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Learning Objectives

C H A P T E R 4

STRATEGIC PLANNING AND SWOT ANALYSIS

After you have studied this chapter, you should be able to

➤➤ demonstrate➤the➤ability➤to➤integrate➤the➤various➤disciplines➤into➤a➤comprehensive➤

framework➤to➤assess➤healthcare➤strategic➤planning➤problems;

➤➤ exercise➤strong➤individual➤managerial➤problem-solving➤skills➤through➤the➤use➤of➤SWOT➤

analysis;

➤➤ formulate➤strategy➤and➤implement➤change➤through➤the➤use➤of➤gap➤analysis➤and➤force➤field➤

analysis;➤and

➤➤ discuss➤multidisciplinary➤teamwork➤required➤within➤organizations➤that➤allows➤leaders➤and➤

individual➤team➤members➤to➤efficiently➤implement➤change.

I skate where the puck is going to be, not where it has been.

—Wayne Gretzky

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EBSCO : eBook Collection (EBSCOhost) - printed on 4/30/2019 4:22 PM via WESTERN KENTUCKY UNIV AN: 1843079 ; Harrison, Jeffrey P..; Essentials of Strategic Planning in Healthcare Account: s8993066.main.ehost

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IntroductIon Healthcare organizations must continually make adjustments to maintain optimal func- tion. The high rate of change in healthcare is shortening the strategic planning window for healthcare organizations that are adapting to healthcare reform (Zuckerman 2014). Leading organizations believe strategic planning is more important than ever and focus on allocating resources for the short and long term, integrating geographically separated organizations, and developing a team that can focus on a clear strategy. As a result, strategic planning is evolving into a more continuous and integrated process. A number of different techniques can be used to determine where adjustments need to be made. One essential technique involves a discussion of an organization’s strengths, weaknesses, opportunities, and threats, commonly called SWOT analysis. SWOT analysis has been used extensively in other industries but has not yet been widely used in healthcare (Makos 2014).

Prior to strategic planning, a panel of experts who can assess the organization from a critical perspective perform a SWOT analysis. This panel could comprise senior lead- ers, board members, employees, medical staff, patients, community leaders, and technical experts. Panel members base their assessment on utilization rates, outcome measures, patient satisfaction statistics, organizational performance measures, and financial status. While based on data and facts, the conclusions drawn from SWOT analysis are the expert opinion of the panel.

The annual strategic planning process should incorporate strategic planning, action planning, and operational oversight into an ongoing cycle (Zuckerman 2014). Many of the elements discussed in SWOT analysis are a part of this process, including environmental factors, organizational structure, capital financing, operational planning, and measurement of financial performance.

defInItIon SWOT analysis is an examination of an organization’s internal strengths and weaknesses, its opportunities for growth and improvement, and the threats the external environment

SWOT analysis

Examination➤of➤

an➤organization’s➤

internal➤strengths➤

and➤weaknesses,➤

its➤opportunities➤

for➤growth➤and➤

improvement,➤and➤the➤

threats➤the➤external➤

environment➤presents➤

to➤its➤survival.

Key terms and concepts

➤➤ Bundled➤payment

➤➤ Churn➤rate

➤➤ Downstream➤value

➤➤ Force➤field➤analysis

➤➤ Opportunities

➤➤ Strengths

➤➤ SWOT➤analysis

➤➤ Threats

➤➤ Weaknesses

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presents to its survival. Originally designed for use in other industries, it is gaining increased use in healthcare.

steps In swot analysIs The primary aim of strategic planning is to bring an organization into balance with the external environment and to maintain that balance over time. Organizations accomplish this balance by evaluating new programs and services with the intent of maximizing orga- nizational performance. SWOT analysis is a preliminary decision-making tool that sets the stage for this work.

Step 1 of SWOT analysis involves the collection and evaluation of key data. Depend- ing on the organization, these data might include population demographics, community health status, sources of healthcare funding, and the current status of medical technology in the organization. Once the data have been collected and analyzed, the organization assesses its capabilities in these areas.

