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William Beaumont Hospital

Strategic Plan Project


LDR-660: Strategic Plan & Implementation Professor Fick Team B Shawn Armstrong, Rochelle Benton-Ford, Roland Gardner, Kimberly Pizaa May, 23 2012

Objectives
Background & Overview of Beaumont
Directional Strategies External Environmental Analysis Service Area Competitor Analysis (SWOT ANALYSIS) Internal Environment Analysis Organizational Structure

Strategy Formation and Evaluation


Summary and Conclusion

Background & Overview of Beaumont Hospital

Background & Overview of Beaumont Hospital


1955 Beaumont opened as a 238 bed hospital in Royal Oak, MI
1977 Beaumont opens a 394 bed Hospital branch in Troy, MI. 2007 Beaumont acquires a third hospital of 250 beds in Grosse Pointe, MI 2010 Beaumont Hospital is now Beaumont Health System (Royal oak, Troy, and Grosse Pointe)

Background & Overview of Beaumont Hospital


Beaumont Hospital
Development 1,070 Bed Tertiary care facility

Level I Trauma
3rd Largest Hospital in the U.S. Largest In-Patient Hospital in the U.S. Nationally recognized

Background & Overview of Beaumont Hospital


Beaumont Hospital
Facility & Services Imaging Center, housing X-ray and other radiology testing, and the Comprehensive Breast Center The Beaumont Cancer Center, Renal Center, Vascular Services Center, The Beaumont Heart Center Research Institute

Medical office building, housing physicians' private practices and several other Beaumont services

Background & Overview of Beaumont Hospital


Beaumont Hospital
Education Level 1 Education Institute accredited by the American College of Surgeons. One of the nations largest residency programs School of Allied Health

William Beaumont School of Medicine


Nurse Anesthetist Graduate School

Background & Overview of Beaumont Hospital


Beaumont Hospital
Production Generates $2.1 Billion in revenue

Ranked #1 in number of admissions per year


Ranked #2 in number of Surgeries performed per year 2011 Numbers: 55,700 Admissions, 47,000 surgeries, 117,000 EC visits, 5,000 births, 661,000 outpatient visits ("Learn about us," 2012).

Background & Overview of Beaumont Hospital


Beaumont Hospital
Rankings Ranked Among the nations Best Hospitals 2011-2012.

Ranked as the 3rd Best Hospital within the regionalmetropolitan area.


Nationally ranked in Cardiology & Heart Surgery (32nd), Geriatrics (26th), Orthopedics (33rd), Urology (44th) and more (U.s. best hospitals, 2011).

Directional Strategies

Directional Strategies
Mission: We will provide the highest quality health care services to all of our patients efficiently, effectively and compassionately, regardless of where they live or their financial circumstances. Vision: The health care team at the Beaumont Health System, through innovations and daily improvement, will provide a patient experience that is a national model for exceptional outcomes, high consumer value and caring service, supported by progressive teaching and medical research.

Directional Strategies
Strategies People and Systems: Strengthen position as employer of choice Recruit and retain physicians and align with hospital Leverage information technology Quality and Safety: Improve quality and safety

Service: Improve service to patients Improve service to physicians

Directional Strategies
Strategies Growth: Enhance value (quality/cost) through centers of excellence Strengthen brand awareness and promote programs Financial Performance: Increase revenue and decrease costs Increase philanthropy Education and Research: Strengthen education and research enterprise

External Environmental Analysis

External Environmental Analysis


Analysis of the External Environment
General analyzing from a broad perspective and industry analyzing from a narrow perspective. For this strategic planning project the group selected political and economic factors for the external environment analysis. These two factors will be analyzed by looking at the strength, weaknesses, opportunities and potential threats that exist for each factor.

External Environmental Analysis


General Perspective:
Political Threats Affordable Care Act signed by President Obama (March, 2010) Fragmented Payments Wasted administrative dollars and lost opportunities for improvement in the health care system Government determines which types of organization can grow and exit.

