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Internal Audit and External Analysis of a Health Care Organization
HCA 470
Professor Klense
7/31/2020
Lauryn Tyzbir, Anthony Abrego, Stefanie Williams
Dignity Health
Dignity Health Medical centers have a long history of giving care to those in need.
Dating all the way back to 1854, there were eight nuns that came together in San Francisco that vowed to care for those in their city
Then in 1986 they decided to merge two separate congregations together, and Dignity Health was born. They used the word dignity to convey an overall respect for everyone’s well-being and health.
They formed a medical facility called St. Mary’s Hospital which is still in operation today. This is the oldest running hospital in San Francisco and has treated those who contracted typhoid, influenza, and cholera.
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Mission and Vision Statement
“As CommonSpirit Health, we make the healing presence of God known in our world by improving the health of the people we serve, especially those who are vulnerable, while we advance social justice for all. A healthier future for all, inspired by faith, driven by innovation and powered by our humanity” (Dignity Health, n.d.).
At Dignity Health Medical Centers their mission shows where they started and what they want to do in the future. Dignity Health facilities strive to promote innovation, compassion, patient-centered care, teamwork, and have a faith-based practice. Dignity Health uses their faith and morals to grow and shape their mission, vision, and values.
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Locations and Scope of Services
Dignity Health facilities has been around for a long time and have stayed true to the original purpose from 1854. Since their mission, vision, and values are so strong they were able to grow from a single facility to 400 care sites, 39 of which are hospitals, and they now span across 22 different states.
Staying true to their faith, patients, employees, and community they have been able to become one of the largest healthcare organizations in the nation. The strength in their mission, vision, and values helped them to plan for the growth that they were able to achieve successfully.
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Scope of Services
Cardiology
Emergency
Neurological Conditions
Orthopedics
Oncology
Women’s Services
They have over 100 different services and treatments that they offer at their facilities. They range from general physical care with outpatient facilities to in patient treatments and surgeries.
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Financial Performance and Condition
In 2012 their overall net income was around $132.5 million. This was lower than the previous fiscal year in 2011. Now “their revenue fell nearly 7% to $6.7 billion in the six months ended Dec. 31, compared with $7.2 billion in the prior-year period. The system's expenses were $6.7 billion in the 2018 period and $6.9 billion in the prior-year period. Dignity generated $13 million in operating income in the latter half of 2018, down 96% from $338 million in the prior-year period” (Bannow, 2019).
“Salaries, wages and benefits represented 52.1% of Dignity's net patient and premium revenue in the 2018 period, compared with 49.5% in the prior-year period” (Bannow, 2019).
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Major Resources and Competencies
Dignity Health has many resources that both staff and their patients that are tangible: financial, organizational, technological, and physical. They are also intangible: human, creative, and perpetual.
Their core competencies are patient care and procedural skills, medical knowledge, practice-based learning and improvement, system-based practice, professionalism, and interpersonal skills and communication.
They take pride in making sure that their facilities provide top quality care for an affordable cost to their patients. They focus on education for their staff so they can grow and be the best they can be.
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Internal Value Chain
Suppliers (Physicians)
Marketing and Promotion
ER, Admitting, and Patient Intake
Tests, Diagnosis, Treatment, and Referral
Discharge Planning and Short-Term Stay
Referral and Follow-Up
CUSTOMERS (Patients, Payers, Employers)
Clinical, Financial, and Management Information Systems (EMR, CPOE)
(Moseley, 2018)
Financial Management, Payer Contracting, Billing
Governance, Stakeholder, and Public Relations
Medical Research, Medical Student Training
Legal, Compliance, Patient Advocacy, Patient Satisfaction
Facilities, Security, Maintenance, Housekeeping
Human Resource Management, Medical Staff Relations, Nurse Recruiting
Risk Management, Case Management, Quality Assurance
“In analyzing its own value chain, a firm is looking for the points at which the most cost is incurred and the most value added. Every activity does both to some degree. No activities are free and, if they are not contributing (directly or indi-rectly) to product or service values, they should not be part of the value chain. The purpose of the analysis is to find opportunities for reducing costs or adding more value—in ways that the competi-tion cannot easily copy. It is possible to describe a methodology for accomplishing this” (Moseley, 2018).
