Strategic Management in healthcare services

Critically reflect on the purpose

and

challenges

Management

for

services

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of

Strategic

health

care

Strategic Management in healthcare services

Table of Contents
1. INTRODUCTION....................................................................................................... 2
2. PURPOSE OF STRATEGIC MANAGEMENT IN HEALTHCARE SERVICES.......................2
3. CHALLENGES OF STRATEGIC MANAGEMENT IN HEALTHCARE.................................3
4. RECOMMENDATIONS............................................................................................... 5
5. CONCLUSIONS........................................................................................................ 6
6. REFERENCES.......................................................................................................... 6

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Strategic Management in healthcare services

1. INTRODUCTION

Managers in the health care industries should make appropriate decision

using collected data. Managers are in position to decide how to organize and
direct other peoples and also know how to control the functions within the
system. Apart from that, the health care managers must help others in order
to make their own decisions. The decision making is the act of selecting the
course of actions from among themselves, which can be stressful task in
todays complex and dynamic health care organizations. The managers have
chance to reduce their stress by understanding how to deal with the right
decision making and also how to avoid the common errors which leads to
poor decisions.
This assignment starts with providing a clear definition for strategic
management, along with projecting the importance of implementing
strategic management in healthcare organisations. This document provides a
clear picture about the differences between the various strategic choices for
dynamic healthcare. The various issues and challenges in the strategic
management for healthcare have been addressed in this assignment. Finally
clear recommendations are provided in terms of strategic actions.

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2. PURPOSE OF STRATEGIC MANAGEMENT IN HEALTHCARE
SERVICES

According to Hunger & Wheelen (2007), Strategic management process aids

health care organization in improving their efficiency. Strategic management
process creates an ambience for a company to upgrade its standard. The
process helps a company to identify its current and future status if the
changes are not implemented and provides necessary actions to be taken. A
strategic management should be able to evaluate the actions and inactions
and facilitate the development of performance and success. It should be able
to withstand the eternal changes in the environment because changes are
usual in health care settings according to Swayne, Duncan, & Ginter (2008).
Managers and leaders are necessary for every thriving organization to
foresee the swift changes. This strategic management skill helps to surpass
the obstacles and paves the way to success. According to Swayne, Duncan,
and Ginter (2008), leaders of healthcare should be ready face the changes
and also find an alternative to combat the problems.
The strategic management process has great influence in making crucial
decisions and financial performance. Hunger and Wheelen (2007) express
that organizations that have implemented strategic management performed
better than those who did not. The process itself is important than the
outcome produced it. The strategic management based companies are able
to tackle the changes effectively. Small companies may meet informally and
irregularly, and the planning may only include the president and a select few
managers. The process may be rapid and absolute. In case of big
organizations, adequate man power and time period are required and
problems need to be streamlined efficiently. Companies with strategic
management respond to changes easily.

The environment includes

competition, changing legislation, or changes in market. Much of strategy

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development is stabile, but there are irregularly appearing periods of change.
Hunger and Wheelen (2007) address the changes in environment as
triggering events.

Strategic management has various benefits for the improvement of the

process and quality in the health care industry; there are several other
purposes of implementing a strategic management in healthcare services. It
is very crucial for the development and the improvement of the current
processes followed in the organisation. Strategic management starts with
identifying and addressing the current strategies of the business, along with
a critical analysis of business in the context of internal and external
environment. Business analysis involves SWOT and PESTLE, this allows the
organisation understand what they are doing and where they are in the
business. This provides a clear understanding to the business, also there are
two effective process involved in strategic management namely strategic
planning and strategic management itself. The major purpose of the
strategic management is to position the healthcare organisation through the
external and internal analysis. Strategic management adds value to the
health care service delivery in terms of quality and speed of service.
It has a very good impact on the healthcare indicators, along with the
sustainability of the organisation. This improves the efficiency of the
business and improves the quality management. The financial and decision
making process in the health care industry will be improved through the
effective implementation of strategic management in the organisation. In the
competitive industry when we consider the private health care organisation,
it acts as a competitive advantage to the company.

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3.

CHALLENGES

OF

STRATEGIC

MANAGEMENT

IN

HEALTHCARE

An annual survey by the American College of Healthcare Executives (ACHE)

found from 1,100 hospital CEOs, 77% identified financial challenges as a
major issue. This has been followed by patient safety and quality according
to 43 % of respondents and care for the insecured according to 41%
respondents. When enquired about the

specific concerns faced by their

hospitals in the case of patient safety and quality, redesigning care

processes and redesigning the work environment to reduce errors both
received 66%, compliance with accrediting organizations got 60%, and
medication errors was identified by 57% of respondents.

