GE Healthcare Camden Group Insights Blog

Top 10 Considerations for Strategic Planning in Uncertain Times

Posted by Matthew Smith on Jan 3, 2017 2:19:57 PM

By Laura P. Jacobs, MPH, President, GE Healthcare Camden Group

Healthcare has entered a period where confusion and uncertainty will be the overarching context, where the performance challenges and financial pressures on organizations will mount, and where more constant and ever-present change will be the new normal. With healthcare policy, insurance coverage, and economics headed for change with a new administration, coupled with the already turbulent healthcare environment, many healthcare leaders are concerned about how to develop reliable strategies for the future. Is effective strategic and financial planning even possible with so many variables up in the air? Yes, and one could argue it is even more critical to have a clear path forward during unsettled times. Here are 10 considerations for strategic planning in times like these:

  1. Stay true to your mission and vision. When your organization established its mission and vision, they were meant to be statements of the long-term purpose and role of the organization. The mission describes why the organization exists, and the vision establishes the destination. While a changing environment may require adapting strategies or refining tactics and action steps, staying focused on the long-term destination is especially important when approaching headwinds. If a “refresh” of the vision is required, do so with a long-term lens, based on how your organization can best meet the intent of its mission.
  2. Don’t panic. This is not a time to allow inertia to overtake the organization. It could be helpful to re-evaluate the variables that could affect your results – Medicaid coverage, commercial insurance coverage, reimbursement rates, etc. – but many of these things won’t change overnight. Like an airline pilot encountering unexpected weather ahead, it is important to reassess your approach based on current information. But a lack of forward momentum can result in a mid-air “stall” for your organization – from which it could be hard to recover. Another reason to remain calm and adhere to the core principles of your organization and its mission.
  3. Focus on the “knowns.” While there are many things we don’t know about specific federal and state policy changes ahead, we do know many things that are unlikely to change. The imperative to reduce costs and deliver value and reliable outcomes, the aging of the population and the complexity of caring for multiple chronic conditions, rising consumer expectations for access and a better experience, the increasing number of disrupters that are poised to provide alternatives to traditional delivery, and the continued advancement of medical biotechnology and information technology are just a few of the trends that are not abating any time soon. Further, there will still be legacy competitors and new entrants in your market that will be striving to take market share and improve their position at your organization’s expense. Once you take stock of the things that are NOT changing, creating a strategic direction will be less daunting and will create the framework for moving forward.
  4. Engage all stakeholders. Most strategic planning processes include a method for obtaining input from the organization’s key stakeholders:  board members, medical staff, management, community members. In times like these, make sure that you have the pulse of employers, payers, and other healthcare entities with which you may interact such as FQHCs, post-acute providers, or behavioral health providers. Non-healthcare entities such as retail or technology providers may also provide good insight. Understanding the potential direction and actions that all related entities may take will allow you to have a more complete view of the variables for which you may need to be prepared. Furthermore, involving these parties in your planning process will enhance their ownership of the plan and their participation in its implementation.
  5. Refresh your financial plan. This is equivalent to checking your fuel gauge before take-off. With the possible need to divert your route, it is important to know the resources required and capacity to withstand downturns within your financial position. Be sure to take an objective view of your current state, including understanding the ability to withstand lower reimbursement rates, higher interest rates, or changes in payer mix. It may also be helpful to model the likely financial impact of federal and state policy changes on your organization, such as possible reductions in Medicaid coverage, should those come to pass.
  6. Conduct rigorous scenario planning. With an integrated strategic and financial planning process, your organization can “pressure test” various scenarios. The scenario planning will help evaluate the impact of various financial, marketplace, and other variables in your planning assumptions. This will help identify the areas of greatest risk, and prompt the identification of actions to mitigate those potential risks for inclusion in your strategic plan.
  7. Avoid “herd” mentality. Your strategic planning process must reflect yourorganization’s situation and mission. While it is important to learn about how others are responding to the current healthcare environment, it is also important to chart a path that is individualized for your organization. It is even more critical to identify how your organization will be distinctive, based on its culture, capabilities, resources, and current position. A strategic plan that defines how that distinctiveness will be cultivated and nurtured requires setting clear priorities and considering approaches that your competitors or those featured in industry journals may not have considered.
  8. Stay close to your market. Keeping an ear to the ground regarding local market conditions is especially important when so many variables have the potential to change. Are new disrupters – new delivery models, new technologies, new or growing competitors – making an impact in your market?  Are new payers or are local competitors changing the way they develop and pay their provider networks?  How is your state responding to changes that may be made to Medicaid or insurance exchanges?  Having knowledge of national trends is important to learn what could impact your market; being sensitive to local market conditions will allow your organization to apply those learnings in a meaningful way.
  9. Develop an organizational navigation system. While the strategic plan will provide clarity on the goals and priorities for the organization given the assumptions and expectations made at the time, it is also important that the planning process consider how the organization will absorb information and create alerts when a new route may be required. Just as your GPS system can provide alerts when there are traffic situations ahead and suggest alternative routes, your organization must develop its own ability to respond to changing conditions and still get to the desired destination.   Some organizations have found that having a “rolling” strategic planning process, that allows the plan to be refreshed each year, is the best way to keep the roadmap current. Keeping the strategic plan front and center as part of board discussions will also assure that you are continuously testing assumptions and assuring the relevancy of your plans.
  10. Communicate and activate the plan. In uncertain times, it is ever more important to assure that the strategic plan is well understood throughout the organization. Demonstrating that leadership has considered all internal and external factors and developed a clear path forward will go far in building internal confidence and focus. The absence of a well-articulated and communicated plan raises the risk of an explosion of potentially conflicting initiatives, as nervous management or physician leaders react to uncertainty by taking matters into their own hands. The final step in the planning process must assure that the strategic plan is fully activated:  translated into management goals, including accountabilities and timeframes; integrated with the budgeting process; and is a cornerstone of board discussions.