After the data on the organization are collected, in step 2 it is sorted into four categories: strengths, weaknesses, opportunities, and threats. Strengths and weaknesses generally stem from factors in the organization, whereas opportunities and threats usually arise from external factors. Organizational surveys are an effective means of gathering some of this information, such as data on an organization’s finances, operations, and processes (Makos 2014). Exhibit 4.1 illustrates step 2 of SWOT analysis in a hypothetical example

exHIbIt 4.1 Sample SWOT

Matrix Strengths

• Worldwide reputation

• Focus on patient care

• Focus on quality and value

• Experience in medical imaging

• Location of hospital

• High-tech facility and equipment

• No capital expenditures

Weaknesses

• Some increase in staffing

• Some dissatisfaction by employees

working on Saturdays

• Increased workload for radiologists

already working at peak performance

Opportunities

• Local community targeted marketing

• Improvements in payer mix

• Improvements in integrated care

Threats

• Local competitors offering Saturday MRIs

• Loss of potential market share and revenue

to competitors

• Unknown implications of healthcare reform

Helpful to Objective Harmful to Objective

Ex te

rn al

O ri

gi n

In te

rn al

O ri

gi n

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of an outpatient clinic considering the value of adding Saturday MRI (magnetic resonance imaging) appointments in response to increasing demand.

Step 3 involves the development of a SWOT matrix for each business alternative under consideration. For example, say a hospital is evaluating the development of an ambulatory surgery center (ASC). It is looking at two options: The first is a wholly owned ASC, and the second is a joint venture with local physicians. The hospital’s expert panel would complete a separate SWOT matrix for each alternative.

Step 4 involves incorporating the SWOT analysis into the decision-making process to determine which business alternative best meets the organization’s overall strategic plan.

strengtHs

Traditional SWOT analysis views strengths as current factors that have prompted out- standing organizational performance. Examples include the use of state-of-the-art medical equipment, investments in healthcare informatics, and a focus on community healthcare improvement projects.

To draw an example from real life, Mayo Clinic is a nonprofit, integrated, mul- tispecialty medical practice with more than 60,000 employees. Mayo is an outstanding organization because it integrates the provision of healthcare through teamwork, the use of real-time patient healthcare information, and the application of advanced technology to provide high-quality care to the patient at an affordable cost (Berry and Beckham 2014). For example, treatment at an academic medical center during the last two years of life for a patient with at least one of nine chronic conditions might cost $93,000, while similar treat- ment at Mayo would cost $53,000 (Wennberg et al. 2008). Mayo’s strengths also include investing in structural tools such as comprehensive electronic health records, which connect individual clinicians with the latest clinical information available for treating the patient.

Patients at Mayo frequently have complex medical conditions that benefit from the pooling of knowledge inside the organization and among the integrated healthcare team. Mayo fosters a culture that considers teamwork essential to delivering patient-centered care. This attitude translates to a unified focus on shared values to achieve a high level of collaboration across the team. This teamwork enhances learning, inspires confidence, and promotes camaraderie among the clinical team. Research suggests that top-tier organizations nurture teamwork and recruit individuals who are likely to be team players (Beckham 2013).

For other healthcare organizations, potential organizational strengths might include highly competent personnel, a clear understanding among employees of the organization’s goals, and a focus on quality improvement. Future strengths include growth through mergers and acquisitions as healthcare organizations consolidate into larger organizations with annual revenues in excess of $2 billion (Zuckerman 2014). These larger organizations have the abil- ity to reach economies of scale and reduce costs in the future by 3–5 percent annually. This reduction in costs combined with improved quality results in greater value for the patient.

Strengths

Current➤factors➤that➤

have➤prompted➤

outstanding➤

organizational➤

performance.

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weaKnesses

Weaknesses are organizational factors that increase healthcare costs or reduce healthcare quality. Under healthcare reform, it is increasingly clear that hospitals that seek to “go it alone” will find it difficult to acquire the financial and human resources necessary to build the infrastructure required for coordinated care.

The fundamental Affordable Care Act (ACA) model for integrated care shifts the healthcare system from volume-driven fee-for-service care provision to chronic disease management and value-driven episodes of care (see Highlight 4.1). The shift is occur- ring piecemeal, one payer and one contract at a time—forcing hospitals to operate in both the volume- and value-driven models at the same time. As a result, hospital mergers have increased in order to find strategic partners that can manage the transition from a volume-driven to a value-driven marketplace. In 2000, 52 percent of hospitals were part of multihospital systems, whereas by the end of 2013, 62 percent of hospitals had joined multihospital systems (AHA 2014). As organizations now position themselves for value- based reimbursement with shared savings and bundled payments (single payments made to providers or healthcare facilities for all services rendered to treat a given condition or provide a given treatment), freestanding hospitals will increasingly be unable to provide integrated healthcare (Lineen 2014).

Other hospital weaknesses include aging facilities and a lack of continuity in clinical processes, which can lead to duplication of efforts. Weaknesses can be broken down fur- ther to identify underlying causes. For example, disruption in the continuity of care often results from poor communication. This fragmentation leads to inefficiencies in the entire system—weaknesses also breed other weaknesses. Thus, poor communication disrupts the continuity of care. Inefficiencies, in turn, deplete financial and other resources.

