Cleveland Clinic Strategic Analysis - Case Study Example

? Case Analysis: The Cleveland Clinic BY YOU YOUR SCHOOL INFO HERE HERE Case Analysis: The Cleveland Clinic The Clinic’s Value Improvement Strategy It is the Patients First! philosophy, part of development of a cohesive and dedicated organizational structure and culture, that is the overall strategy for improving patient perceptions of value. It became standardized practice to move beyond the tangibles of care treatment and begin developing interpersonal relationships with patients to maximize their total satisfaction during the care process. The development of a holistic service culture, such as training nurses and physicians to inquire about additional patient support services, put consistency into patient care which provides patients with unparalleled service quality. Additionally, pricing as a value-added activity was included into the business model in order to extend value to patients. By organizing the business into specific specialty institutes, it allowed teams to examine the procurement model to identify potential redundancies or irrelevancy as it pertains to surgical supplies. There were assumptions with many physicians that certain supplies were required by peers in their network when, in reality, they were under-utilized products that could easily be removed from the cost of goods sold. By identifying opportunities to reduce procurement costs, this value could be extended back to the patient to illustrate how Cleveland Clinic could satisfy budget concerns with diverse patients from varying socio-economic backgrounds. Cost savings as a value-added component was also created by developing many multi-disciplinary teams as part of the organizational culture redevelopment under Patient First! methodology. Cleveland Clinic also managed to appeal to the psycho-social needs of many different non-professional staff members that contributed to the care model. By changing their labels from non-professional support workers to that of caregivers, it managed to establish a sense of social belonging in the organization that might not have been present prior to changing these role designations. According to respected models of psychology, establishing a sense of social belonging will ultimately lead to self-confidence (Morris & Maisto, 2005). Metrics illustrating improved patient satisfaction illustrate how appeals to psychological programming inherent in workers build more dedication and enthusiasm toward fulfilling organizational goals. Furthermore, by developing and launching many supplementary wellness programs, it built a more positive brand reputation for The Cleveland Clinic illustrating the depth and genuineness of legitimate care that patients could expect from this progressive and dedicated organization. Areas of Superior Progress at the Clinic Most definitely, the area in which the Clinic has excelled is in organizational culture development. Since 2007, it was a main goal of the business to establish multi-disciplinary teams as a methodology of improving total patient satisfaction and improving the quality of care. Through years of dedicated reward system establishments, improving the status of non-professional caregivers, and giving more shared decision-making to professional and caregiver staff, the organization was able to create a collectivist culture that remained focused and dedicated to achieving the organizational mission of Patient First! values. When an organization is able to create this type of culture, not commonly found in other bureaucratic business structures, it is a significant success. In collectivist cultures such as the one described in the case study, group members mold their identities against important peers and loss of face is a major consideration as it relates to reputation (Cheung, Cheung, Zhang, Leung, Leong & Yeh, 2008). The most successful benchmark for The Cleveland Clinic is changing social attitudes about employees’ relevancy and importance in the organization which has led to many efficiency and productivity gains that are perceived positively by patients seeking excellence in service quality and care practices. Outside of the aforementioned, more humanistic approaches to cultural development, the Clinic excelled in creating a series of metric designed to foster improvements in care and also identify areas of improvement. Dr. Cosgrove, the CEO, began mandating that all divisions begin publicizing regular reports on progress and care delivery that were available online. These outcome booklets maintained the ability to generate much more stakeholder interest in the quality improvements being made at the organization and further provide better brand acceptance over other competing health care facilities in the region. According to marketing theory, when a brand is able to provide stakeholders with a perception of self-improvement and self-expansion, it can lead to a type of loyalty that makes risk of competitive defection much less significant (Muniz & O’Guinn, 2001). This branding strategy utilizing effective public relations is the primary dimension, a non-replicable asset competitively, that connects the external stakeholder community with internal values to illustrate how service is differentiated from competition (Abimbola, 2001). This type of competency and transparency gave the business a well-defined competitive advantage in the minds of many diverse patient demographics. When coupled with transparent elements of corporate social responsibility associated with the