Running head: STRATEGIC PLAN 1 Surgery Service Line: Orthopedic- Hip and Knee Program Team B Paula Grundy Amy Toman Simonette Elgert Brook Grzadinski Jenna Godfryd A project submitted in partial fulfillment of the Requirements for the degree Masters of Leadership Siena Heights University
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Running head: STRATEGIC PLAN 1
Surgery Service Line: Orthopedic- Hip and Knee Program
Team B
Paula Grundy
Amy Toman
Simonette Elgert
Brook Grzadinski
Jenna Godfryd
A project submitted in partial fulfillment of the
Requirements for the degree
Masters of Leadership
Siena Heights University
May 18, 2013
STRATEGIC PLAN 2
Background and Overview
Today, health care organizations are strategic in their planning, marketing and product
development. They collaborate with others to bring the newest technology together in specialized
areas in an attempt to capture the competition in their geographical areas. Companies also
examine how they can increase satisfaction scores while enhancing quality improvement. St.
John Hospital is one of those establishments. It was a small organization that was initiated by the
Sisters of St. Joseph and was once a 250 bed facility that employed 70 associates. It has grown to
5,036 employees and has a 1300 member medical staff. The organization is also one of the
nation’s top 100 hospitals including one of the top 15 teaching hospitals. St. John Hospital has
many specialties including cardiovascular services, physical therapy programs and a newly
developed orthopedic program. They have incorporated strategic thinking, strategic planning and
strategic momentum the major components of strategic management in many of their specialty
areas. The development of a strategic plan for the surgery service line for the orthopedic hip and
knee program is critical for success and necessary if the organization is to capture the
competitive market.
According to the Centers for Disease Control and Prevention there are 51.4
million inpatient surgeries done each year. Included in those surgeries are 719,000 knee surgeries
and 332,000 hip surgeries (Center for Disease Control, 2013, p. 1). This is a significant amount
of surgeries and one could project that this number will increase in future years; it has been
projected that by the year 2040 there will be over 80 million elderly in the United States alone.
This data supports the assumption that the increase in the elderly population will increase hip and
STRATEGIC PLAN 3
knee surgeries. The data also suggest that people are choosing to have this type of surgery
because it improves quality of life and risks although still present are small in comparison to
other type of surgeries. The use of current technology and equipment that lower length of stay is
also an important factor. This type of environmental analysis is difficult but it is the framework
in which St. John Hospital has chosen to develop its Hip and Knee program.
Directional Strategies
Directional Strategies are important in any organization as they help to guide an
organization as it grows and develops by providing guidelines to navigate the way business is
conducted. According to Swayne, Duncan, and Ginter (2008) directional strategies are found in
the organization’s mission, vision, and values statements. The mission statement should provide
the reason an organization exists. A vision statement provides a look into the future of where the
organization would like to be in the long run. According to Spallina (2004) the vision should also
be marketable and the basis for the strategic plan. While the values “are the principals that are
held dear by members of the organization” (Swayne, Duncan, and Ginter, 2008, pg 161).
Together these directional strategies, if used correctly, can build a foundation which can set an
organization ahead of the competition.
The mission statement of St. John Hospital and Medical Center states: “St. John
Providence Health System, as a Catholic health ministry, is committed to providing spiritually
centered, holistic care which sustains and improves the health of individuals in the communities
we serve, with special attention to the poor and vulnerable” (www.stjohnprovidence.org).
According to Swayne, Duncan, and Ginter (2008, pg 169) a mission statement should contain six
components. These are their target customers, principal services delivered, the geographical area
STRATEGIC PLAN 4
that services are to be delivered, specific values, explicit philosophy, and what makes a company
different from its competitors. The only item that is missing is the geographical area. Therefore,
the mission statement should be: St. John Providence Health System, as a Catholic health
ministry, is committed to providing spiritually centered, holistic care which sustains and
improves the health of individuals in southeastern Michigan, with special attention to the poor
and vulnerable.
The vision statement of St. John Providence states: Together, we deliver the highest
quality patient care experience, every day, everywhere, for everyone
(www.stjohnprovidence.org). Swayne, Duncan, and Ginter (2008) state that the vision statement
should be unique, idealistic, futuristic, and imagery; the vision of St. John Providence is simple,
direct, and has all the components of a vision statement.
Value statements should be unique and show the principles that an organization holds
valuable to accomplish its mission and vision. The value statement of St. John Providence is:
We are called to:
Service of the Poor – Generosity of spirit, especially for persons most in need
Reverence – Respect and compassion for the dignity and diversity of life
Integrity – Inspiring trust through personal leadership
Wisdom – Integrating excellence and stewardship
Creativity – Courageous innovation
Dedication – Affirming the hope and joy of our ministry (www.stjohnprovidence.org)
The values of St. John Providence are powerful and show what the company stands for and
believes in.
