Strategic Management of Healthcare Organizations
One of the key elements of strategic management is strategic planning, which is defined as a process, often periodic, aimed at developing various steps to help an organization in the accomplishment of set mission and vision using strategic thinking. Notably, strategic planning involves the creation of a scheme whose primary objectives include establish organizational focus, facilitating consistent decision making, reach a consensus of what is best for the organization, and result in a documented strategic plan. The key steps involved in strategic planning are situational analysis, strategy formulation, and planning the implementation of the strategy as can be seen below.
Fig. 1: Strategic Thinking Map of Strategic Management
Source: Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2013). Strategic management of health care organizations. San Francisco, CA: Jossey-Bass, Wiley (p. 12)
Over the past several decades, the role of a strategic planner has changed, with organizations realizing that the development of a strategy can hardly occur in isolation. As a result, many organizations have resorted to dissolving strategic planning staffs. Today, in most organizations, key managers are tasked with coordinating and facilitating strategic planning although the entire organization’s leadership and staffs also have a role to play in the process (Ginter, Duncan, & Swayne, 2013). The reason for the change of the strategic planning role to key organizational managers such as the CEO is that they are more in touch with the external environmental factors such as regulations, competition, technology, and social change. Thus, the strategic planner must showcase key and relevant skills such as coordinating the organization’s overall strategy and facilitating strategic thinking throughout the organization.
Analysis of the external environment is one of the key steps involved in every organization’s strategic planning process. In the analysis of the external environment, a strategic planner must embrace a scanning process whereby they view external environmental information, organize information into desired categories, and identify issues within each category. Arguably, the scanning process creates a “window” to the external environment as it views several external organizations in the general or healthcare environment while searching for current and emerging issues or trends. The “window” concept allows planners to focus on data that is generated by organizations and individuals in the external environment after which the data is compiled and organized into meaningful categories (Ginter, Duncan, & Swayne, 2013). It helps to understand organizations’ issues regarding how undefined, sporadic, unorganized, diverse, or mixed they are which sets the stage for their categorization, organization, accumulation, and evaluation to some extent.
Professional Development
The general environment comprises of government institutions, business organizations, educational institutions, religious institutions, research organizations and foundations, as well as individuals and consumers. The organization’s performance has been adversely affected by unexpected or new trends or issues in these sectors. For instance, shifts witnessed in consumer attitudes and expectations contribute to an organizations’ failure of (Ginter, Duncan, & Swayne, 2013). Also, changes in demographics, although predictable, adversely affect the organization’s performance given the inability to meet the increasing demands associated with an increase in population.
The health care environment comprises of organizations and individuals whose focus is on developing and employing new technologies, dealing with significant change in demographics and social issues, addressing political and legislative change, participating in the overall health care economy, and competing with other health care organizations (Ginter, Duncan, & Swayne, 2013). It is important for organizations to understand the nature of such issues and changes. Thus, an organization’s performance can adversely be affected by some of these issues or trends in the health care environment. For instance, increased competition with other health care organizations could threaten a health care organization’s performance in the long run. Also, the inability to deal with changing demographics and social issues could negatively affect performance.
Various opportunities have emerged as a result of the trends, issues, or events in the external environment. For instance, technological developments witnessed in the external environment have provided better opportunities for health care organizations that can deal with myriads of health challenges. Also, changing trends in terms of demographics has provided opportunities for expansion of the health care sector to meet rising health care needs (Ginter, Duncan, & Swayne, 2013). For the most part, various trends, issues, or events have led to the emergence of new opportunities most of which work to the advantage of major stakeholders. The primary objective of major stakeholders is to ensure that heath care services are offered to individuals without major complications. Thus, trends such as the development of technologies are acceptable to major stakeholders. Also, issues such as increasing demographics have allowed for the expansion of the health care sector, which is acceptable among stakeholders.
New technological developments affect the organization in one way or the other. In most cases, the advances witnessed in the healthcare sector can be attributed to various technological developments. For instance, the convergence of the imaging technology and biotechnology that has been enabled by advanced health care information technology is likely to improve healthcare services such as the diagnosis and treatment of various diseases, especially chronic diseases (Ginter, Duncan, & Swayne, 2013).
Social or demographic changes affect the market or strategy for health care delivery. Significant changes have been witnessed in the ethnic mix whereby minority populations’ access to health care is a big challenge. For instance, despite Hispanics being the largest and fastest-growing race minority in the U.S. and accounting for more than 16 percent of the national population, the race experiences poor health outcomes (Ginter, Duncan, & Swayne, 2013). This is mainly attributed to factors such as the lack of health insurance and lack of access to preventive care, among others.
The legislative and political environments have changed, with various laws and policies being passed to oversee the health care sector with the aim of improving health care delivery. For instance, in recent years, the passage of the prescription drug bill during the George W. Bush administration affected insurance companies, individuals, as well as organizations representing retirees and the elderly (Ginter, Duncan, & Swayne, 2013). Also, during the Obama administration, the Affordable Care Act was passed thereby affecting the health care sector, both positively and negatively.
New economic issues affect operations in the health care sector as well. In recent years, health care spending has declined, a prospect attributed to the high inflation rates forcing an increase in medical costs (Ginter, Duncan, & Swayne, 2013). This has affected people’s affordability of healthcare, as well as taken a toll on health insurance companies that have been forced to cut down coverage. A trend has been witnessed in recent years whereby new competitors outside the health care industry are entering into health-care related areas. For instance, increasing competition for ambulatory surgery has been witnessed in recent years, and this has been a concern for hospitals. Reports show that in 1980, only 15 percent of surgeries were performed on ambulatory basis although the figure has risen to more than 75 percent in recent years (Ginter, Duncan, & Swayne, 2013). Consequently, hospital surgery profits continue to decline annually. This aspect is subject to government response given its focus on improving and addressing the issues in the healthcare sector. In most cases, most outpatient health care services have encountered issues related to non-compliance with society’s moral and ethical codes of conduct.
Reference
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2013). Strategic management of health care organizations. San Francisco, CA: Jossey-Bass, Wiley. Retrieved from https://books.google.co.ke/books?id=qQTGOOZjzL4C&printsec=frontcover&dq=Strategic+Management+of+Health+Care+Organizations&hl=en&sa=X&ved=0ahUKEwjWl7C9od3eAhVEyhoKHQOMD2kQ6AEIKDAA#v=onepage&q=Strategic%20Management%20of%20Health%20Care%20Organizations&f=false