wellness program developments, it only served to better engage multiple stakeholders. Potential Areas for Clinic Improvement Despite the many changes made that brought the Clinic better performance and patient satisfaction, there are still opportunities for improvement in the organizational model. One area involves expansion strategy as it pertains to improving patient volumes to maximize per-bed capacity levels. The case study illustrated that 75 percent of its total patient volume stemmed from the local communities where the main campus was headquartered, with only an additional 25 percent stemming from other areas of Ohio, nationally and internationally. Using proper marketing activities, the business could develop better recruitment models, establishing effective promotions, to gain more interest in The Cleveland Clinic by a more diverse, geographically-dispersed demographic of potential patients. If the business were to utilize these promotions to illustrate to potential patients outside of the general North Ohio region, such as focusing on individual division promotions involving, for instance, the cancer center, operating revenues would likely increase. The facility, though pursuing other expansion strategies as identified in the case study, seemed to be too reliant on the revenues stemming from localized patient pools rather than extending the total value and wellness campaigns out of the local headquartered region. Additionally, the breadth of available wellness programs offered by the Clinic could be expanded to include more community-minded programs targeted at specific at-risk groups, such as the elderly or the disabled. When an organization is able to create positive perceptions with stakeholders in the external environment that it is committed to corporate social responsibility, it leads to greater trust in the organization and establishment of more vigorous risk management models (ICCSR, 2007). Though the business was working on launching several community-oriented programs for wellness improvements, increasing the volume of these programs would better engage current and potential patient demographics to illustrate Clinic innovation and diversity associated with a socially-minded agenda for better publicity and transparency. Current Approaches to Growing Clinic Practice The business, as identified in the case study, had been approached by many other hospitals in the region to seek out potential alliances or joint ventures as a means of expanding community or national presence. Large competitors, such as the local UHHS system, maintained significant regional presence and also serviced many patients not currently being served by The Cleveland Clinic. Pursuing alliances in this method maintain opportunities for outperforming major competition and gaining more interest from patients that were currently loyal to the UHHS and other competition. According to Michael Porter (2011), one threat stemming from the external environment is the threat of substitutes, products or services that can be inter-changed as replacements for existing products in a market. Competitors such as the UHHS maintained their own unique policies and conventions about what constitutes quality of care and then establishes their own best practice products and services to gain patient loyalty. By seeking alliances in the fashion described in the case study to expand presence or improve patient volumes, it serves to potentially create barriers to substitutes by aligning resources and competencies from allied partners to create a homogenous definition of quality and service delivery. The current strategy of building affiliate programs is also an effective method by which the Clinic was able to expand its presence locally and regionally. The affiliate program allows for improving patient volume and subsequent revenues for a variety of health care procedures needed by Ohio patients by letting affiliates coordinate various surgical procedures rather than having these scheduled solely by The Cleveland Clinic. Such affiliate programs were also successful as they were able to create standards of care delivery and improve operational strategies in key areas such as technology, joint marketing, risk reduction, and even budgeting. This strategy helps the Clinic identify opportunities for improvement in care and productivity while also putting more publicized brand emphasis on the integrity and innovations available by choosing The Cleveland Clinic over other hospitals to serve patient needs. Growth Initiatives Requiring Expansion at the Clinic The telemedicine program is the initiative that requires expansion, the MyConsult program, which could expand patient perceptions of innovation and also instill convenience into the service delivery model. Ohio is, largely, a rural state environment; an agricultural powerhouse in the nation. Telemedicine would allow the business to gain more revenues by appealing to rural patients needing consultation or diagnoses analyses from other physicians to those who are unable to travel to urban areas to seek quality, expert care. Emory University (2011) identifies that telemedicine’s ability to gain market growth by appealing to rural stakeholders maintains many advantages for revenue growth. Since it was previously identified that the Clinic maintains the majority of its patient volume from local, urban areas, further expansion could be accomplished by extending the MyConsult program into many agricultural regions of the country and also provide wellness advice to these unique