External Environmental Analysis


Industry Perspective:

Political Threats
Governor Snyder signs four lifetime on cash welfare benefits, eligibility for health benefits and food stamps in place for four years Increasing cost of healthcare Department of Justice filed a civil antitrust lawsuit against Blue Cross Blue Shield of Michigan for using their market clout to prevent competing insurers same kind of discounts that it receives Political Opportunities Michigan small business to receive tax credits up to 132,083 dollars

External Environmental Analysis


Economic Opportunities
Uninsured individuals and small business will be able to buy insurance by 2014 at affordable prices Affordable Care Act authorizes a ten percent Medicare payment bonus for physicians who specialize in family medicine, pediatric and geriatric medicine, orthopedic surgery/ medicine and nurse practitioners Creating Primary Care Payment Incentives (ACA) Training new primary caregivers (ACA)

External Environmental Analysis


Political Threats

Some Seniors may lose Medicare benefits due to the Affordable Care Act
Shortage or Healthcare Professionals 47 million American uninsured: Mostly from working individuals without health benefits Healthcare spending will increase by 6.7 percent by 2017 Political Opportunities Obama Care Bill Expanding health care for all children: Universal coverage to make coverage more affordable

External Environmental Analysis


Continued
Prohibit insurance companies from excluding coverage of preexiting conditions for children in Michigan Reduce Michigan Medicare premiums for 1.2 million seniors not enrolled in Medicare Advantage, will not subsidize private insurance plans (Senate Finance Committee) Reduce healthcare cost for 192,000 Michigan retirees who has insurance through former employer and are not yet eligible for Medicare (6/15/2010) ("Affordable care act," 2012).

External Environmental Analysis


Political Opportunities

Medicare picks up tab for annual wellness visits


Increase in healthcare spending may increase funding on new research reducing future cost burden resulting in longevity Economic Threats Global recession Increasing number of malpractice suits against doctors and hospitals Cost of healthcare fraud Bankruptcy nearly 50 percent of all bankruptcies result from medical cost

External Environmental Analysis


General Perspective:
Political Threats Affordable Care Act signed by President Obama (March, 2010) Fragmented Payments Wasted administrative dollars and lost opportunities for improvement in the health care system Government determines which types of organization can grow and exit (Healthcare.gov).

External Environmental Analysis


Economic Threats
Slow recovery from recession Unemployment: 8.8 million people (4/10/2010) One out of every six adult Michiganders and more than one out of five children live in poverty Energy index up: 3.1 percent increase in electricity, gasoline and food

Cost rising more rapidly than revenues causing employers to reduce or eliminate healthcare benefits altogether

External Environmental Analysis


Economy Opportunities
Job growth jumps 3.8 percent first quarter in Michigan (5/2012) Higher ratio of middle income families increase in compensation for care Lower unemployment numbers for residents in Royal Oak, Oakland County and surrounding areas.

Service Area Competitor Analysis SWOT Analysis

Detroit Medical Center


SWOT Analysis

STRENGTHS
Vanguard acquired DMC Investing $850 million into the health care system Building specialty clinics throughout surrounding counties/suburbs. Renovations to existing hospitals: DRH, Harper/Hutzel, Sinai Grace, Huron Valley and Childrens Hospital of Michigan. New Cardiovascular hospital opening in 2013

Detroit Medical Center


SWOT Analysis
STRENGTHS
Located in Detroit 3 of 4 top-level trauma centers in Wayne County: DRH,CHM, and Sinai Grace Diverse mix of employees and patient population Cardio Team One Affiliation with Wayne State University ANCC Magnet Recognition

Detroit Medical Center


SWOT Analysis

STRENGTHS
National sports affiliation: Detroit Tigers, Red Wings, and Pistons. 5 consecutive years of being named to the most WIRED hospital list. 2011 Emergency Medicine excellence award by Healthgrades Selected as a pioneer for ACO Health care systems.

Detroit Medical Center


SWOT Analysis
WEAKNESSES
Lack of marketing measures (traditional and technological) Damaged reputation- location of health care system Staffing and management problems doing more with less and not utilizing human resources well. Lag in technology- end of life equipment Ambulance services and Life Flight Technical and communication problems. Patients being transferred to other local area health care systems.

Detroit Medical Center


SWOT Analysis
OPPORTUNITIES
Purchase of property in Royal Oak for a new urgent care/medical office building. Majority of equipment at end of life. Infusion from Vanguard acquisition could be sooner rather than later. Potential exists for additional employment opportunities. Building of DMC clinic throughout Metro Detroit, Washtenaw, and Oakland counties (Detroit medical center, 2012).

