Stakeholders of Riverview Regional Medical Center - Case Study Example

Case Analysis: Riverview Regional Medical Center Identifying Stakeholders The most critical group of stakeholders is the community residents of Gadsden in Etowah County, Alabama. These stakeholders are the most likely market to utilize the services provided at Riverview. Therefore, their opinion about service quality, pricing, and brand personality will be factors influencing revenue production for the facility. A secondary stakeholder group is the established Physician’s Leadership Group at RRMC. This group now maintained responsibility for deciding strategic direction as shared decision-makers at the organization. These stakeholders are impacted by revenue losses, such as with the closing of the Women’s Pavilion dedicated to obstetrics, that impact potential job security. Another group of stakeholders are the nurses that must now comply with the Nurses First philosophy of patient care. Nursing proficiency and visibility as a primary point of contact now makes them responsible for enhancing (or hindering) brand reputation. Job role changes impact issues such as motivation and performance when compliance to change practices is demanded internally. The Federal government represents yet another stakeholder involved with RRMC. Changing or otherwise deteriorating economic conditions pose a risk to RRMC for revenue production in the event that Federal allocations are slashed to fulfill budget needs. Since the Federal government gains taxation revenues from successful business models, this branch of the government has a vested interest in sustainability for RRMC. Shareholders holding common stock in Health Management Associates are also important stakeholders. Stock issuance and valuation represent potential funding opportunities to improve operations, engage in strategic expansion, or procure important service-related assets. Therefore, operational efficiency and strategy development will greatly impact the financial portfolios of these stakeholders. Currently, stock value of HMA is only $10.55 per share (Yahoo! Finance, 2013). Finally, a sixth stakeholder at RRMC is William J. Schoen, the chairman of the board at the facility. This position is regulated by corporate governance laws related to ethical and moral businesses and those outlined in the Sarbanes Oxley Act. Schoen is an accountability figure in the event of improper business practices and must also answer to shareholder inquiries about managerial performance and strategic direction. There are risks associated with compliance for this important, highly-visible stakeholder. Target Markets and Gaps in Marketing Strategy The most important target market are local consumers which is largely a mass market segment, though RRMC marketing executives wanted to further break-down this segment to gain individual market attention. The median household income, as described in the case study, was only $24,823 as of 2000, which is only a moderate increase from 1990 (Richardson & Slovensky, 2004). As of 2013, national demographics for those utilizing health care services included 55.3 percent maintaining employer-sponsored insurance, 31 percent involved with Medicare and Medicaid, and an additional 9.8 percent paying for services with cash resources (Health Pac Online, 2013). With most households maintaining a median income that is near or below the Federally-mandated poverty line, it would not be beneficial to continue with price competition to gain market attention, rather demographic segmentation more appropriate. Individual niche marketing, then, is the strategy of choice to appeal to particular segments. Since the Riverview facility now maintained many specialty services, including heart care, the presence of a diagnostic division, and emergency services, innovations linked with promotional strategy was the ideal methodology to gain new niche market attention. For instance, the MedKey program was designed to offer membership discounts, which would be highly relevant for low-income patients in the county, which appeals to both price-sensitive consumers and also those who value efficiency in the health care process. Even the case study executives described supported this strategy rather than sustaining mass market advertising to gain target market attention. This MedKey incentive and membership program represented a competitive advantage over other local hospitals that did not offer price-related benefits. The only notable gap in marketing strategy is utilization of psychographic segmentation and targeting, which is aligned with consumer values, lifestyles, attitudes, social conditions and ethics (Boone & Kurtz, 2007). RRMC could be conducting both qualitative and quantitative market research to identify these attitudes and values associated with consumer perceptions of health care provision, quality, sophistication and competence. If the business were to properly utilize market research targeted at random samples of demographics, it could find correlations that would assist in developing a more effective promotional model and also internal operations to be aligned with identified consumer preferences. There is no evidence that this