The growth in integrated delivery systems allows greater efficiency across the con- tinuum of healthcare. As a result, hospitals will need to develop ambulatory care networks and enhance their relationship with multispecialty physician groups. Failing to market ambulatory services in the face of increasing competition could prove to be a fatal weakness as patient referrals migrate to larger health systems.

Other common weaknesses include poor use of healthcare informatics, insufficient management training, lack of financial resources, and an organizational structure that limits collaboration with other healthcare organizations. A payer mix that includes large num- bers of uninsured patients or Medicaid patients can also negatively affect an organization’s financial performance, and lack of relevant and timely patient data can increase costs and lower the quality of patient care.

opportunItIes

Traditional SWOT analysis views opportunities as significant new business initiatives avail- able to a healthcare organization. For example, healthcare organizations could collaborate through the development of healthcare delivery networks, pursue increased funding for

Weaknesses

Organizational➤

factors➤that➤increase➤

healthcare➤costs➤or➤

reduce➤healthcare➤

quality.

Bundled payment

Single➤payment➤

made➤to➤providers➤or➤

healthcare➤facilities➤(or➤

jointly➤to➤both)➤for➤all➤

services➤rendered➤to➤

treat➤a➤given➤condition➤

or➤provide➤a➤given➤

treatment.

Opportunities

Significant➤new➤

business➤initiatives➤

available➤to➤

a➤healthcare➤

organization.

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healthcare informatics, partner with communities to develop new healthcare programs, or introduce clinical protocols to improve quality and efficiency. Additional opportunities include obtaining increased reimbursement; instituting value-based purchasing; increasing patient satisfaction; providing new clinical services aligned with population health needs; and delivering integrated, patient-focused care. Healthcare organizations might also improve patient satisfaction by increasing public involvement and ensuring patient representation on boards and committees.

Organizations that are successful at using data to improve clinical processes have lower costs and higher-quality patient care. For example, healthcare organizations with Centers for Medicaid & Medicare Services (CMS) Hospital Compare quality scores above the 90th national percentile are eligible for CMS pay-for-performance incentives (see Chapter 6 for information on CMS Hospital Compare). Pay-for-performance incentive programs vary payment among providers on the basis of quality and efficiency measures

HIGHLIGHT 4.1 Value-Driven Episodes of Care

The➤US➤Department➤of➤Health➤&➤Human➤Services➤(HHS)➤is➤testing➤and➤expanding➤new➤

healthcare➤payment➤models➤that➤can➤improve➤healthcare➤quality➤and➤reduce➤its➤cost.➤

HHS➤has➤adopted➤a➤framework➤that➤categorizes➤healthcare➤payment➤according➤to➤how➤

providers➤receive➤payment➤to➤provide➤care:

•➤ Category➤1—Fee-for-service➤with➤no➤link➤of➤payment➤to➤quality

•➤ Category➤2—Fee-for-service➤with➤a➤link➤of➤payment➤to➤quality

•➤ Category➤3—Alternative➤payment➤models➤built➤on➤fee-for-service➤architecture

•➤ Category➤4—Population-based➤payment

Value-based➤purchasing➤includes➤payments➤made➤in➤categories➤2–4.➤Moving➤from➤

category➤1➤to➤category➤4➤involves➤two➤shifts:➤(1)➤increasing➤accountability➤for➤both➤qual-

ity➤and➤total➤cost➤of➤care➤and➤(2)➤a➤greater➤focus➤on➤population➤health➤management➤as➤

opposed➤to➤payment➤for➤specific➤services.➤

Prior➤ to➤2011,➤many➤Medicare➤payments➤ to➤providers➤were➤ tied➤only➤ to➤volume,➤

rewarding➤providers➤based➤on,➤for➤example,➤how➤many➤tests➤they➤ran,➤how➤many➤pa-

tients➤they➤saw,➤or➤how➤many➤procedures➤they➤did,➤regardless➤of➤whether➤these➤services➤

helped➤(or➤harmed)➤the➤patient.➤But➤under➤the➤ACA➤and➤because➤of➤other➤changes,➤by➤

2014,➤an➤estimated➤20➤percent➤of➤Medicare➤reimbursements➤had➤shifted➤to➤categories➤

