Why Now Is the Right Time for Your Healthcare Organization To Develop a Strategic Plan
When the COVID-19 pandemic began, healthcare organizations’ strategic planning efforts were put on hold. Now, organizations have more time to address their long-term vision, but it’s more important than ever to look at it with a new perspective.
The pandemic challenged some fundamental assumptions on how healthcare is delivered. If healthcare services can be provided virtually, organizations may not need to keep building at the same rate. Infection control infrastructure is no longer limited to a few negative pressure rooms; it’s now a facility-wide challenge. In a fee-for-service world, no services means no fees; value-based contracts previously ignored now become more attractive. And, insurance realized a banner year as utilization plummeted, begging the question whether it’s time to evaluate a Medicare Advantage partnership.
Healthcare organizations need to look to reposition their assets coming out of COVID. Simply put, the old strategy doesn’t work, and a new game plan must be developed.
However, any discussion of strategic planning in healthcare seems to divide people into two distinct audiences – those who recognize the value and benefit of periodic formal planning and those who don’t. The arguments for dismissing planning include some version of these four objections:
- The environment changes too rapidly; any plan we develop is obsolete before it’s printed.
- We can’t afford to devote time and money to planning, especially after COVID.
- Our strategy is obvious: provide quality healthcare and grow or maintain margins.
- We are all in sync with each other on our direction.
But all these statements are fundamentally flawed, and that holds true whether your organization is a health system or a private practice physician group. Let’s look into each objection a little deeper.
Objection 1: The environment changes too rapidly; any developed plan is obsolete before it’s printed.
Even though the details of a strategic plan are constantly being updated, the fundamentals of the healthcare environment remain the same. Healthcare providers still aim to deliver excellent care, and hospitals and physicians still need to work together. The need for an efficient revenue cycle function transcends any annual coding update.
A well-done strategic plan operates as a living, breathing document that does not get put on the shelf when completed. A proper strategic plan will have the strategic recommendations to achieve the organization’s vision and goals and will lay out a roadmap of tactics needed to achieve those recommendations.
Objection 2: We can’t afford to devote time and money to planning, especially after COVID.
Time and money are precious resources that shouldn’t to be wasted. But the consequences of not having a plan expend both in greater amounts in the long run. Investing the upfront time to ensure you have consensus on direction is a critical element in planning.
One approach we have used for clients is to extend rather than compress the time element so that only two to four hours a month are needed. And many of the time-intensive elements such as interviews, market assessments, and environmental scanning can be in-sourced or reduced to a bare actionable minimum.
Most health systems and physician groups need strategic planning more than ever coming out of COVID. Many of the financial and operational problems before COVID were only exacerbated during the pandemic, and it’s important to have a sound strategic plan to overcome those obstacles.
Objection 3: Our strategy is obvious: provide quality healthcare and grow or maintain margins.
A famous basketball coach was asked one time how he was going to beat the opposing basketball team. The coach replied that his team would simply score more points than the other team. The obvious retort is, “Yes, but how?” This analogy applies for every health system in the country. What you need to do is obvious, but precise execution and detailed implementation can win the game or, in this case, make for an effective planning exercise that wins in quality, community service, growth, and financial success.
A comprehensive strategic plan takes into account both external and internal environmental factors and engages in strategic discussions at all levels of the organization. After all, the devil is in the details, and a good strategic plan aggregates data and insights into actionable, winning strategies.
Objection 4: We are all in sync with each other on our direction.
A calm surface frequently belies a swirling, churning depth. In other words, an absence of conflict does not indicate agreement. But, unless probing and future-looking questions are asked, how do you know?
This question is even more relevant in a physician practice environment. We have seen group performance, culture, and partner satisfaction damaged by unexpected retirements, call burden, changes in practice scope or hours, real estate ownership/expansion/indebtedness, ancillary income/ownership, and of course the compensation model. All of these items could be addressed with proper planning or periodically refreshing the existing strategic plan. And it’s worth prioritizing planning if it avoids any negative connotation or fallout.
As organizations emerge from the height of the COVID pandemic and its effects, it’s the right time to begin – or refresh – your strategic plan. Overcoming objections from those who don’t value strategic planning can feel like a big task, but it’s a crucial one to develop a unified approach and to ensure your organization’s long-term success. Whether it’s helping to reframe their perception about their time investment or highlighting pitfalls of not having a plan in place, it’s important to have the conversation to build a future-focused consensus.
Our KSM healthcare consulting team is here to help. We have a proven track record in assisting and leading the strategic planning process for healthcare organizations. If you need more information on how to get started or have questions about what strategic planning would look like at your organization, reach out to your KSM advisor or complete this form.
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