Week 1 DB - Capstone
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Liberty University *
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Health Science
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Feb 20, 2024
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Many think of strategy as it generally refers to a carefully planned and organized set of actions or initiatives designed to achieve specific goals and objectives within the healthcare industry. While this is a great definition, it can mean different things to different people. “Some may think of strategy as a formal plan; some believe that it involves crafting a process or means for outwitting a competitor. Yet others see strategy as a way of doing business, positioning an organization, and determining competitive differences” (Walston, 2023, p. 4). It involves making
choices about how an organization will allocate its resources, compete against its competitors, and position itself to succeed in the long term. “The development of a business strategy begins by asking three important questions: where is your practice currently, where they want to be in the future, and how do you want to get from point A to point B?” (Wayland & McDonald, 2021, p. 182). Overall, the healthcare industry is complex, dynamic, and ever-changing, and any type of strategy implemented must be able to change and adapt along with the organization working to better themselves. One major aspect of a strategy is that organizations are competitors; how can a healthcare facility set itself apart and what can they prove to the community? Ultimately, this is something that no other practices are providing. When developing a strategy, many individuals are usually involved; either a specific team is established, employees from all different departments of a healthcare facility, or the executive team participates in these decisions. Within the realm of healthcare administration, strategy and strategic management provide a framework for the decision-making process. While the implementation of a strong strategy can impact an organization, facilities must work to implement and maintain these strategies as “external factors can pose a greater threat to strategy and often come from within. A
sound strategy is undermined by a misguided view of competition, by organizational failures, and, especially, by the desire to grow” (Porter, 1996, p. 75).
Three strategies used in healthcare are the broad low-cost strategy, the focused low-cost strategy, and the broad differentiation strategy. A broad low-cost strategy is focused on a wider customer base, one that seeks competitive advantage by maintaining a low cost of care and underpricing services by maintaining a more value-based cost on drugs and services. This strategy focuses on underpricing its competitors to earn higher profits for any healthcare organization. This strategy is effective in markets in which cost is most important and where organizations are not focused on one’s reputation or the characteristics of the services rendered. A low-cost strategy can maximize an organization's market share. While all of this is focused on value, low-cost products and services still must maintain a certain level of quality and differentiation. Consumers must perceive the lowest cost for the value received. To be successful
in this low-cost strategy, healthcare organizations must make some changes on their end. Eliminating lower-volume products and services from their overall service offering while maintaining services that generate the greatest sales and profitability can greatly sway any healthcare organization's spending and influence its profits.
Another effective strategy is a focused low-cost strategy; this “strategy refines the broad low-cost approach by narrowing its customer base and possibly undercutting the pricing of generalists” (Walston, 2023, p. 63). As the healthcare industry is a highly competitive market, smaller, low-cost organizations may find a niche in which their larger facility counterparts cannot compete. I currently work for an oncology practice that serves a larger regional metropolitan area. We consider our oncology care to be of great quality, but we also implement a
value-based care approach. We do this by managing our drug administration, always managing
specific drugs to make sure we cannot use a lower-cost option, our goal is to keep our overall send to the lowest possible dollar amount while providing high-quality and around-the-clock care
to patients navigating a Cancer diagnosis.
Broad differentiation strategies are focused on offering products and services that have unique features and appeal to a wide segment of a market. If an individual sees a high-quality service, they will generally pay a higher fee for those highly coveted features. This strategy “tends to be the most effective in large markets where buyer preferences and values are diverse, many organizations offer more common products, and overall innovation is moving at a rapid pace” (Walston, 2023, p. 65). Differentiation can be incredibly effective and applies to all types of goods and services. Organizations must understand and offer what patients and customers need and value to succeed when it comes to differentiation.
When thinking of strategy and how it can greatly impact any healthcare organization that wishes to do the work, I am reminded of Proverbs 20:18: “Plans are established by seeking advice; so, if you wage war, obtain guidance” (NIV, 2018). Diligence and planning are important
in any industry, as many ideas and strategies may not always be the most successful. Trial and error can come in handy when trying to find the best processes and strategies for any major healthcare facility.
Resources
Porter, M. E. (1996). What Is Strategy? Harvard Business Review
, 74(6), 61–78.
Walston, S. L. (2023). Strategic Healthcare Management: Planning and Execution
(4 th). Health
Administration Press. Wayland, M. S., & McDonald, W. G. (2021). Strategic analysis for Healthcare: Concepts and Practical Applications
(2nd). Health Administration Press. Zondervan. (2018).
Proverbs
.