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Political and Government
Dignity health has consistently proven that it is full of compassionate caregivers that are willing to go above and beyond for their patients and other staff.
Dignity prides itself on aligning its vision and mission with the most updated health care laws in order to be compliant when doing research and delivering quality care.
“Visioning, strategic planning, budgeting and capital decisions are made consistent with the organization’s mission and core values and reflect values based discernment to assure such alignment” (Dignity Health, n.d.).
Dignity Health has thousands of compassionate caregivers that work day in and out to try and do the best they can for their patients.
Dignity respects and upholds all of the different health care regulations that are said to make for a better healthcare organization.
The vision and planning that is created is aligned with all of the different views an organization has in order to stay true to their mission.
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Political and Government Continued…
Dignity Health takes pride in ensuring that their patients privacy is respected and a number one priority.
Dignity Health tries its best to keep all patient files private by having a dedicated team that works to keep files and security imbedded.
Health Insurance Portability Accountability Act (HIPAA) is held to the highest regard at dignity health because patient information should never be disclosed with anyone but the patient unless they give written permission.
Patients that give their permission can also have their illness put into a research, but Dignity Health does not do anything that would push them towards being uncompliant.
It is safe to say that Dignity Health has aligned its Catholic values with the health care regulations that are put out in order to stay at their best.
Dignity follows different health care regulations to ensure that the privacy of their patients is always protected.
Having a team that looks into encrypting messages is important to avoid security breaches.
HIPAA is an important part of any organization because security breaches result in loss of patient trust and law suits.
Patients can allow for other people to know their diagnosis if they give written approval, but all information must be kept private until that document is signed.
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Legal
Laws , regulations, and decisions made in the courtroom can definitely have a heavy effect on the way that health care organizations run their business because failure to comply with these different standards can lead to law suits, loss of reimbursements for being non-compliant, and sometimes jail depending on the severity of the case.
This means that organizations like Dignity Health have to make sure that they are doing everything possible to stay compliant.
Law suits can way heavily on an organizations ability to deliver the care the want because it is a huge loss in revenue from gaining a bad reputation and that can be despite having malpractice insurance.
Loss in reimbursements make it difficult for hospitals to stay a float because a huge part of revenue comes from Medical/Medicaid payments.
“The Dignity Health compliance function promotes the prevention, detection, and resolution of actions that do not conform to ethical, legal, policy, or dignity health standards. This responsibility includes the obligation to develop policies and procedures that provide employees guidance, the creation of incentives to promote employee compliance, the development of plans to improve or sustain compliance” (Dignity Health, n.d.).
There are many different regulatory factors that effect the way that an organization carries itself because failing to be compliant can be much more devastating then putting in the effort needed to be compliant.
Dignity Health has to ensure that the plans and policies they make are aligned with each health care regulation if they want to avoid being in trouble.
Law suits can really take a huge amount of money away from future plans and can sometimes cause facilities to shut down if the offense is really bad.
Health care organizations can have their accreditation taken away when they have constant legal violations because they become a liability, so non-profit organizations really have to be able to keep up their standards if they hope to stay open.
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Professional and Industry
There are many different views on the way that a health care organization should be ran, but ultimately that decision is left up to the board of directors and all other stakeholders directly involved in the care process.
Dignity has aligned itself to follow many of the views that have already been set forth, but they would like to consider themselves as an organization that is willing to go above and beyond to deliver the highest quality care possible.
Dignity Health is very well respected because they are one of the biggest non-profit organizations, but they are still constantly watched by different trade organizations.
Different industry organizations such as the American Hospital Association (AHA) and The Joint Commission watch over the way that hospitals are run.
However, professional organizations would be the Association of Perioperative Registered Nurses (AORN) and National Board of Surgical Technologists and Surgical Assisting (NBSTSA) who monitor over different caregivers in the respective field.
Everyone has a different opinion on the way that health care should be handled and the idea of how a facility should operate, but there are few stakeholders that ultimately make the final decision.
Dignity Health has aligned its views in order to coincide with its beliefs, but they also have to model themselves after the different professional and trade organizations that regulate different parts of health care.
Some huge trade organizations that watch over that watch over dignity Health are The Joint commission and the American Hospital association that monitor the way hospitals are run and give the say if a facility is certified by them.
Professional organizations are just as important as trade organizations because they dive in further to the education of caregivers in their specialties.
