitors. The breadth of service offerings from Rashid Hospital is a competitive strength and also an unrealized profit center in the context of serving the needs of tourists and expatriates visiting or living in the Emirate. Table 1, Overseas Treatment Expenditures by Countries and Type of Expense, 2004-2005 for Rashid Hospital shows that while there were less total patients treated from overseas (808 patients for 2004 and 679 for 2005) the total expenses jumped from 119,943Dh in 2004 to 136,429Dh in 2005. This signals that tourists and expatriates are visiting Dubai for more complex surgeries than having them completed within the kingdom as opposed to paying higher prices for having them done in Germany, the U.K., or the U.S. Of these three nations, U.K.-based tourists and expatriates are by a large margin taking advantage of the higher levels of medical care at lower prices than their native country.

TABLE 1:

OVERSEAS TREATMENTS EXPENDITURES BY COUNTRIES & TYPE OF EXPENSE

2004-2005

Table 2: Overseas Treatments Expenditures by Countries and Type of Expense: 2005 shows how overseas visitors are paying for their visits. Notice the high level of payments again for the European countries of Germany and the U.K. with 50% of the total foreign patients being from Germany alone followed by 31.5% from the U.K. What is striking is high level of cash payments Germans make with regard to their treatments. At 19,953Dh this is the single largest payment my a few multiples over and above medical expense management, which is synonymous with medical insurance. Table 2 highlights the potential of creating more focused business development and marketing strategies to specifically align with the unmet needs of Germans looking for specialized treatments they would be willing to travel to Dubai to have completed, in addition to setting up comprehensive programs for healthcare coverage for Germans living and working in Dubai and throughout the kingdom.

TABLE 2:

OVERSEAS TREATMENTS EXPENDITURES BY COUNTRIES & TYPE OF EXPENSE: 2005

Table 3, Outpatients in Rashid Hospital by Sex and Service, 2004-2005 shows the distribution of patients by service delivered to them. This includes both local and foreign patients treated at Rashid Hospital. Local Specialist Clinics are the highest growth overall, and shows the greatest potential for growth in the context of both residents and non-resident patients. Attracting new customers to Rashid Hospital is going to be possible by stressing expertise in each of these local specialist clinics.

TABLE 3: OUT-PATIENTS IN RASHID HOSPITAL BY SEX & SERVICE

2004-2005

There are many other insights to be gained from reading the Department of Health and Medical Services (DOHMS) Statistical Report (2005) yet the key take-aways from looking at all available data shows that tailoring treatment strategies for those visitors and workers or expatriates from Germany and the U.K. have the greatest potential for growth.

Internal Environment

The internal environment is one that is marked with a strong ability to recruit doctors who are non-nationals to UAE. Of the total employees of 2,287 as of the last census in 2005, 220 doctors are non-national and 153 are nationals. What is very encouraging is that 87 of the doctors on staff are women nationals. Having this many women on staff gives Rashid Hospital a thought leadership advantage in terms of further recruiting throughout the world, and attracting top quality talent to staff the specialist clinics.

TABLE 4:

MANPOWER IN RASHID HOSPITAL BY CATEGORIES, NATIONALITY, SEX & AGE GROUPS: 2005

Table 5: Functioning beds in Rashid Hospital by Specialty: 2005 shows that the majority of the hospital is staffed with in-patient functioning bed, again supporting the specialty medical focus and the potential services strategy of serving both in-country and tourists, expatriates and foreign workers with highly specialized care. The distribution of beds by type shows support for this strategy. Further, the second largest amount of beds is in the surgical surgery area including vascular, plastic, and general surgery). This also is a significant strength for the hospital as it can potentially sell tourism packages for German and UK residents who want to get a vacation in to Dubai and also get plastic surgery at the same time. These types of tours, called cosmetic safaris, have become very popular in Africa for example.

TABLE 5:

FUNCTIONING BEDS IN RASHID HOSPITAL BY SPECIALITY: 2005

Department of Health and Medical Services (DOHMS) Statistical Report (2005) also includes many useful statistics on the internal environment and performance of the internal environment of both Rashid Hospital but the entire series of hospitals that comprise the DOHMS.

Porter's Five Forces Model Applied to Rashid Hospital

The five forces that comprise Dr. Porter's model are industry competitors, pressure for substitute products, bargaining power of suppliers, bargaining power of buyers, and the influence of potential entrants. Porter (et. al.) has extensively developed this concept in this many writings. Figure 1 shows the Porter Five Forces Model graphically. Each of these areas is now discussed in bullet form in the following series of sections.

Assessing Rashid Hospitals' Industry Competitors

There are ten other hospitals located through Dubai, each with a strong series of specialties covered, and a few including Gulf Plastic Surgery Hospital which has begun offering specialist-level services which combine tourism and plastic surgery, liposuction and other treatments.

Competition within the country intensifies based on private hospitals being able to recruit and retain higher quality levels of physicians and assistants.

German-based health services organizations including HMOs and PPOs start acquiring privately-held hospitals throughout Dubai and UAE.

Pressure from Substitute Products

Low pressure on substitute products as the DOHMS is state-funded and competes on services and responsiveness to patients and not on price. There is no pressure to compete on price today, which keeps DOHMS out of price-only positioning relative to other providers.

The pressure from specialty clinics is intensifying and for DOHMS to create greater differentiation they will need to concentrate on adding significant value to their offerings in this area - specifically looking at co-bundling treatments with travel programs for example.

Bargaining Power of Buyers

High levels of bargaining power from buyers as UAE has a comprehensive medical services program, which allows residents to focus on specialized care for their more urgent medical problems. From the statistics shown in the Department of Health and Medical Services (DOHMS) Statistical Report (2005) it's clear that buyers are being selective where and when they choose to seek out specialized care, especially for dental work.

Buyers from Germany and the UK are beginning to have significant leverage on services aimed at their specific needs. The bargaining power of tourists and expatriates is gaining and DOHMS overall with Rashid Hospital working specifically on this area warrant greater effort.

Bargaining Power of Suppliers

Highly competitive marketplace for medical products and vaccines, as the growth of medical facilities is making demand outstrip supply for specific products.

DOHMS' strategic plan calls for the development of a unified procurement strategy that can scale nationally for all hospital centers and negotiate for the best possible price. Friedman in his landmark book, The World Is Flat (2005) highlights the need for having a consolidated approach to streamlining procurement to attain the best possible efficiencies through better process re-engineering and pursuit of best practices, as the Rashid Hospital Strategic Plan defines.

Potential Entrants

Global healthcare providers from the U.S. And Europe including Blue Cross, Humana, and other larger, well-financed HMOs and PPOs.

Highly specialized clinics and programs will begin to create greater competition for specialized services that Germans and Britons are looking for.

Entrants from Indian healthcare providers is also a threat of new entrant as the statistics show that this nationality is one of the secondarily most treated in Rashid Hospital.

Linking strategic alternatives with the situational analysis