Strategic planning in hospitals

GD Kunders

Hospital planning has come of age and is today widely recognised as a critical management tool in positioning the hospital for the future. In today’s highly competitive and volatile world, organisations operate in uncertain environments, some of them in greater uncertainties than others. And compounding the leader’s problem are the many forces that are beyond his control. If the organisation is to succeed in this environment and wishes to see itself where it wants to be, say, five or ten years hence, the leader must beyond all question accord high priority to planning. Successful planning is the key to finding and acting on opportunities within external constraints and uncertainties that stare many of our hospitals in the face today.

Evolution of Planning

Hospital planning has, by and large, proceeded through the following three evolutionary stages:

Stage 1. Facilities Planning: More commonly known as bricks-and-mortar planning, facility planning was heavily oriented towards design and construction of physical facilities. The major emphasis during this stage was on the replacement or expansion of physical facilities. The focus on expansion of physical facilities was dictated by the growth of hospitals in every direction coupled with capacity shortages, technological and medical advances. Architects and engineers were the major players in facilities planning.

Stage 2. Institutional Planning: In this stage, focus of planning shifted to the planning of programmes and departments of the hospital. This shift was characterised by the expansion of existing programmes on one hand and exploring new types of healthcare services on the other besides setting annual and long-term objectives for them. As a matter of necessity, budgeting was tied to these objectives. Many hospitals established a department of planning and created the position of Director of Planning to coordinate and carry out the functions of planning.

Stage 3. Strategic Planning: This is characterised by the ongoing and systematic use of planning as a top management tool to set short and long term goals of the hospital and to attain them in order to best position the hospital.

What is Strategic Planning?

Every organisation has a mission or purpose, which is what it aims to accomplish. Strategic planning is the process of defining the primary objectives of the organisation and determining a course of action or devising a strategy to achieve those objectives. It consists of a clearly stated mission, a long-term vision which is what the organisation wants to be (What is our business? What should it be?) and an integrated approach to move the organisation toward accomplishing it. Only when organisations realise that nothing that they have ever done before will be good enough to successfully meet the challenges of tomorrow and only when they view those challenges as opportunities rather than threats or obstacles and then transfer “a bold strategic vision into a set of concrete actions” will they have an assured future. “We must begin to define our destiny rather than react to our past,” said Mario Pasquale, Jr. It is clear, therefore, that strategic planning is not projecting the present into the future, nor is it prescribing yesterday’s tactics for tomorrow.

Elements of Strategic Planning

Strategic planning must rely on increasing emphasis on environmental assessment and forecasting, that is, answer to the question. What will the future technological, economical, legal and regulatory environment be? Equally important are the development and or refinement of the organisation’s mission and objectives as well as financial and diversification planning. Ability to attain goals and maintain good relations between the governance and top management team is absolutely imperative. A deep rooted reorientation in thinking throughout the organisation toward strategic management is critical to the success of strategic planning, so also the understanding and an unflinching commitment of the chief executive, top management team and the medical staff to the programme.

High Cost of not Planning

Organisations can neglect strategic planning at their peril. Sadly, with a few noteworthy exceptions, most hospitals fail to go beyond the second stage, and are, as one planning expert puts it, “currently tottering between the second and the third generation of hospital planning.” Some of our hospitals of other times, which fit this description, are a case in point. In bygone days, they catered admirably to past disease patterns or to the specific needs of certain segments of the population. They would not have found themselves in the throes of struggling for survival had they, among other things, redefined their mission, objectives and long-term goals, and worked out a strategy to attain these goals.

For example, they could have broadened their mission to provide services more appropriate to today’s healthcare needs. Business ventures have long woken up to this reality and have gone the way of modernising, specialising and diversifying, which represent the outputs of strategic planning. It is not that these hospitals do not have a stated mission or objectives. They are there in bold, clear language. But having outlived their usefulness they have become irrelevant to today’s totally changed situation. What is now needed is a bold action to alter them to meet the challenges of the present day.

Building on Organisation’s Strengths

Organisations succeed only when they discover their distinct competencies and build on them. This is an integral part of the strategic planning process. For this they need to evaluate their strengths and weaknesses and use them as the basis for setting goals. Peter Drucker, the renowned management guru, stresses two traits that are necessary for an effective leader and a successful organisation: Building on the organisation’s strengths and concentrating on few major areas in which superior performance will yield outstanding results. Says Mara Minerva Melum, “If your hospital is going to stand out in the crowd and to position itself to provide the services that are most appropriate, you first need to recognise your hospital’s unique strengths and to focus your planning efforts on building on them.” What in effect this means is that hospitals must get rid of the idea that they are all things unto all people. The key to future success through strategic planning is found in the leadership’s ability to do more with less and to find opportunities within the constraints of the hospital’s uncertain environment.

The writer is a management consultant and author. E-mail: gdk@vsnl.net