In uncertain times, it is the most resilient and agile organizations that succeed. To create resilience requires having a solid foundation that a well thought and thoroughly constructed integrated strategic and financial plan provides. To optimize its effectiveness requires that the organization use the plan as it would a GPS navigation system:  know your destination, know the resources and capabilities available before you leave, be alert to changes in conditions ahead, make sure the driver and its passengers are aware of the route, and be agile and ready to make course corrections as new information is absorbed.

 Strategic Planning in Uncertain Times

Jacobs.jpgMs. Jacobs is president at GE Healthcare Camden Group and has been with the firm since 1990. She has more than 30 years of experience in the areas of integrated delivery system development, payer strategy, population health management, healthcare strategic and financial planning, transactions, and governance/management systems. She is a noted speaker and industry resource on the impact of healthcare trends, most notably the requirements for success in value-based payment models, clinical integration, and creating successful integrated delivery systems. She may be reached at

Topics: Hospital Strategy, Laura Jacobs, Strategic Planning, Healthcare Strategy

Disruptive Change = Strategic Opportunity

Posted by Matthew Smith on May 5, 2015 9:20:00 AM

Can you hear it? Can you feel it? The buzz about disruptive change and how it is already transforming healthcare is everywhere. The proactive entry of Apple, Google, Walmart, CVS, HealthSpot, Scanadu, IBM, and many others into healthcare is highlighted in daily social media feeds, industry news summaries, healthcare journals, and business newspapers.

The Leading Edge of Disruptive Change

Hundreds of entrepreneurial companies fueled by significant investments (private equity, health plans, commercial companies, some health systems), and leveraging technologic breakthroughs are bringing to market new products and processes that are disrupting traditional forms of clinical care and patient-provider relationships.

Their presence is accelerating a change in provider roles and the location of care, and thus has significant economic consequences for hospitals, physician organizations, and other providers. This has the potential to create substantial strategic opportunities for providers that get out on the front edge of the wave. A failure to take notice and have a plan of action could leave your organization on the sidelines or marginalized.