NIV Journal the world
Bible. essay
Replies
Hi Miriam, I very much enjoyed reading your post on strategy. I appreciate how you started by looking back, into the history as I had no idea that strategy implementation expanded into the healthcare industry in the 1970s. From our reading this week, we have learned that the development of a strategy is incredibly important. The decision-making and strategy development process is rarely one person’s decision, as “it most often involves a team, in which individuals are pulled from various departments” (Wayland & McDonald, 2021, p. 221). I very much agree with you when you mention the importance of leadership as the implantation and
success of any major strategy or change can be difficult if you do not have a dedicated and focused manager. The development of a strategy for any major healthcare organization is focused on the goals for the future as organizations want to implement change for the better. “
Studies of implementation strategies should increasingly focus on establishing the processes and mechanisms by which strategies exert their effects for the good of the organization” (Powell et al., 2019, p. 4). The strategies you had selected to review were informative. I live in an area with a large healthcare presence and multiple major health systems, from your descriptions I can clearly identify the corporate-level
and business-level organizations. In my thread, I discussed cost strategies as that is also very relevant to the region in which I live and the organization in which I
work. I currently work for an oncology practice; we pride ourselves in being a more value-based care practice as we want to make sure everyone can receive oncology care. As future healthcare administrators, we have a passion for helping the sick, I am reminded of John 10:10, “The thief comes only to steal and kill and destroy. I came that they may have life and have it abundantly” (NIV, 2018). As patients receive a difficult diagnosis, they often feel hopeless as if they are being robbed of life, we must keep spirits high as all have an abundant life if they live for the Lord. Resources
Powell, B. J., Fernandez, M. E., Williams, N. J., Aarons, G. A., Beidas, R. S., Lewis, C. C., McHugh, S. M., & Weiner, B. J. (2019). Enhancing the impact of implementation strategies in healthcare: A research agenda. Frontiers in Public Health
, 7
, 1–9. https://doi.org/10.3389/fpubh.2019.00003 Wayland, M. S., & McDonald, W. G. (2021). Strategic analysis for Healthcare: Concepts and Practical Applications
(2nd). Health Administration Press. Zondervan. (2018).
John
.
NIV Journal the world
Bible. essay
Hi Lexine, I enjoyed reading your post on strategy. From the reading this week, we have learned that strategy generally refers to a carefully planned and organized set of actions or initiatives designed to achieve specific goals and objectives within the healthcare industry. Strategy involves making choices about how an organization allocates resources, compete against its competitors, and position itself for success in the future.
Strategy has a few different meanings as
“some think of strategy as a formal plan; some believe that it involves crafting a process or means for outwitting a competitor. Yet others see strategy as a way of doing business, positioning an organization, and determining competitive differences” (Walston, 2023, p. 4). As
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you mentioned, having a strategy essential to the success of any change in processes for any major healthcare organization. You had mentioned the American Heart Association, and how they set strategic goals to help the community. Such practices are fantastic as a clear direction can lead any organization on
a successful path. I know in my current organization, we set strategic goals to accomplish large tasks. We are currently participating in a payment model set into place by the Center for Medicare and Medicaid Services. This program rewards my practice for spending the least amount of money possible for providing cancer care. This program forces us to think strategically, making sure we are providing the appropriate and the most cost-effective care for our patients. As my practice provides value-based care to the area, we have a lot of patients that struggle financially. Over the last decade, many health systems in low- and middle-income areas “have taken advantage of the increasing prevalence of digital technologies, particularly mobile phones, to circumvent bottlenecks in cancer control” (Rossman et al., 2021, p. 5). When thinking
of helping those navigating a difficult diagnosis, I am reminded of Jeremiah 33:6, “Nevertheless,
I will bring health and healing to it; I will heal my people and will let them enjoy abundant peace
and security” (NIV, 2018). Trusting in the Lord can bring an individual health and a cure, not always physically but through peace and truth, or stability.
Resources
Rossman, A. H., Reid, H. W., Pieters, M. M., Mizelle, C., von Isenburg, M., Ramanujam, N., Huchko, M. J., & Vasudevan, L. (2021). Digital Health Strategies for cervical cancer control in low- and middle-income countries: Systematic review of current implementations and gaps in research. Journal of Medical Internet Research
, 23
(5). https://doi.org/10.2196/23350 Walston, S. L. (2023). Strategic Healthcare Management: Planning and Execution
(4 th). Health
Administration Press. Zondervan. (2018).
Jeremiah
.
NIV Journal the world
Bible. essay