patients with diverse needs. It is also common practice in health care facilities to be burdened with paper-based information transfer that often impedes the process of providing care. As one example, telemedicine on military bases has significantly improved responsiveness and treatment times (TAO, 2007). Following this benchmark, the Cleveland Clinic could give much more rapid consultation and diagnoses which would only serve to further satisfy patients who are loyal or could be loyal to The Cleveland Clinic for its excellence in convenient and quality health care services. It seems, according to the concepts identified in the case study, that the organization was seeking many different ways to differentiate service and also to introduce innovations into the health care model currently in place so as to maintain a competitive advantage over other, large-scale competition in the region and local community. Telemedicine represents an ideal methodology for ensuring patient care for the immobilized, mentally disturbed, or even poverty stricken within rural regions (or urban regions) in order to expand the total patient market segments that will lead to better revenue production. Additional Recommendations to Dr. Cosgrove Results of an empirical market research study identified a distinct correlation between actual service quality and willingness for consumers to recommend the quality service provider (Boulding, Kalara, Staelin & Zeithaml, 1993). Though the Clinic was pursuing many different marketing-related strategies to build more publicity and also make the quality of service appear more transparent, there was not enough emphasis on building brand loyalty with existing patients. The health care industry is a highly profitable industry assuming that the organization can lessen the impact of operational costs of providing service care. Dr. Cosgrove should be pursuing more customer relationship management techniques to supplement its current marketing strategies, thereby ensuring that word-of-mouth is improved for those who would be willing to refer family and colleagues to experience the quality of care provided by The Cleveland Clinic. Viral marketing, such as using Facebook and other social media websites, is one excellent method of both engaging consumers and also improving word-of-mouth advertising. It is recommended that The Cleveland Clinic develop interactivity into the organization’s virtual website, such as providing blogs to describe experiences with service delivery or creating some form of incentive to explore the many amenities and service dimensions of the Clinic. Many non-health facilities utilize viral marketing to offer discounts which could, for The Cleveland Clinic, be developed in a way that is appropriate and not budget-restricting. Offering discounts on evenings of stay during short in-patient procedures could provide a short-term incentive related to costing that provides better perceptions of value. By using the social media websites as a low-cost tool of promoting periodic discounting with key procedures or hospital stays, this would act as the motivation to promote more referrals during the promotional period. In certain markets, also, there are consumers that measure their repurchase intentions based on actual testimonials from like demographics sharing similar demographic or lifestyle qualities. The Cleveland Clinic should be utilizing social media opportunities to expand word-of-mouth referrals by offering visual images of like actors in key markets that the Clinic believes needs more focus and emphasis. Under social learning theory, people are likely to mold the behaviors and actions of those they find credible and attractive, thus social media provides ample opportunities for expanding the existing customer base effectively and gaining more revenues in the process. By assigning internal personnel to monitor these blog sites and public testimonials, it would also serve as a risk management tool to ensure that reputational damage is not being included in the many different online interactive areas. If Dr. Cosgrove follows this strategy, the organization may well be able to improve richness in innovations to the business model by examining testimonials highlighting Clinic strengths and weaknesses and, subsequently, making changes to the service delivery model that will have more perceived benefit to many different markets. References Abimbola, Temi. (2001). Branding as a Competitive Strategy for Demand Management in SMEs, Journal of Research in Marketing & Entrepreneurship, 3(2). Boulding, W., Kalara, A., Staelin, R. & Zeithaml, V. (1993). A Dynamic Process Model of Service Quality: From expectations to behavioral intentions, Journal of Marketing Research, 30(1), pp.7-27. Cheung, F., Cheung, S., Zhang, J., Leung, K., Leong, F. & Yeh, K. (2008). Relevance for Openness as a Personality Dimension in Chinese Culture, Journal of Cross-Cultural Psychology, 39(1), pp.81-108. Emory University. (2011). Telemedicine Benefits for HealthCare. Retrieved January 25, 2013 from http://www.emory.edu/BUSINESS/et/P98/telemed/benefits_on_hc.htm ICCSR. (2007). The Role of Stakeholder Engagement in Corporate Community Investment, Nottingham University Business School. Retrieved January 27, 2013 from http://www.cafonline.org/pdf/StakeholderEngagement.pdf Morris, Charles & Maisto, Albert. (2005). Psychology: An Introduction (12th ed.). Pearson Prentice Hall. Muniz, Albert & O’Guinn, Thomas. (2001). Brand Community, Journal of Consumer Research, 27(4), pp.412-432. Read More