St. John Health System


SWOT Analysis
STRENGTHS
AARP recognition as one of the best employers of workers over 50 Named one of the U.S. News & World Reports best hospitals

Sports center specializing in total joint replacement of the shoulder, hip and knee. Rehabilitation services as offered.
St. John Hospital and medical center recognized as one of the nations top 100 teaching hospitals.

St. John Health System


SWOT Analysis
STRENGTHS St. Johns awarded Blue Cross/Blue Shield distinction for cardiac and hip/knee surgery. Cancer Institute accredited with commendations based on outcomes and early detection. Care pagers allow for web page setup St. Johns Providence Park Health System named one of Metro Detroits Best and Brightest companies to work for by the Michigan Business and Professional Association.

St. John Health System


SWOT Analysis

WEAKNESSES
Lack of affiliation with a medical school Closure of St. Johns Riverview hospital in 2007 casted doubt on systems long term financial viability.
Located in one of the nations poorest cities.

Poor marketing strategies

No childrens hospital within the health care system

St. John Health System


SWOT Analysis

OPPORTUNITIES
Health care reform legislation may position St. John as a buffer in providing a safety net for Detroits poorest citizens. Expansion of its infant mortality project that was established to address the high infant mortality rate in Detroit and Wayne Tap market for Geriatrics in the current aging population

St. Johns Health System


SWOT Analysis
THREATS Detroits high poverty rate (32%) is the highest in the nation; uncompensated care may rise. Cuts in Medicare and Medicaid reimbursements could adversely affect the systems finances. Decline in the quality and access of care. Closing of facilities in poor neighborhoods as well as building facilities in higher income Perception among some hospital workers that the hospital is driven more by profits than by its mission (St. John Providence, 2012).

Henry Ford Hospital


SWOT Analysis
STRENGTHS
Five hospital located throughout Metro Detroit. Honored by the American Group Association for Quality Programs. Good reputation within the communities the hospital serve within. Numerous medical centers and urgent care facilities located throughout Detroit and neighboring counties.

Henry Ford Hospital


SWOT Analysis
STRENGTHS
Ranked 6th nationally in the 50 Exceptional Hospitals reported by Consumers Digest in 2005. More physicians selected as Top Docs than any other hospital in Metro Detroit by Americans Top Doctors. Health Alliance Plan (HAP) pioneered by Henry Ford Hospital One of the nations top hospital for treatment of strokes.

Henry Ford Hospital


SWOT Analysis

WEAKNESSES
Close proximity to other health care systems Aging Detroit facility

No affiliated Childrens Hospital


High number of uninsured patients at certain facilities with the health care system.

Henry Ford Hospital


SWOT Analysis

OPPORTUNITIES
Built a new hospital that is located in West Bloomfield Hills. Building upon its earlier success with adapting an EMR. (Electronic Medical Record). Research and funding has increased. Expansion of health care plan which potentially could generate more customers and revenue.

Henry Ford Hospital


SWOT Analysis
THREATS
Entrants of for-profit ownership forcing competitive challenges for Henry Ford Health system. Ability to protect market position in the event of future financial constraints. Building of new DMC Cardiovascular Hospital Consumer decision choices may be altered by the increase in publicly available information (Henry ford health, 2012).

Point of Service Orthopedics

Point of Service Orthopedics

Organizational Structure

Organizational Structure

Organizational Structure

Strategic Formulation and Evaluation

Strategic Formulation & Implementation


Overview
Orthopedics WBH has a dedicated wing with 16 state of the art operating suites which includes a dedicated physical therapy and occupational therapy unity (Beaumont Health System, 2012) as well. Expand orthopedics by building a hospital specific to just orthopedic services.

Adaptive Strategy
Selected strategy: Market development through expanding geographically.

To support the adaptive strategy that was selected, the group utilized the TOWS, BCG, and SPACE matrix/analysis.

TOWS analysis for wbh and adaptive strategy selected


External Opportunity External Opportunity

External Threat

4 Survival Quadrant

* External threats exist but internal strengths are greater.

Adapted from Heinz Weihrich, The TOWS Matrix: A Tool for Situational Analysis, Long Range Planning 15, no. 2 (1982), p. 60. Reprinted by permission of Elsevier Science Ltd., The Boulevard, Langford Lane, Kidlington OS5 1 GB, UK.