STRATEGIC PLAN 5
Swayne, Duncan, and Ginter (2008) state that after an organization has established its
mission, vision, and values, the next step is to establish the goals that will fulfill the mission and
vision. The goals for the hip and knee program at St. John Hospital are to decrease length of stay,
increase patient and physician satisfaction, decreasing readmission rates, improve the discharge
planning process with proper placement and equipment, quality improvement in the orthopedic
service line, and improvement in market strategies/plans to gain a competitive edge. These goals
will help to lead this program into the future.
External Environmental Analysis
The external environment surrounding a health care organization plays a significant role
not only in the care delivery but in the success of the organization as well. Each health care
organization is trying to position itself to become the leader in the industry. In order to attain
such position, health care organizations are constantly trying to develop their strategic
management such as strategic thinking and planning.
“To be successful, health care organization leaders must have an understanding of the
external environment in which they operate” (Swayne, Duncan & Ginter, 2008, p. 37). It is
important for leaders to be proactive rather than reactive. “One has to make the organization
capable of anticipating a storm, weathering it, and in fact, being ahead of it” (p. 37). There are
different external issues health care organizations are facing:
a. Legislative/Political
b. Economic Changes
c. Social/Demographic Changes
STRATEGIC PLAN 6
d. Technological Changes
e. Competitive Changes
f. Regulatory Changes
The utmost issue in the industry is the increasing cost of healthcare and the decreasing
cost of reimbursement from different payers. There is also rising number of the uninsured. The
national and the global economic downturn affected much of the different industries including
health care. According to the U.S. Census Bureau, as of October 2012, 16.3% of the U.S.
populations are without health insurance, 1.8% of which are over 65 (www.statisticbrain.com).
Because of these, hospitals face the greatest financial challenge, as they have to shoulder the
expenses incurred by patients with no insurance coverage. Although the mission of St. John
Hospital and Medical Center (SJHMC) is to improve the health of patients with attention given
to the poor and vulnerable, to care for the uninsured remains to be a financial burden for the
organization. The hospital must be creative in their strategic move to recoup its losses from
different areas of the operation.
Hip and knee replacements are surgical procedures mostly availed by patients over 60 to
increase their quality of life by relieving arthritis pain and improving mobility. In general, both
procedures are done on an elective basis after other alternatives have failed. Patients over the age
of 60, usually has healthcare coverage through the Medicare/Medicaid programs. SJHMC
recently renovated the orthopedic floor in order to increase marketability of the service line.
What the hospital need is to improve their marketing techniques in order to remain competitive.
As stated earlier, the service line has an underdeveloped marketing and advertising strategy.
Successful marketing of the service line also has the potential to increase the number of cases
2 Return on investment2 Leverage3 Liquidity2 Capital required/available2 Cash flow3 Ease of exit from market3 Risk involved in business
Average= 2.43
(-6 worst, -1 best)
-3 Technological changes-3 Rate of inflation-3 Demand variability-2 Price range of competing services-5 Barriers to entry into market-5 Competitive pressure-3 Price elasticity of demand
Average 3.43 -6= -2.6Strategic Posture
Strategic position and action evaluation factors
Space Matrix
STRATEGIC PLAN 20
The factors indicated above identify elective hip and knee surgeries at SJH&MC as a
conservative posture. The conservative posture suggests that the organization is in a stable
market but with low growth. It also indicates that the focus of the organization is on financial
stability. The critical factor is the lack of competitiveness in the market.
Strategic Position.
STRATEGIC PLAN 21
Orthopedic surgery has escaped the focus as an identified center for excellence, which
currently focuses on heart and vascular care, oncology, weight management and neuroscience
despite the opportunities in this market. The number of Medicare patients treated for major joint
replacement (DRG469 and DRG 470) at St. John Hospital and Medical was 222 patients during
October 2010 through September 2011. Henry Ford Hospital treated 156 patients and Beaumont
Royal Oak treated 1,173 patients (www.medicare.gov). There is significant opportunity for
improvement in the acquisition and retention of patient at the organization. Since the addition of
the spa and gym, the physical environment and added amenities are comparable, if not superior,
to the competitors. The organization needs to take a more competitive position. The marketing
and advertising aspect for the program is severely underdeveloped due to financial constraints.
