STRATEGIC PLANNING MAY BE the most formidable job for those in the C suite. It commands fastidious due diligence along with resolute leadership, methodical implementation and unquestioned accountability. Along the way, the plan that’s crafted must be insulated from political maneuvering, ardent mistrust and persistent skepticism.
Planning authorities say the responsibility can intimidate even the most seasoned healthcare executives. That’s because if the plan’s chief architect has to go out on a limb, he may end up twisting in the wind, says Kerry Shannon, solution director for planning and operations for Falls Church, Va.-based CSC Consulting.
“If you launch a plan without knowing your costs, you’ll probably end up with some grandiose project that doesn’t get done, and no one will take responsibility for it,” she said.
Experts recommend that hospitals have a global strategic plan and a more specific fiscal strategic plan included within it. Also essential, they say, is that the two have a financial synergy between them.
“It’s all about your financial capability,” Shannon said. “The strategy is supposed to drive financial output and the strategic decisions to support it. Start with a strategic plan and follow up with a fiscal plan, but make sure it is all in a financial context.”
A sound strategic plan starts with a blueprint that is realistic and pragmatic and contains specific criteria outlined by the designers. Otherwise, Shannon said, the plan can become diluted and lose focus.
“Bad plans become a bad process,” she said. “Bad plans are too nebulous because they can’t drive tactics from them or they are so overly ambitious they become a joke.”
Bruce Hallowell, CSC’s solution director for revenue cycle, says a solid strategic plan foundation must contain elements that address improving quality of care, raising revenues and cutting costs.
“If it doesn’t meet any of those criteria, it shouldn’t be considered,” he said. “You have to bring management acumen into the picture. Too often, a facility will do things because their competitor down the street is doing it. All strategic plans have to go through a strict decision tree using mission-based, decision-making principles.”
Experts agree that the rationale of any good strategic plan should not be, “Where will I be in five years?” but “How do I get there?” They also concede that a successful plan depends a little bit on a favorable roll of the dice.
Still, educated guesses can minimize the risk, Hallowell said.
“By paying close attention to facts, such as patient volume, inventory levels and net revenues, you should be able to make a logical prediction about who your next patient will be,” he said.
In general, hospitals are doing a decent job of formulating plans, said Christine Hartwell, vice president of Philadelphia-based Healthcare Strategies & Solutions. However, she said, carrying out those plans is another matter.
“What we’ve found is that the plans people have are generally solid – it’s the execution of the plans where they have difficulty,” Hartwell said. “Too often, they compete with other operational priorities. Strategic planning is about prioritization. Where it gets squishy is having the discipline to stick to those priorities.”
Conversely, she said, there can be too many priorities.
“Everything-but-the-kitchen-sink plans are destined for failure because they can’t be done even with all the money in the world,” she said.
Strategic planning advisers recommend including no more than five items – and even that amount can be unwieldy, they warn. What’s more, the goals have to be measurable and linked to other organizational functions, said Larry Arthur, a partner with North Kansas City, Mo.-based Hospital Management Consulting.
“Your goals have to be measured against performance and tied together with organizational, financial and operational elements – they all have to work in concert,” he said.
Data collection tools and processing methods have advanced to the point where administrators have a wealth of information at their disposal, which can be used as guideposts, Arthur said.
“Data is better today than in the past, so you have more information to work with,” he said. “If you understand where you’ve been and how things have trended, you have a basis to work off of, which historically hasn’t been available.”
Don Seymour, president of Winchester, Mass.-based Don Seymour & Associates, suggests executives also keep a clear perspective on how the strategic plan relates to daily activities.
“You need to separate long-term strategy from short-term operations and tactics,” he said. “That is an issue that separates executives who understand the issue from those that struggle. They also need to look at where the strategy stops being conceptual and becomes real.”
“My counsel is to focus on the big picture, but at the end of the day, you have to do enough usage analysis to see if you can pull it off,” Seymour added. “If the answer is no, then you either reduce expectations or go looking for help.”