Strategic Planning for Hospitals Becomes Critical Amid Change

Where are we now? Where should we be going? How will we get there? And how will we know if we are successful? No matter what the market landscape looks like, these are good questions to ask—and answer—on a regular basis. But amid rapid change in the healthcare marketplace, especially for rural and critical-access hospitals, the strategic planning process has become imperative.

“Hospitals today are asked to do more with less,” says Julie Haynes, strategic planning consultant for HealthTechS3. “And when you’re asked to do more with less, strategic planning is all the more crucial to determine where to place valuable time and resources.”

Haynes says strategic planning can help rural and critical-access hospitals stay competitive, stay viable and even grow market share. And as an increasing number of hospitals are in consolidating markets, a strategic plan can help make sure the hospital makes any decision to consolidate from a position of strength, not weakness.

To reap the biggest rewards that strategic planning offers, Haynes recommends following a three-year cycle that starts with creating the strategic plan, six months before the next fiscal year begins. This provides the opportunity for the budget to reflect the strategic initiatives. 

“Those hospitals that follow the three-year cycle seem to be focused on getting things done,” she says. “And those hospitals that report on their strategic plan on a quarterly basis seem to do even better.”

Here’s what to expect, from start to finish:

Start by Determining Readiness

This initial phase is all about setting up the process for success. Establish a planning committee that will help ensure ongoing accountability. The committee’s first job is to determine readiness. The biggest litmus test for readiness is crisis. “If you’re in crisis mode, you’re not ready,” Haynes says.  If not in crisis mode, assessing various dimensions of the organization to determine the readiness for the strategic planning process can be helpful to also head off any potential problem before it occurs in the planning process. 

The committee’s job is also to identify planning goals. In addition to answering the standard questions asked above, strategic planning also can address issues like:

      • Anticipated changes stemming from healthcare reform
      • Opportunities for decreasing operating costs
      • Service line and payment model growth opportunities
      • Physician recruitment and retention
      • Improving quality and patient experience

Define the Strategic Planning Process

With the strategic planning team in place, the next step involves identifying participants (for stakeholder interviews, information gathering and planning retreat) and clarifying their roles and responsibilities and assigning accountability. Haynes says it’s also important to determine a realistic schedule of meetings and activities. Ideally, she says, interviews, information-gathering and analysis should take several weeks. Cramming this important work into a smaller timeframe could result in a less robust strategic plan.

Perform the Situation Analysis

This is the phase where the strategic work begins, including identifying and analyzing external and internal data and performing interviews with the participants identified earlier. Expect to conduct interviews with board members, medical staff, management team and community representatives, including patients. Interview responses not only provide the Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis, but also a critical issues list and other helpful input to consider when creating a strategic plan. Expect also to review market share figures as well as figures resulting from a physician need analysis. 

Identify Strategic Direction and Formulate Strategies

Building consensus around strategic direction should be fairly straightforward, provided all the components of the previous stage were carried out thoroughly. When the results are viewed through the lens of the organization’s mission, vision and values, the strategic direction should become even clearer. Once consensus on the strategic direction has been established, it’s time to develop goals and objective—and reach consensus on those, too. “Fortunately, our process allows the ability for stakeholders to provide their input and reach consensus regarding content for the strategic plan,” Haynes says. Once the strategies, goals and objectives are settled on, the document is finalized and formally approved.

Develop Implementation Plan (and Actually Implement the Plan)

This is the part where the strategic plan becomes tangible. Tactics, timelines, accountability and budgets are attached to each objective, and the strategic plan transforms into a Management Action Plan (MAP) that gets executed and reported to the board on a quarterly basis. This is the biggest mistake Haynes sees hospitals make—not following through on the strategic planning process. “It’s so easy to get caught up in the day-to-day circumstances of running a hospital that you lose sight of the plan that is spelled out in what ideally is a living and breathing document,” she says.

Accountability including regular reports on progress toward goals, as well as holding individuals and teams accountable for effort and results, should be par for the course in any strategic planning process. Is your hospital in need of a new strategic plan? HealthTechS3 can guide you through the process to help ensure it’s a success. Learn more about the strategic planning process or get in touch with Julie Haynes, strategic planning consultant for HealthTechS3.