The orthopedic physicians have affiliations with multiple hospitals in the area, so loyalties are
fragmented. The focus, at the present time, needs to be improving the customer and physician
satisfaction and loyalty. Although orthopedic surgery may be necessary as a result of trauma,
most joint replacements are considered an elective surgery. The consumer may have the time
and resources to research their options and discuss the options with their physician of choice.
The organization need to help the consumer realize that despite the uncertain economic times in
healthcare, the commitment to safe, reliable health care remains constant.
Upon comparing customer satisfaction scores via Hospital Compare
(www.medicare.gov), SJH&MC satisfaction score are comparable to Henry Ford Health System
and Beaumont Health System with the exception of cleanliness in which SJH&MC lags behind.
Despite the similarities in overall satisfaction scores, only 69% of the patient treated at SJH&MC
would recommend the hospital, whereas 72% of the patients at Beaumont hospital would
recommend the hospital. Although, this information is not at the unit level, it would be the
information that the consumer can freely access and potential use to make their hospital choice.
The customer needs to be the primary focus. Although, large advertising campaigns are
not financially supported, there are opportunities through community events and groups to
promote the services at the organization and bring people into the institution. Senior community
centers churches and senior living communities are a great place to hold lectures and educational
programs. Also, partnering with physicians on these ventures will encourage the choosing of the
hospital. One would be remiss not to assess the nursing care of the orthopedic population which
can tie into physician satisfaction. Increasing the nursing satisfaction would potentially decrease
the turnover of staff. Ensuring long term staff also helps to forge partnerships with physician.
Nursing certification in orthopedic nursing would validate that the nurses on that unit are experts
in the area of orthopedics. Certification is also a necessary component in the Magnet journey.
As previously stated, the patient satisfactions are comparable among the competitor
hospital. The organization needs to ensure that the patients are well cared for, even outside the
walls of the hospital. Currently, a program is in place to ensure new prescriptions are delivered
to the patient’s room prior to discharge. Potential initiatives could be follow up phone calls from
the units, ensuring follow up appointments are scheduled prior to discharge. The process from
admission needs to be seamless, with mapped processes, to ensure that every customer has the
best possible experience and outcomes.
Summary and Conclusion
Addendum A
STRATEGIC PLAN 23
Mission: St. John Providence Health System, as a Catholic health ministry, is committed to providing spiritually centered, holistic care which sustains and improves the health of individuals in the communities we serve, with special attention to the poor and vulnerable.
Vision: Together, we deliver the highest quality patient care experience, every day, everywhere, for everyone (www.stjohnprovidence.org)
Service line: Orthopedic Surgery
Parent (Hospital) Strategic Goal
Service line
Critical Success Factor
Service Line Strategy
Measure/Target Tactical/Action Plan
Maintain and enhance the hip and knee program
Product competitiveness
Adaptive Strategy Increase utilization of spa services by 5% over last fiscal year
Improve patient satisfaction scores by 5% over last fiscal year
Promote ancillary services at pre-surgical education session and book appointments
Initiate purposeful hourly rounding
Partner with housekeeping to keep environment clean
Utilize holistic modalities (aromatherapy, music therapy) to enhance pain
STRATEGIC PLAN 24
control
Promote spa services throughout hospital stay
Home care representative to meet patient in hospital and advise on home care process
Reconfiguring the value chain strategy
Ability to serve market at lowest cost structure
Market Strategy Revisit the pre-admission to discharge process and eliminate non-value added encounters
Increase the market share in hip and knee population through advertising
Positive word of mouth advertising
Market Strategy Participate in a minimum of 5 community each yearly
Nursing staff and/or physician to provide community education opportunities
Publish items related to ortho services in local community papers or church flyers
Increase staff participation at
STRATEGIC PLAN 25
community events (Arthritis Walks, Senior expos) and have promotional material for distribution
Identify as a Center of Excellence
Financial strength
Competitive Strategy
Obtain orthopedic certification for hospital program
Greater than 50% of staff RN have bachelor’s degree or greater
Increase the number of certified RN by 10% each year
Continue to utilize technologically advanced equipment and evidence based practice
Ensure physician and staff are educated and utilizing best practices
Offer incentive to nurses for obtaining orthopedic certification
Conclusion
STRATEGIC PLAN 26
St. John Hospital and Medical has the framework to become a leader in the market of hip
and knee surgery but currently lags behind its competitors. We must take a more competitive
position to ensure viability of the program. The plan should focus on improving the currently
process and positive word of mouth advertising given the lack of advertising funding. The
increase in patient and physician satisfaction along with quality improvements of the service line
will draw positive attention to the service line. As the organization gains more of the market
share, the revenue will naturally increase. The increase in revenue can be reinvested into the
program allowing the current services to be maintained and additional services to be offered.