Disruptive change involves a modification in a service, product or process that breaks apart old, existing relationships/arrangements and value equations and creates new ones. Three examples illustrate recent disruptive change:

  • Use of smart phones by owners to self-monitor and transmit health information (i.e., heart rate and electrocardiogram, images of the inner ear, blood glucose level, dermatology scans) to physicians enables patients to have a direct role in diagnosing and managing their health, eliminates their need to travel to physician offices and emergency rooms for evaluation, and thus changes the patient–provider relationship and reduces both out-of-pocket costs for the patient and income for the provider.
  • Laboratory companies will begin to invite customers to go online to pay for tests, direct them to a service center to have blood drawn, and provide access to results on the Web. This will alter the role of physicians and hospitals in diagnostics and the associated funds flow.
  • Integrating an individual’s genome profile, national databases on treatment and outcomes, and predictive analytic algorithms enables the personalization of treatment thus changing the use of medical and surgical care thereby altering the economics of care for patients, providers, employers, and health plans.

The principle “drivers” of disruptive change in healthcare are:

  • Technologic innovation (i.e., mobile health, telehealth, genomics and molecular biology- driven personalized care, bionics and 3D printing, predictive analytics)
  • Consumerism
  • An orientation to “on-line everything”
  • Entrepreneurs seeking a piece of the nearly $3 trillion healthcare market (i.e., start-up companies with new solutions, entry of retail pharmacies and “big box” stores into healthcare delivery, diversification of  telecommunications, IT and data base companies into healthcare)

Powerful Strategic Initiatives: A Scenario

The following scenario illustrates how a provider organization could leverage just a few of the new products and processes to support their existing initiatives and achieve substantial strategic and financial benefits. The hospital/system enters into a regional exclusive relationship with Apple (HealthKit), Scanadu (Scanadu Scout, a medical tricorder), and Google (data warehousing and sharing). The collective patient monitoring and care management capabilities are applied through its patient centered medical home and embedded in the protocols specific to its bundled payment arrangements. They are implemented in collaboration with new patient access point partners (clinics, urgent care centers) dispersed throughout the service area and by the clinical staff of a newly formed preferred provider post-acute care network. Patients self-monitor and/or are “seen” by nurse practitioners and physician assistants (in collaboration with physicians), enabling their care to be coordinated across the continuum and managed in the lowest cost settings appropriate. Medical staff members remotely “staff” HealthSpot telehealth kiosks placed in selected Rite Aid stores. The collected outcome is a newly established virtual provider network consistent with population health that has a geographic footprint surrounding competitors and extending to outlying portions of the service area without having to build or buy “bricks and mortar” sites. All established through the use of the resources of strategic partners minimizing capital investment and speeding time to market.

Can you afford to wait and watch while a competing provider, a major payer, or an employer consortium leverages disruptive change and by-passes your organization? 

Four Keys to Embrace Disruptive Change

2015 is the time to embrace disruptive change and identify the opportunities it presents. To get started, you must address the following:

  1. Educate your management team, board, and medical staff on the disruptors and the implications.
  2. Designate an individual to lead your organization in identifying and capitalizing on disruptive change initiatives.
  3. Answer the key questions:
    • “Which disruptive changes are most relevant to the future of health services in this market and for my organization?
    • What is the upside benefit to us? How do the new products, processes, and companies fit with and enhance the execution on our organization’s fee for value and population health initiatives?
    • What are the consequences of the missed opportunity?
  4. Determine the role of your organization by answering:
    • What capabilities and competencies do we need to take advantage of the disruption? Do we possess them or should we seek to collaborate/partner with a company(ies) leading the change?
    • What criteria should be used to identify, screen, and select a partner(s)? What compelling value proposition can we “pitch” to prospective partners?

Capitalizing on disruptive change and the inherent strategic opportunities is so critical it should be a distinct goal and set of actions in your strategic plan and have assigned accountability. The time to take action is now…the countdown clock is ticking on this window of opportunity.

For a more detailed profile of disruptive change and the entrepreneurial companies driving this evolution, please download The Camden Group’s Disruptive Change and Strategic Opportunities by clicking the button below.

Disruptive Change, Strategic Opportunities, The Camden Group

Topics: Disruptive Technology, Disruptive Change, Hospital Strategy, Strategic Opportunity

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