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Economic
Dignity Health prides itself on being a place where everyone can go to in their time of need.
Dignity Health has many plans set in place in order to offer assistance to the poor and underserved.
“Dignity Health is dedicated to making a positive impact on the social determinants of health, particularly on the health of those economically-disadvantaged communities served by Dignity Health hospitals, but also nation-wide and world-wide. Dignity Health investments are to be used by nonprofit organizations for community development programs benefiting under-served (Dignity Health, n.d.).
Dignity has been known for years as a place where patients can go an receive care without question.
Dignity Health is a non-profit that still organizes ways to assist the poor and underserved populations.
Making a positive impact on poorer communities is one of the major points that Dignity Health stresses.
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Demographics
Dignity Health has made it their mission to take care of all different members in the community despite their financial status.
“Dignity Health, One of the nation’s largest non-profit health care systems, is a multi-state network of 10,000 physicians, more than 60,000 employees, 40 acute care hospitals and 400-plus care-centers, including neighborhood hospitals, urgent care, surgery and imaging centers, home health, and primary care clinics. Headquartered In San Francisco, Dignity Health is dedicated to providing compassionate, high-quality and affordable patient-centered care with special attention to those who are poor and underserved” (Dignity Health, n.d., p. 5).
Their constant drive to take care of their patients and caregivers has helped Dignity Health to grow and an exponential rate.
Dignity Health has a large demographic of patients and caregivers because they are a health care to rganization hat prides itself on being diverse.
Dignity has over 40 hospitals and more than 400 plus care centers, and that makes them one of the biggest non-profit organizations in the world.
Dignity is in over 20 states due to their consistency in taking care of patients and getting good outcomes.
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Sociocultural
Dignity Health has always prided itself on taking on all of the different problems a community faces without withholding care from anyone who may need it regardless of their socioeconomic status.
This means that peoples lifestyle choices do not affect the quality of care that people will receive if they go to a Dignity facility.
Dignity Health is a an organization that will always pride itself on having a diverse staff and taking care of different communities across the nation.
It is safe to say that everyone that visits dignity will be treated with kindness, compassion, and love.
Caregivers and Dignity are shown to be compassionate to one another, and their Christian values make it impossible for them to turn away anyone in need.
Patients can have their own set of views, worship who they want, and may even be criminals in need of assistance, and that does not matter one bit to the quality of care a patient will receive from the hardworking caregivers Dignity employs.
The communities that surround Dignity health facilities must feel lucky because each facility tries to fix the problems that plague its patients.
There is no way that Dignity will deny patients from care, and that means that sometimes it may be individuals who are criminal or deviants.
Everyone that visits a Dignity facility will be treated fair regardless of their background, and that makes Dignity a really special organization.
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Technology
Technology in the health care realm is constantly changing and being updated to stay on top of the newest and most efficient ways of delivering care.
Most hospitals spend millions each year to try and gain a competitive advantage over the competition, and Dignity Health is committed to trying to deliver the best care with leading edge equipment.
Dignity Health is utilizing different methods to be able to translate information for patients with different native languages.
During these trying times Dignity Health has launched a virtual care, so that patients can receive the care they need without being exposed to Covid-19.
“By making use of new medical technology, physicians have a means of improving the patient experience by increasing direct care, reminding patients of upcoming appointments, and engaging with patients in the comfort of their homes” (Dignity Health, 2016).
Anyone who works in health care will tell you that technology is constantly changing, and that means that health care organizations have to be on the look out for the newest tech that could give them a leading edge in care.
Dignity Health is no stranger when it comes to having the best equipment because they deal with a multitude of different specialties.
Dignity is making a huge effort to utilize different methods of communication via telemedicine, and they recently launched a virtual care anywhere app that allows patients to talk to a caregiver at the click of a button.
Health care organizations have to make a conscious effort to stay on top of their networks because talking to patients from virtually anywhere can leave room for cyber attacks.
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Market Segmentation
Dignity Health applies the concept of healthcare segmentation to entire market by serving diverse population.
The company’s marketing strategies focus on different variables like age, gender, demographic and income to structure its services.
The institution understands the effect of issues such as lifestyle as an element of healthcare.
In terms of its financing strategies, the hospital has different payment models that suits different people.
The hospital segments its market highly based on demographic.
