Strategic Plan of Hospital Corporation of America - Essay Example

? Strategic Plan Lecturer: Executive Summary This research project attempted to align the proposed strategic plan with the organization’s objectives, vision and mission, as well as, recommended best strategies for HCA with an aim of convincing investors that the organization is trustworthy and successful. The research approach ensured that Hospital Corporation of America vision, mission, and people strategies and values statements align with the proposed strategic plan. In the introduction part, the researcher argued that in the contemporary highly competitive business environment, budget planning techniques have become unsatisfactory for large organizations to survive; thus HCA must engage in effective strategic planning process in order to flourish. The background of the research attempted to reveal the way the researcher intends to ensure the organization's vision, mission, and people strategies and values statements align with the proposed strategic plan. A brief background of the company and objectives of the study were revealed, as well as, the mission, vision and core organizational values were presented. Additionally, the researcher carried out external and internal environmental scanning on the proposed strategic plan using relevant resources of analysis; the researcher assessed the external (threats and opportunities) and also the internal environmental analysis (strengths and weakness) of the company. Moreover, it was argued that given the information from the environmental scan, HCA should match its strengths to the opportunities, which it has identified, while at the same time addressing weakness and threats. With the controversies that have surrounded HCA, it was argued that the company needed to review its growth strategies to ensure it redeems its image and to put it in a constant path of growth. The strategic planning process focused on the significant of employing effective strategies that aligns with the external and internal environment. Varied recommendation for the best strategy were presented and one of them included planning about the growth strategies of the company and this is through focusing on meeting the demanding needs of customers and showing their corporation ability to them. Another recommendable growth strategy that HCA should put into consideration is mergers and joint ventures. It was also argued that HCA should incorporate telemedicine in their institutions because this would help them to accelerate its growth. Employing customer-focussed strategy that will ensure the corporation attracts new customers and retains the old ones was also seen as an effective strategy for enabling the company to accelerate its growth. The implementation plan focused on the way HCA can achieve its intended objectives by conducting an intensive environmental scan to ascertain the internal functioning of its institutions, evaluation of its position in relation to the industry’s tasks environment and evaluation of the external macro-environment factors. This was seen as vital; thus, the need to evaluate technological advancements in the field of nursing and medicine, and analysis of its preparedness to incorporate the competitive aspect of other stakeholders in the health sector. The research identified varied risks that are likely to occur in the organization and among the potential risks included the compliance to standards, fire outbreak risks, quality control risks, and changes in technology, as well as, hospital equipment failure, institutional restraints, and recruitment and retention staff issues among other risks. It was, therefore, argued that employing contingency plans is fundamental because this will enable the corporation to find efficient alternatives for managing risks in case the unplanned events occur. Strategic Plan Introduction In the contemporary highly competitive business environment, budget planning techniques have become unsatisfactory for large organizations to survive; thus HCA must engage in effective strategic planning process in order to prosper. The strategic plan should clearly define objectives, mission, or vision and scan the environment, as well as, formulate or implement strategy vital for making them stay competitive. Strategic planning involves strategy identification and effective decision making on resource allocation in order to enable an organization to pursue their strategy. The proposed strategic plan for Hospital Corporation of America needs to address cultural diversity, environmental sustainability, effective health care, and innovation across its 162 hospitals and 113 freestanding surgery centers. The strategic plan should align with the organization’s vision, mission, and people strategies and values statements. Indeed, where the organization operates in different states and cultures across the globe, it offers a wide range of health care services, and has large medical personnel; thus it requires an effective strategic plan. There is a need for the company to carry out an external and internal environmental analysis to evaluate the effectiveness of the proposed strategic plan. The research project seeks to align the proposed strategic plan with the organization’s objectives, vision and mission, as well as, recommend best strategies for HCA; thereby, convincing investors that the organization is trustworthy and successful. Background There is a proposed strategic plan for Hospital Corporation of America; thus the research seeks to show how I intend to ensure the organization's vision, mission, and people strategies and values statements align with the proposed strategic plan. It also seeks to highlight the sources I expect to use to perform an external and internal environmental analysis. Notably, there has been previous research on strategic plans and environmental analysis on organizations but there is need to for this research to evaluate strategies and recommend the best strategies for HCA since every organization is unique and the modern world presents new dynamics to organization operations. Company Background Hospital Corporation of America (HCA) was founded in 1960 to provide healthcare facilities in United States and United Kingdom. It operates in more than more than 162 hospitals and 113 freestanding surgery centers across the globe and can be considered as the largest corporation to manage health care facility around the world (BBC News, 2006). The company employs about 199,000 people and it offers a wide range of medical services, as well as, committed to a healthy work environment (Hospital Corporation of America, 2013). As such, it has a