BCG Analysis for WBH and Adaptive strategy selected


High Medium Low

Stars Medium

Problem Child

Cash Cows

Dogs

Low

What does this analysis mean? Long-run opportunity for growth and profitability. Market Development strategy is appropriate for this quadrant.

Adapted from Gary McCain, Black Holes, Cash Pigs, and Other Hospital Portfolio Analysis Problems, Journal of Health Care Marketing 7, no. 2 (June 1987), p. 58. Reprinted by permission of the publisher, the American Marketing Association.

Space analysis and wbh


Financial Strength 6 Conservative
5 4 3 2 1

Aggressive

Competitive Advantage

-6

-5

-4

-3

-2

-1

-1
-2

Service Category Strength

Defensive

-3 -4

Competitive

-5
-6

Environmental Stability
Adapted from Alan J. Rowe, Richard O. Mason, Karl E. Dickel, and Neil H. Snyder, Strategic Management: A Methodological Approach, 4th edn (Reading, MA: Addison-Wesley Publishing, 1994), pp.145-150. Reprinted by permission of Pearson Education Inc., Upper Saddle River, N.J.

Market Entry Strategy


Internal Development
External Conditions Other health care systems expanding services outside of the hospital communities currently in. Health care systems focusing on other specific services and not orthopedics. Internal Resources

Technology, financial stability, employee knowledge, innovative health care system, and reputation.
Competencies Recognized world wide for joint and implant library Medical school that trains future WBH physicians/surgeons Graduate Nurse Anesthesia program School of Radiography that offers additional training to future WBH employees.

Market Entry Strategy


Internal Development
Capabilities WBH offers opportunities for employees to become specialized in different services (retaining and motivating staff). Recent year- 360 Beaumont doctors were mentioned for the Top Doc Award by Hour Detroit (Beaumont Health System, 2012). 2011-2012- Best Hospital from U.S. News and World Report Organizational Goals

Focused around retaining employees and providing the best patient care regardless of financial status
Standards: Service, Ownership, Attitude, Respect

Strategic Posture
External Conditions Other health care systems expanding services outside of the hospital communities currently in. Health care systems focusing on other specific services and not orthopedics Internal Resources Technology, financial stability, employee knowledge, innovative health care system, and reputation. Competencies Minimally invasive orthopedic surgeries (less recovery time). Joint and Implant library Training of future physicians/surgeons, nurses and other staff specific to the orthopedic service. Capabilities Offering training of employees to become specialized in orthopedic services.

Strategic Posture
Focused differentiation was selected for WBH strategy formulation in terms of strategic position. While the age range is still pediatric to senior citizen, the focus will be specifically to having a separate WBH whose services are only orthopedics (surgery, rehabilitation, physical therapy, etc.).

Strategic Posture
External Conditions

Other health care systems entering into this specific medical service.
Competitors entering into other services. Internal Resources State of the art technology, financial stability, employee knowledge, innovation, and reputation of WBH.

Strategic Posture
Competencies

Recognized worldwide for its implant library.


Medical school that trains future WBH physicians/surgeons. Graduate Nurse Anesthesia program School of Radiography that offers additional training to future WBH employees.

Capabilities

WBH offers opportunities for employees to become specialized in orthopedic services (retaining and motivating staff).
Recent year- 360 Beaumont doctors were mentioned for the Top Doc Award by Hour Detroit (Beaumont Health System, 2012).

Summary & Conclusion

Summary & Conclusion


Growth
Finances Industry Stance

Future

References
Affordable care act in your state: Michigan. (2012). Retrieved from http://www.healthcare.gov/law/ resources/mi.html
Detroit medical center. (2012). Retrieved from http:// www.dmc.org/

Healthcare.gov. (n.d.). Retrieved from http:// www.healthcare.gov


Henry ford health system webpage. (2012). Retrieved from http://www.henryford.com/ Learn about us. (2012). Retrieved from http:// www.beaumont.edu/

References
continued
St john providence health system. (2012). Retrieved from http://www.stjohnprovidence.org/default.aspx
U.s. best hospitals 2011-2012. (2011). Retrieved from http://health.usnews.com/besthospitals/beaumonthospital-

Questions