In healthcare, it is imperative that you are prepared to market to, and serve a diverse population of customers. When considering your audience and looking into their marketing strategies, Dignity Health focuses on variables such as age and gender.
Dignity Healthcare takes into consideration the possible effects of geographic location and also lifestyle elements. These variables can effect the ability to seek medical care due to lack of transportation, and inability to afford the care. Dignity Healthcare takes this into consideration when developing financial strategies.
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National Segments
National segmentation strategy is common to many health care facilities globally.
Dignity Health has nationalized service line segmentation to offer services to many clients in different states within the US. healthcare market.
The model has enabled the company to identify its potential customers nationally.
It develops its strategy from its national propensity data.
A strategy not only utilized at Dignity Health, National segmentation is a common practice among health care organizations around the globe. Using national propensity data, Dignity Health develops strategies to offer health care to clients across the United States.
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Segmentation by Service Line
This model clusters patients based on their unique characteristics.
Dignity Health care uses service to offer its services to clients based on their lifestyle.
The company uses different payment models that fit customer’s income to develop payment schemes.
The approach help the company to analyze its service line level.
The approach also help in tailoring effective marketing communication.
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Segmentation Based on Healthcare Goals
It entails deciding on offering services to type payers or churn risk clients.
Churn payers help to finance mission or specific goals of the business.
Churn risk help the company to acquire clients, thus gaining larger market share.
It creates an opportunity for the company grow.
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Five Force Analysis
Competitive rivalry is very high in the US healthcare market.
Competition is caused by the increased reported margin by healthcare institutions, thus attracting many firms.
High switching cost also contributes to high profit margin.
Buyers hold weaker bargaining power, thus making them to pay high prices.
Customers are inclined to taking life insurance.
The industry tries to create value for the price paid, hence forcing Dignity Health to prioritize quality service over prices.
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Continued…
Bargaining power of suppliers is very high in the healthcare industry.
Suppliers are fewer as compared to buyers in the market, hence pushing the demand.
Demand increases despite increasing in in healthcare cost because government and individual clients are concerned about health and quality of life.
There is other options or substitutions in the market.
Customers prefer cheaper prescription medicine.
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Continued…
Customers are adapting to “do it yourself strategy,” thus affecting the scales.
The threat of entry of new companies is comparatively low.
Entry to market is inhibited by the high cost and expertise required to establish healthcare facility.
Dignity Healthcare aims at attaining its sustainability by developing policies that focus on reducing cost.
Therefore, Dignity Healthcare still positions itself as one of the prestigious and quality service providers in the industry.
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References
Bannow, T. (2019, February 20). Dignity Health saw rocky end to 2018 as revenue and investments tumble. Modern
Healthcare. https://www.modernhealthcare.com/article/20190220/NEWS/190229994/dignity-health-saw-rocky- end-to-2018-as-revenue- and-investments-tumble.
Dignity Health, D. (n.d.). Dignity. Dignity Health | Culture.https://dignityphysiciancareers.org/careers/Culture/.
Dignity Health. (n.d.). In Service to Our Common Home. Retrieved from https://www.dignityhealth.org/home/about-us/community-health/
-/media/A84A05870C5443EF86FE04B695A88291.ashxIn Service to Our Common Home
Dignity Health. (n.d.). Our History: Rooted in Kindness. Dignity Health. https://www.dignityhealth.org/about
-us/our-organization/mission-vision-and-values.
Dignity Health. (n.d.). Our Mission Integration Standards + Indicators. Retrieved from https://www.dignityhealth.org/north-
state/-/media/cm/media/documents/PDFs/Statement-of-Common-Values.ashx
Dignity Health. (n.d.). Updated FY15 Dignity Health General Compliance Education for Providers Module 2. Retrieved from
Annual Compliance Education - Dignity Healthwww.dignityhealth.org›Service Areas›bayarea
Dignity Health. (2016). Using New Medical Technology to Improve the Patient Experience. Retrieved from
https://www.dignityhealth.org/articles/using-new-medical-technology-to-improve-the-patient-experience
Moseley, G. B., III. (2018). Managing health care business strategy (2nd ed.). Burlington, MA: Jones and Bartlett
Learning. ISBN-13: 9781284081107 https://www.gcumedia.com/digital-resources/jones-and-bartlett/2017/managing-health-care-business- strategy_2e.php