Moving toward Strategic Planning Unique to Healthcare

Article excerpt

THE TWO FEATURE ARTICLES in this issue present the state of the art in and the application of strategic healthcare planning.


In examining the state of the art, Alan Zuckerman identifies ten best practices. Apparently, performing well on the first nine of the ten positions an organization at stage two in his four-stage model of strategic planning sophistication. Performing well on number ten-managing strategically-vaults an organization into stage three. To achieve the highest level of sophistication (stage four), Zuckerman proposes that the organization needs to employ an additional five practices drawn from "pathbreaking" companies outside of healthcare.

Zuckerman asks, "What should healthcare organizations do to increase the rigor and sophistication of their strategic planning practices?" One might argue, "Nothing!" If planners and executives are in agreement and pleased with the results (as reported in his study), perhaps making strategic planning more complicated and time consuming (rigorous and sophisticated) may not be such a great idea. His assumption seems to be that "more advanced" will mean more effective in the long run, but at the margin, the time or cost required or the degree of effectiveness gained may not be worth the effort. Zuckermaris best practices are separated into five that are related to the product and five that address the process of strategic planning. Only the fifth practice, achieve real benefits, is actually a product; all the rest are processes-the means and not ends in themselves. Furthermore, all ten best practices are not created equal, but rather several serve as inputs to others. In addition, the five practices (planning characteristics) outlined by Zuckerman and drawn from pathbreaking companies outside of the healthcare sector are actually "characteristics" or "qualities" for performing the ten best practices.


For years we have advocated that healthcare organizations should adopt strategic management practices developed in the business sector-especially considering the relatively long history of strategic planning in business and the relatively short history of its use in healthcare. Certainly, in the late 19805 and 19905 many healthcare organizations had much to learn from pathbreaking companies. It appears that this approach has, for the most part, worked pretty well. As a result, healthcare organizations have come a long way in installing strategic planning and management practices since their cost-plus protective covering was ripped away in the mid-1980s.


Practices from pathbreaking companies outside of healthcare for "stage-four strategic planning," however, may not transfer to healthcare. It is not that increased rigor and sophistication of strategic planning practices (stage-four strategic planning) is not an appropriate goal for healthcare organizations or that the pathbreaking company's planning models do not provide some useful insights, but rather that an entirely different type of stage-four planning may be required-one that acknowledges healthcare's unique organizational and market characteristics. "Coarse grain" (stage one) strategic planning practices may be applied to any industry. "Fine grain" (stage four) practices may or may not apply. Healthcare needs to define its own stage-four strategic planning qualities. Unique considerations might include the following.

1. Some strategic alternatives available to non-healthcare organizations may not be realistic for many healthcare organizations. For example, unrelated diversification or vertical integration may not be viable, as organizations with a single dominant core business that is both capital intensive and human intensive have considerable difficulty operating successfully outside of that core. Further, service area limitations restrict market expansion (market development) for many services. …