Strategic Planning for South County Hospital in Making It an Accountable Care Organization - Term Paper Example

South County Hospital Strategic Plan towards Converting To an Aco PERIOD: JAN DEC Executive summary Health care is a fundamental human right for all people. Increasing number of people in south Rhode have been requiring this service owing to the increase in occurrence of life style diseases and more people being informed of the need for regular and frequent medical check ups. However offering these health services to the community at an affordable rate has been challenging due to the high cost of procurement and lack of financial incentives for clients to stay in the network where they can access medical services at lower cost. Low profitability of the hospital has placed it at the bottom of the reimbursement. South Rhode hospital intends to solve this situation by joining a heath service provider system such as Care New England. This would make it an Accountable Care Organization benefiting from the merger with other hospital. This would assist the hospital toward continuity of their mission and achieving their vision (Cleverley et.al 288). The merger with other hospitals would help South Rhodes hospital to acquire better bargaining power in procuring services and other requirements. It would also enable SCH to refer some of the severe case to other hospitals within the system. Section One Strategic focus Aim of the plan This plans to improve the financial position of the sc hospital, increase net income and overall profitability. This will lead to sustainable improvement in financial performance and continued growth in cash flow by improving debt ratios; continued growth in inpatient and surgical volumes; continued gains in liquidity Mission statement; Enriching the quality of life for the southern Rhode Island community and visitors through delivery of quality affordable health care services Developing cooperative relationship with other care providers and promotion of wellness through health education and community involvement Vision statement: To achieve a healthy southern Rhode Island community through provision of quality and affordable health services to all our clients To have a community that is informed on health care services, their rights and responsibilities by creation of health care awareness. Long term objectives The south Rhodes hospital through this strategic plan aims at achieving the following objectives: Improve the reimbursement position for the hospital Increase affordability of services to clients Increase treatment opportunities to clients through merger with other hospital Diversify means for paying for the services give hence increase profitability Key organizational competences In order to achieve the above set objectives the hospital management needs to have a competent financial management team that will look into the financial crisis in the hospital. Vigorous marketing campaign shall be necessary to market the new hospital policies and improvement on service delivery, the marketing department should be set out to perform this role. The marketing campaign will also be essential in marketing the services of the hospital as this created consumer awareness. Consumer awareness attracts customers into the organization which then will lead to increase customer turnover and sales or revenues. Organizational values The south county hospital holds the following values in their operations toward achieving the strategic plan goals: humility, honesty, diligence and accountability. Performance objectives The performance objectives below will form the basis of determining the hospital’s performance score. This will be a tool to measure progress towards the achievement of the objectives set in the strategic plan. Performance area Performance Measures Target Time Frame Financial management Biannual income figures and profit calculations Increase in income position and profitability Achieve a 5% increase in the profits 1 year Client and market progress Client turn up record and analysis of trends: repeated subsequent visits by clients Achievement of a 10% increase in the number of customers 2-3 years Internal efficiency and system effectiveness Average service delivery time. Complain handling Efficiency in service delivery Monthly basis Long term infrastructural development Product and service innovation Creativity in development projects Creation of innovative products and services Occasionally Section Two South County Hospital South County Hospital is a privately owned, non profit making hospital that offers acute care. It is located in Wakefield, Rhode Island. The hospital is owned by shareholders who have invested in the institutions shares and stock bonds. The hospital has a capacity of 100-bed. It was founded in a private house in 1919. In 1925, the current hospital was built on a 6 acre land located on the Kenyon Avenue. The hospital eventually expanded to include 13 acres and a 345,000-square-foot infrastructural facility (Cryan 17). Improvements on the facility continue to take place. This hospital offers health services to community living on the Rhodes Island. Market analysis Currently there is increased demand for health care services among the people of Rhodes Island and visitors. This has been attributed to increase awareness among user for the need for regular medical check ups. The increase in rates of life style diseases is also a contributor. The hospitals main clients are the community members who live on the Rhodes Island. The high population creates a large market for health care services and this will help the hospital in acquiring a large market share. Since the majority are conservatives, they rely on conventional health services from the states main hospital as noted by Vestal (par 7). However, this hospital is facing competition from upcoming private practitioners and has had to evaluate its market positioning and marketing strategies for it to remain in control of their current market share. Vestal (par 11), points out that some of the external factors that affect the operations of South County Hospital include the existence of Accountable Care Organisations in other hospital making them are more competitive than SCH (Cleverley et.al 41). Clients are attracted to institutions that give competitive prices and value in their products. Most of the clients are not on any of the available health care systems to cater for their needs therefore, they usually have to pay in less favourable means according to Healthcare.gov par 8. SWOT analysis Strengths Infrastructures the SCH has high quality infrastructure for health service provision Professionally qualified service providers hence high provision of services, which will attract new customers and retain existing ones Location it is the