complex strategic plan that seeks to ensure the offering of efficient health care across various states. Indeed, Hospital Corporation of America commits itself to the care and improvement of human life and strives to deliver high quality, cost effective healthcare in the communities they serve. Moreover, the Objectives In a bid to improve its productivity in terms of service delivery and improve its competitive advantage in the health sector, HCA intends to improve its economies of scale in areas of management, purchases, production and marketing. It also intends to incorporate new growth and expansion strategies such as telemedicine, mergers and joint ventures and improve on employee satisfaction in a bid to restore clients’ confidence and enhance good governance/organization culture within its institutions. This will improve on resource allocation and enable the management in monitoring the progress of the institution in line with its core objectives of quality delivery of medical services, maintenance of its business position/market share, reputation and profit maximization. Organization Mission, Vision and Value Statements The mission of the company is dedicated to the care and improvement of human life; thus the company strives in order to deliver high quality and cost effective healthcare services to the communities they serve. The vision of the company is to offer culturally competent healthcare globally and also foster a culture of diversity, as well as, inclusion across all areas of organization. The core values include; Recognizing the unique and intrinsic worth of each individual, as well as, treating all those they serve with compassion. They organization acts with total openness, justice and integrity in the way they carry out their business. Employees have confidence towards their colleagues as valuable team members of their healthcare group and oath to treat one another with dignity, deference and loyalty. Environmental Scanning a) External Environmental Many organizations around the globe attempts to examine the threats and opportunities that they face , as well as, issues and trends that are likely to emerge in the near future through the process of strategic planning. Cohen, Kamieniecki and Cahn (2005) argue that analyzing threats and opportunities of the company can enable the firm to formulate effective strategies vital for enabling the firm to compete favorably; hence achieving successful business performance. For an organization to strive and develop, it is vital that the process of strategic planning is carried out on a regular basis and must not be treated as a onetime activity only. Analyzing external factors that affect the industry or a company are a part of the strategic planning process (Robinson, 2005). The first factor that is most likely to affect HCA is the economic conditions that are being faced by a nation or that is being faced by the entire world (Ferrell and Hartline, 2008). The prevailing economic conditions of a country directly influence the company; however, the company has no or little control over these conditions. Due to economic crises the mass population is unable to pay for health insurance which in turn affects the number of patients that HCA can admit and treat (Ferrell and Hartline, 2008). Changes in law pertaining to medical care can also have an impact on the company. Change in regulations usually has an effect on the manner business activities are conducted by the company. For example an increase in the taxes could have a significant impact on the rates that the company charges for its services. This in turn could affect the number of patients that admit themselves in the company owned health care facilities (Ferrell and Hartline, 2008). The third external factor is the technological advancements that are made within the medical field. New technologies that help diagnose or cure an ailment could contribute to an increase in the cost of operations at the company. New technological methods cannot be ignored by the company and must be implemented to ensure that the highest level of quality care is made available to the company’s patients (Ferrell and Hartline, 2008). b) Internal Factors Strengths: HCA is one of the leading health care providers in United States and United Kingdom. With 163 hospitals and 110 freestanding surgery centers the company is spread across 20 states within United States and also provides the same kind of health care facilities across the Atlantic Ocean in United Kingdom (Ferrell & Hartline, 2008). By having a large number of medical centers across the country the company ensures that it captures a large market share of patients that are available within the two countries. Moreover its diversified services within the health care industry allow the company to offer its resources and dedicate their personnel to a wide range of patients with varying ailments (Ferrell and Hartline, 2008). Weaknesses: The low usage of inpatient rooms adds to the cost of the company. The company has to spend a large amount of the sum on rooms that are rarely occupied by patients. The costs are usually associated with the maintenance of the rooms which includes cleaning, maintaining the electric power, water and other connections of the room. Cost analysis of such rooms show that it is infeasible to operate a large number of rooms that are rarely occupied by patients (Ferrell and Hartline, 2008). Another huge concern for the company is its soaring debt. There are great concerns about the debt situation of the company in the near future. As of 2012 the company has had an outstanding debt of more than $27 billion. The company has to address the issue with its short term liabilities in the near future. Moreover allowing the debt situation to go unnoticed might cause tremendous problems for the company in the coming years (Ferrell and Hartline, 2008). Strategy Formulation Given the information from the environmental scan, HCA should match its strengths to the opportunities, which it has identified, while at the same time addressing weakness and threats. In order to attain high profitability and improve organizational performance level, the corporation will develop an effective competitive advantage over its rivals. Employing Porter’s generic strategies for analyzing the competitive business environment is fundamental (Porter and Lee, 2013). Many companies start the business with an aim of expanding their operations to make as much profit as they can; the process of expansion is what can be termed as business growth (McDonald, Shalloo, Pierce and Horan, 2013). Business growth is motivated by effective strategy formulation in the