Advancing the State of the Art in Healthcare Strategic Planning

By Zuckerman, Alan M. | Frontiers of Health Services Management, Winter 2006 | Go to article overview

Advancing the State of the Art in Healthcare Strategic Planning


Zuckerman, Alan M., Frontiers of Health Services Management


SUMMARY

A recent survey of the state of strategic planning among healthcare organizations indicates that planners and executives believe that healthcare strategic planning practices are effective and provide the appropriate focus and direction for their organizations. When compared to strategic planning practices employed outside of the healthcare field, however, most healthcare strategic planning processes have not evolved to the more advanced, state-of-the-art levels of planning being used successfully outside of healthcare. While organizations that operate in stable markets may be able to survive using basic strategic planning practices, the volatile healthcare market demands that providers be nimble competitors with advanced, ongoing planning processes that drive growth and organizational effectiveness. What should healthcare organizations do to increase the rigor and sophistication of their strategic planning practices? This article identifies ten current healthcare strategic planning best practices and recommends five additional innovative approaches from path-breaking companies outside of healthcare that have used advanced strategic planning practices to attain high levels of organizational success.

STRATEGIC PLANNING has become an accepted and common management discipline, both inside and outside of healthcare. A relatively new management tool, strategic planning dates back to the 19603 outside of healthcare and the late 19703 within healthcare. Over the last 25 years, strategic planning in healthcare has matured in its approaches and is increasingly used by healthcare organizations of all sizes and types throughout the United States.

To gauge the state of the art in healthcare strategic planning, The Society for Healthcare Strategy and Market Development (SHSMD) of the American Hospital Association and Health Strategies & Solutions, Inc., an independent management consulting firm, carried out a study in 2005 and 2006 (see Appendix on page 14 for more information). This study induded a survey of the provider-based members of SHSMD, case studies of Healthcare organizations exhibiting advanced strategic planning approaches and/or best practices, and a review of the literature and case reports outside of healthcare for advanced approaches and best practices.

The results were both revealing and somewhat surprising. The overwhelming majority of respondents were senior executives in their organizations as indicated both by tenure in their organizations and in the healthcare field generally. The survey's questions covered a broad range of topics related to strategic planning, including planning frequency, stakeholder involvement, core strategic planning tasks and outputs, and results achieved.

The study presents a mixed picture for healthcare strategic planning today. On the one hand, basic strategic planning practices employed by Healthcare organizations appear to be sound and effective. Strategic planning seems to be well accepted, used regularly, and integrated increasingly well with other management functions; it carries out its main role of providing appropriate direction and focus to the development of healthcare organizations. On the other hand, strategic planning in healthcare has not progressed past a second stage of development, with the first stage being the most basic processes and activities characteristic of the first decade or two of healthcare strategic planning. This failure to evolve to more advanced levels leaves healthcare strategic planning quite far behind the state of the art outside of healthcare.

STATE OF THE ART IN HEALTHCARE STRATEGIC PLANNING

If the results of the SHSMD/Health Strategies & Solutions survey provide a picture of "what is" now, how can the outer reaches of what constitutes best practices in healthcare strategic planning today be characterized?

Based on research, analysis, and field experience, a list often best practices in healthcare strategic planning appears in Figure 1 and is described below. …

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