important activity to gain real-time consumer sentiment is being performed, which represents opportunity costs for other, less effective marketing strategies. Other competition, as identified by the case study, promote under models of service excellence (as only one example) which is generally aligned with consumer sentiment, such as positioning based on quality while other competitors position based on convenience or pricing. RRMC marketing executives should be looking for opportunities to publicize its innovations (i.e. organizational culture or social responsibility) to gain market attention from those who value interpersonal relationship development with health care practitioners. New Services Opportunities for RRMC The business should be developing an electronic medical records (EMR) system to improve quality, efficiency and productivity. The EMR facilitates more effective collaboration between divisions. For instance, ambulatory workers can access software that already maintains patient information about current drugs consumed, allergic reactions, history of unstable health conditions, or any other needed information (Erstad, 2003). Since the RRMC has been having problems taking market share from other competition, the organization should be looking for opportunities to extend perceptions in the consumer market about competency, sophistication, and efficiency to differentiate the facility from other industry players. This innovation can be promoted under safety and security (risk reduction) for patient markets that are concerned about precautionary and responsible health care practice. Services Requiring Strengthening The RRMC should be putting more emphasis on community-based programs designed to improve health care. The organization created the Heartburn Treatment Center, which is innovative compared to competition, but there should be more services that have this socially responsible angle. For instance, creating a healthy eating program targeted at older consumers that allows for interactivity with these stakeholders (and effectively promoted) would sell the RRMC under corporate social responsibility models of marketing. Out migration is occurring due to promotions about service excellence from competition and diversity of service offerings that were more vast than those offered at RRMC. Such programs could position the business as a humanistic leader to differentiate from competition with more focus on community engagement and program development. Countering Image Problems The organization could create strategic alliances with local physicians not affiliated with the hospital that offer obstetrics and women’s services. Unilateral contracts for management control could have local physician providers treat and diagnose pregnant patients (or provide family planning consultations) under a co-branding strategy. The RRMC could recruit individuals for treatment with off-site allied partners, sharing revenues for each patient sent by the RRMC. This would build a referral network and, if effectively promoted, gain female market attention related to competency and efficiency. Reinforcing that it is a capacity issue and not a financial issue could change negative image problems. Methods to Improve Relationships with Medical Staff Fairholm (2009) describes the transformational leadership model, in which managers role model desired behaviors, reiterate mission and vision to gain commitment, open effective lines of communication, and work toward building individual or group skills and competencies. Nurses and physicians are more motivated when they feel valued in the organization and are provided opportunities for growth and shared decision-making. If Mr. Hayes adopted this transformational philosophy, social learning theory indicates that there is likelihood that others in the organizational model will adopt these same behaviors and thereby build a more effective and cohesive organizational culture. Leadership in a decentralized environment, rather than a matrix structure, would build better cross-functional teams motivated to meet performance targets. Opportunities for inter-organizational consultation and strategy development would also provide incentive to build more positive interpersonal relationships. References Boone, Louis & Kurtz, David. (2007). Contemporary Marketing (12th ed.). United States: Thompson South-Western. Health Pac Online. (2013). Health Care Statistics in the United States. Retrieved February 16, 2013 from http://www.healthpaconline.net/health-care-statistics-in-the-united-states.htm Erstad, T.L. (2003). Analyzing Computer-Based Patient Records: A Review of Literature, Journal of Health Information Management, 17(4), pp.51-57. Fairholm, M. (2009). Leadership and Organizational Strategy, The Public Sector Innovation Journal, 14(1), pp.26-27. Richardson, Woodrow D. & Slovensky, Donna J. (2004). Case 11: Riverview Regional Medical Center: An HMA Facility, Strayer University. Yahoo! Finance. (2013). Health Management Associates, Inc. (HMA). Retrieved February 19, 2013 from http://finance.yahoo.com/echarts?s=HMA+Interactive#symbol=hma;range= 5y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;s ource=undefined; Read More