internal and external environment. One of the effective strategy is direct competition from manufactures of a similar products and services inspires a company to look for ways to improve its market rankings by either bringing better products in the market or differentiating their products. Another strategy is the use of indirect competition from companies that produce cheaper substitutes also encourages the business to grow otherwise it will be pushed out of the market. The desire by organisations to enjoy economies of scale in terms of management, purchases, production, marketing among other forces them to expand which guarantees them saving due to bulk purchase of materials, spreading of overheads, higher bargaining power and expert management (Kazanjian and Drazin, 2009). HCA faces high competition from a number of health care companies; therefore, this competition slowly and steadily chips away the number of patients that the company could serve (Robinson, 2005). In order to attract more patients, the company has to either reduce its operating cost or provide additional incentives all of which contributes to the decrease in the profits of the company (Robinson, 2005). Amongst the company’s principal competitors are Health Management Associates, Life Point Hospitals, Tenet Healthcare Corporation and Vanguard Health Systems. These companies comprise of the top six for-profit health care operators within United States (Gamble, 2013). Each of these corporations has their own strength and is preferred by patients for some reason or the other. With the controversies that have surrounded Hospital Corporation of America (HCA), the company need to review its growth strategies to ensure it redeems its image and to put it in a constant path of growth. This is because an increase in demand for the products that a company manufactures also contributes to the motivation of a firm to grow in order to meet the growing demand for its products and services. Prestige and power that comes with managing big firms may also motivate the management to expand their organisations (Kumar, 2010). Moreover, government policy in some countries, especially the planned economies requires business to operate under certain rules and regulations. Businesses may grow in order for them to meet these regulations and enjoy the quotas, subsidies and incentives that the government gives to businesses. Recommendations for the Best Strategy for HCA One of the effective recommendations is planning about the growth strategies of the company and this is through focusing on meeting the demanding needs of customers and showing their corporation ability to them. HCA manages a number of hospitals and medical centres in unites states and in the U.K, which provide general and specialised medical services to its clients (Zuckerman, 2005). In strategic planning, the hospital should put into consideration the various specific needs of the clients and employees in the countries and in different departments. The plan should be client focussed clearly detailing the goals, strategies, and tactics that will be used and a specific timeline within which the goals will be achieved. The timeline should set aside time for training and mentoring employees to the organisational culture and best practises in the field of health care. The plan should also include the methods that the company intend to use in training, coaching and measuring the progress of the employees. Another recommendable growth strategy that HCA should put into consideration is mergers and joint ventures. The reach of HCA should be an area that the management should consider expanding on since in United States of America, it only operates in 20 states while in United Kingdom it is only present in London. HCA should be aiming to acquire other organisations, which will expand its reach to other states in America, by acquiring majority shareholding in other corporation offering health care services. This will save costs that the corporation would have used in setting up new health care institutions, in addition, it will not go through the tedious process of recruiting new staff. Another benefit that will accrue to HCA is that acquisition of new health care facilities will also mean they will ‘inherit’ the clients of the acquired facilities. In high-risk areas that the corporation is not guaranteed of security on investments, it should embrace joint ventures with other firms that provide health care in order to reduce the risk of loss. In the case of HCA, joint ventures should be directed at exploring new markets especially in foreign countries or continents such as Africa. In order to accelerate its growth, HCA should incorporate telemedicine in their institutions because this would help them to achieve faster growth. With the aging population, aging workforce and shortage of health care specialists, telemedicine would help solve this problem by ensuring that a physician can attend to several cases within a short time. For instance, in case a patient develops complications in a rural town where there is no physician near, he or she can be treated by a remote doctor who can review tests conducted on him online and advice accordingly. Medication can be checked on the e-pharmacy and if need be, the client can be transferred to the e-ICU where he or she can be observed throughout the clock. The benefit of this technology is that it would save a lot of costs that would have been incurred in travel expenses for the physicians. In addition, the physicians are able to treat more than one patient concurrently; therefore, increasing the volume of patients that the health care institutions under HCA can handle (Porter and Lee, 2013). It is also recommendable to employ customer-focussed strategy that will ensure the corporation attracts new customers and retains the old ones. Role playing and scripting among employees will also be important, as it will give the employees a chance to test their newly learned skills. The corporation should provide mentorship programs by pairing new employees with old experienced employees. Moreover, as a way of boosting morale among employees, the corporation should adopt some measuring and rewarding mechanisms in its growth strategy. Compensation and reward programs, staff development and training should be aligned with activities and results of staff involved in improving customer experience in the corporation because this will be to boost the morale of the staff to offer their best to the customers. Implementation Plan To achieve the aforementioned objectives, the organization requires conducting an intensive environmental scan to ascertain the internal