only high capacity hospital in south Rhode Island. This hospital controls a leading market share in Washington County, Rhode Island with since it faces limited competition. The nearest hospitals are approximately a 45 minute drive away; market share has remained stable in recent years Weaknesses Geographical isolation from potential partners High cost of service provision Low position in government reimbursement Low income generation Opportunities Accountable care organizations; these are systems which the SCH can join in order to benefit from the reimbursement of finances Merger with other hospitals; it would increase opportunities to offer better services to their clients Threats Lack of incentives for their clients to stay in the network Low reimbursement, which discourages the workers. Low salaries de-motivate workers. Strategies towards improving the financial state The strategies are based on a model that reflect the belief that the changes management put in place shall reverse the historically operating losses and poor financial performance and moving to a higher level is attainable. Maintaining performance at this level will improve debt coverage ratios and balance sheet balances (Cryan 17). However, rating upgrade is expected to take place in a period beyond 24 month. The key strategies include: To join a health system as an opportunity to create greater reimbursement. SCH plans to join Care New England network in order to benefit from the network high reimbursements Join health system network as a measure towards reducing healthcare costs because they have bargaining power. The hospital will be converted into an Accountable Care Organization so that the clients are able to finance their treatment through either insurance or other financial means as noted by Vestal (par 6). An Accountable Care Organization is an institution whose payment for services and reimbursement is tied to its performance in terms of quality and reducing the cost of these services to the community according to Healthcare.gov (par 6). ACO may use several payment modes hence creating flexibility in accessing health services. Product analysis The hospital intends to strategically improve the quality of service by converting it into an Accountable Care Organization and also offer better general care services at an affordable rate. Currently the hospital is running under the non profit making policy. This policy has contributed immensely to the current financial situation (Cleverley et.al 339). With the inclusion of ACO services, the hospital will be in a position to generate more income from the program since the mode of payment improves revenue collection according to Healthcare.gov par 6. There would be added flexibility in the mode used to pay for the services hence creating a wider client scope. The hospital will also merge with other hospitals in the already existing systems. This will introduce an incentive program that ensures the clients are included in a health care provision that allows them to seek treatment services to any other centre in the system without having to pay for extra charges. The impact created by this product would be increased customer confidence in the quality of services that they get at SC Hospital. Reduced cost of delivering services will be attained since the ACO set up gives the hospital better bargaining power when procuring benefiting from the economies of scale. This will boost both the client and staff morale. Marketing and communication strategy The hospital is currently involved in awareness campaigns for health care services (Cryan 17). This will be used as a platform to market the new products being offered by the hospital. Since it is a cheaper marketing option, it will form the basis for the marketing strategy (Cleverley et.al 288). Offering information to clients when they visit, in the outdoor campaign and addition on the details on the hospital website would ensure that the information gets to the clients. The marketing department will liaise with partners like Care New England system and merging hospitals to market products in the South County hospital so that they can benefit from the service when visiting Rhodes Island. The hospital will also design a hospital website in which all the details about the hospital will be obtained from the site. Through the website, the current and potential customers will be in a position to get adequate information about the hospital and its services. Business system strategies and processes Quality management shall be conducted through an assessment of the client satisfaction through a simple commentary questionnaire filled by randomly selected clients and efficient complaint handling (Cleverley et.al 295). The information will be used on improving quality delivery for optimum customer satisfaction. As a result, there will be increased service sale. A regulatory compliance policy set by the institution shall act as a guide toward the achievement of the set objectives and hence the vision. Financial management is the pillar on which the strategic plan is built. The financial policies that will ensure improved debt measures attributable to improved operating performance and continued debt pay down; debt-to-cash flow, debt-to-operating revenue and maximum annual debt service (MADS) financial management will ensure maintenance of the balance sheet levels with absolute liquidity holding. The social impact through the strategic plan will go from partnering with the community through local organizations on health care provision. It will create rapport between the hospital and the community creating favourable operating environment (Cryan 17). Performance improvement will be keenly monitored by use of the set indicators and compared with the target to monitor progress and correct gaps. Another 4 year strategic plan will be developed at the expiry of the current on build on the milestones achieved. Before another strategic plan is developed, the hospital will first determine whether the set targets have been met as this will form a basis for the next strategic plan. Work Cited Cleverley, Song and Cleverley, James. Essentials of Health Care Finance. Jones & Bartlett Learning, 2010, 7th edition, pg 41-339 Cryan, Bruce. The Health of Rhodes Island Hospital. A Financial Analysis. Rhodes Island Department of Health, 2009, pg 100 Vestal, Christine. Kaiser Health News. Accountable Care explained: An Experiment in State Health Policy, Stateline; October 18, 2012. http://www.kaiserhealthnews.org/stories/2012/october/18/aco-accountable-care-organization-states-medicaid.aspx?referrer=search Healthcare.gov. Accountable Care Organizations: Improving Care Coordination for People with Medicare, March 12, 2012. http://www.healthcare.gov/news/factsheets/2011/03/accountablecare03312011a.html Read More