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These strategic challenges explains why healthcare organizations now

account for roughly half of all Baldrige applications despite being one of six
categories: Financial challenges, which are exacerbated by caring for the
uninsured, are forcing hospitals to be as efficient as possible while still
providing safe, high-quality patient care.
The Baldrige model helps to face all the problems by understanding the
management systems and their places where improvement is required and
makes them achieve changes rapidly.
The economy is considered as one of the major challenges for the healthcare
industry as the policies are tend to change continuously and there will be a
constant problem in all health care services and it affects the efficiency and
deprives productivity.
Quality may be considered to be improving in the recent time, but there is a
huge expectation and demand from the customers in terms of quality and
speed service. This demands health care organisations to utilize the best
methodologies and processes to effectively satisfy the needs of the
customers.
In health care organisation, there is a huge need for efficiency; new payment
models are considered to be crucial for the health care improvements and
resource utilizations.
The strategic management involves effective use of tools and technologies in order
to improve the overall processes of the organisation. The processes that involve
spreadsheet could be replaced with the most advanced tools for better performance
and productivity.
The current health care systems face a huge challenge that the future of the
healthcare in terms of its spending trajectory is not sustainable.

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Pace of Quality improvement (AHRQ 2008)

4. RECOMMENDATIONS

Following

are

the

recommendations

for

the

implementation

of

strategic

management in the health care industry. The most important recommendation is to

deploy effective processes based on the strengths of the organisation along with
considering the challenges in the organisation. It is very important to overcome the
weakness in the organisation. SWOT analysis plays a vital role in understand the
business and gives a clear understanding about the process.
Implement Qualtiy management systems such as six sigma and lean will improve
the overall quality of the organisation. This acts a competitive advantage to the
business. It is also recommended to use the financial decision making process.
Making and deploying decisions is considered as the central functions of
management and where the health care managers need to concentrates their
efforts. In order to facilitate good decision making, the managers must need to rely
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on mathematical and statistical tools of the management science. Implementing
proper decision, the influence, leadership, corporate strategy and other important
peoples skills are come into play. The following are the plan of actions which
improves the chance of making successful decision making and also in order
overcome the challenges in the strategic management:
Identify the problem and its nature
Specification of organizational objectives & decision criteria
Development of alternatives
Compare and analyze the alternatives
Choose the best alternative
Implementation of the choice
Monitoring and controlling the results.
Identify the nature of the
problem
Specification of objectives

Development of alternatives

Compare and analyze the

alternative
Choose the best alternative

Implementation process

Monitoring and controlling the

result

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Identifying the problem correctly is the most vital part of the process. It is often said
that the well-defined problems are half solved. The improper identification of
problem will leads all other steps to be misdirected. The health care managers
should identify the criteria in which the solution can be formulated. The important
criteria include company image, risk, profits, costs, return on investment, impact on
demand and increased productivity. The chances of identifying the proper solution
to the problem increases when the appropriate alternatives are developed. It is
difficult for the managers to investigate and recognize all possible outcome of
complex interrelationship which are influenced by the decision. Compiling the
realistic suitable alternatives depend on health care managers skills, nature of
situation and level of experiences.
Comparing and analyzing the alternatives usually facilitated by the computer
program which gives the skilled & knowledgeable health care manager in order to
handle the statistical and mathematical tools. Choosing the best alternatives is
completely depend on the objectives by decision maker and the criteria for
evaluating alternatives that offered by mathematical model. Then implementations
of selecting alternative choice are taken place. Effective decision making always
require monitoring the result of decision to ensure that they take place as desired. If
not, the manager needs to choose to repeat the entire process. If the investigations
uncover an error or the false assumption made by the manager, result in affecting
the entire process.

5. CONCLUSIONS

This report provides a clear description about strategic management in the context
of health care services; this report also describes the importance and purpose of
strategic management in healthcare industry. The various challenges and issues in
the strategic management on healthcare organisations are addressed, some of the
most important challenges are the need of quality improvement, sustainable
development,

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and

need

for

efficiency.

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Finally

this

report

provides

clear

Strategic Management in healthcare services

recommendations in terms of decision making to cope up with the challenges in the
healthcare industry.

6. REFERENCES
Preker, A. (2006) Strategic Management of Clinical Services. New York: Auflage
Blair,

J.

(1989) A

Strategic

Approach

for

Negotiating

with

Hospital

Stakeholders. Health Care Management Review 14, (1) p13-23

Debrock, L. (1986) Competition and Market Failure in the Hospital Industry. Medical
Care Review 43, (10) p253-292
Devitt, R. (2005) Strategic Management System in a Healthcare Setting Moving
from Strategy to Results. PubMed 8, (4) p58-65
http://info.hayesmanagement.com/Portals/19712/docs/hayes%20white
%20paper_7%20steps%20to%20healthcare%20strategic%20planning.pdf
Moseley, G. (2010) Managing Health Care Business Strategy . Sudbury: Jones and
Bartlett Publishers

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