functioning of its institutions, evaluation of its position in relation to the industry’s tasks environment and evaluation of the external macro-environment factors. This will call for evaluation of its technological advancements in the field of nursing and medicine, and analysis of its preparedness to incorporate/absorb the competitive aspect of other stakeholders in the health sector. To achieve and overcome the social aspect of its programs, the organization will analyse health consciousness, population growth rate, and emphasis on career safety and attitude among the employees (Harrison and A.U. P in Health Administration, 2010). To achieve the growth and expansion objective, the organization will look into political and economic factors such as tax policy, employment laws, economic growth, inflation rates and environmental regulations of different states and economies where they intend to expand their services. This will be coupled by independent programs by its affiliate institutions through effective budgeting and allocation and mitigation procedures in the respective institutions. There will be funds set aside, from the affiliate institutions, to help in financing new ventures that it intends to open within the United States and abroad. This will be guided by the SWOT analysis in which the organization will evaluate its strengths and weaknesses in relation to forthcoming opportunities and threats. In order to achieve an effective implementation plan, HCA intends to combine several tactics which will comprehensively meet the needs of stakeholders in the industry. Policy/strategy formulation will rely on the information from the environmental scan which will be matched with the SWOT analysis to evaluate the optimum strategies. To achieve profitability and competitive advantage, the organization will apply product and services differentiation so as to attract clients from all economic and social backgrounds. This will feature strategies such as lowering costs of medicines and therapies in line with regional needs, differentiating products through mechanization and application of science and technology to promote client satisfaction, and customization of nursing services to be governed by an in-depth understanding of the client. Additionally, to improve on the areas of management and employees’ satisfaction, HCA plans to incorporate two basic communication strategies. These are: Tell and Sell whereby managers and the executives of the affiliate institutions will communicate a more limited set of messages, first telling employees the key issues, selling them on the wisdom of their approach. The other communication strategy is Underscore and Explore whereby executives focus on developing a few core messages that are clearly linked to the organization’s success, while actively listening to potential misunderstandings. This will enhance reflective thinking among the employees and flow of communication among the staff with which will be transferred to the clients in the process of service delivery. The organization also seeks to adopt vertical integration tactical approach in its cost leadership strategies through improving process efficiencies in areas of clients’ application and consultancy, gaining access to a large source of low cost inputs and optimal marketing strategies. This will be necessitated by the technological advancement and expertise that the organization intends to incorporate in its manufacturing and distribution procedures. This will be coupled by the organization’s reputation on quality and innovation of its services and its highly skilled and creative product and services team. Contingency Plans for Identified Risks Varied risks are likely to occur in the organization and among the potential risks include the compliance to standards, fire outbreak risks, quality control risks, changes in technology, hospital equipment failure, institutional restraints, and recruitment and retention staff issues among other risks. Employing contingency plans is vital because this will enable the corporation to find efficient alternatives for managing risks in case the unplanned events occur. HCA should follow effective contingency planning process; thus it should start from early warning whereby they can detect emerging crisis and end with contingency plans activation. An emergency assessment should be carried out and validated, as well as, converted into the response plan. The HCA intends to spread risks through IPO; spreading the ownership risks and changes of political environments in foreign expansions and joint ventures through mergers. It also intends to revise its insurance plans to comprehensively cover its employees and other contingencies such as fire and terrorism. Conclusion HCA is the largest companies in the health care business; however, the corporation faces a number of threats at a regular basis and has to tackle the external environmental factors that the company has little control over. The research project attempted to align the proposed strategic plan with the organization’s objectives, vision and mission, as well as, recommend best strategies for HCA. The research tackled a number of weaknesses within the company which in case cannot be addressed could leave the company at risk. However, the company has some strength on which it can rely on to ensure that it continues to generate revenue at a steady rate. The divisional organizational structure of the company enables it to tackle problems based on the region and or department in which it arises. Moreover, the company has formulated strategy and implemented a contingent plan for reducing environmental risks within the organization. It has also ensured that the solution that is put forward to handle the problem is in accordance to the surrounding environment in which the problem has generated. References BBC News. (2006, July 24). US Hospital Firm Bought For $33bn. Retrieved September 28, 2013, from bbc.com: http://news.bbc.co.uk/2/hi/business/5211216.stm. Cohen, S., Kamieniecki, S., & Cahn, M. A. (2005). Strategic Planning In Environmental Regulation: A Policy Approach That Works. Cambridge, Mass: MIT Press. Hospital Corporation of America. (2013). About Our Company. Retrieved from: http://hcahealthcare.com/about/ Harrison, J. P., & Association of University Programs in Health Administration. (2010). Essentials Of Strategic Planning In Healthcare. Chicago, Ill: Health Administration Press. Ferrell, O. C., & Hartline, M. D. (2008). Marketing Strategy. Mason: Cengage Learning. 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Healthcare Strategic Planning. Chicago, Ill: Health Administration Press. Read More