3➤and➤4,➤directly➤linking➤providers’➤reimbursement➤to➤the➤health➤and➤well-being➤of➤their➤

patients➤(CMS➤2015).➤

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so that desired outcomes occur through changed behavior. The greater the number of organizations achieving such scores, the greater patients’ access to quality healthcare. Such scores also enhance an organization’s reputation in the community. While there will always be a certain number of hospitals at the 90th percentile, the bar continues to keep getting higher. Even the best have to continue to improve.

tHreats

Threats are factors that could negatively affect organizational performance. Examples include political or economic instability, increasing demand by patients and physicians for expensive medical technology that is not cost-effective, increasing state and federal budget deficits, and increasing pressure to reduce healthcare costs. Additional threats include healthcare funding cuts, the increasing cost of technology, and the potential for reduced access to capital.

One of the basic threats to a healthcare organization’s survival is churn rate, the quantity of new patients relative to existing patients. Hospital churn rates can vary, but a good target is 15 percent new patients annually. This rate replaces lost business while maintaining significant growth. A high churn rate can be good news. A low churn rate suggests that an organization is losing potential new patients to its competitors and poses a significant threat if the number of existing patients also declines. Such a decrease in the number of existing patients can come from many sources; patients may move out of the area, die, or age into a cohort requiring a different type of provider. Referral patterns among primary physicians may also change. Low churn rates clearly reflect an organization’s inability to attract new patients, possibly driven by low patient satisfaction.

swot analysIs: Internal and external perspectIve As shown in Exhibit 4.1, SWOT has an internal as well as an external focus. Strengths and weaknesses are primarily internal in origin. Examples of these internal factors include patient satisfaction, cost per procedure, and level of quality. Conversely, opportunities and threats are primarily external in origin. These could include the level of competition in the market, the availability of integrated care, and the economy of scale as measured by an organization’s market share. Strengths and opportunities are helpful to the objective; weaknesses and threats are harmful to the objective.

force fIeld analysIs Healthcare organizations’ responsibility to implement change that is beneficial to the patient, staff, and organization is increasing. The primary drivers of change in healthcare are the push for quality improvement, the need for customer satisfaction, the desire to improve working conditions, and the diversification of the healthcare workforce.

Threats

Factors➤that➤could➤

negatively➤affect➤

organizational➤

performance.

Churn rate

Ratio➤indicating➤

the➤quantity➤of➤new➤

patients➤relative➤to➤

existing➤patients.

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Force field analysis (see Exhibit 4.2) takes SWOT analysis a step further by iden- tifying the forces driving or hindering change—in other words, the forces driving an organization’s strengths, weaknesses, opportunities, and threats. Kurt Lewin’s (1951) force field analysis and force field diagrams are the founding theory for this exercise. Forces that propel an organization toward goal achievement are called helping forces, while those that block progress toward a goal are called hindering forces. After identifying these positive and negative forces, an organization can develop strategies to strengthen the positives and minimize the negatives. For an organization to achieve success, the helping forces must outweigh the hindering forces. When this state is reached, an organization is able to move from its current reality to a preferred future.

Effective force field analysis considers not only organizational values but also the needs, goals, ideals, and concerns of individual stakeholders. Individuals who promote change are

Force field analysis

Examination➤of➤

the➤forces➤helping➤

or➤hindering➤

organizational➤change.

exHIbIt 4.2 Healthcare Model for Force Field Analysis

Limited Financial Resources

Poor Payer Mix with Low Reimbursement

Marginal Patient Safety

Eq ui

lib ri

Low Healthcare Quality

Lack of Motivated and Skilled Personnel

Culture Opposed to Change

Patient Perception of Quality

Driving Forces Restraining Forces

Culture of Innovation

Adequate Financial Resources

Profitability

Highly Skilled Personnel

Transformational Leadership

High Low Probability of Change

+2 +1 0 –1 –2

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helping forces, whereas those who resist change are hindering forces. As a result, understand- ing individuals, their attitudes, and the culture of the organization is important. A group performing force field analysis should also identify the key stakeholders in an issue and develop a plan to gain their support. Counteracting organizational inertia (the hindering forces) and creating an environment that proactively supports future change (the helping forces) is vital. Such change is accomplished by modifying current attitudes (“unfreezing” an organization’s perspective on a particular issue), emphasizing the positive aspects of change, and then incorporating the new attitudes in the organization’s processes (“refreezing” the new attitudes so that they and their associated behavior patterns become entrenched in the institution).

A participative management style that solicits input from inside the organization is important in implementing change. This approach also fosters the development of con- sensus within work groups, which helps to refreeze the new behaviors in the organization.

gap analysIs To further refine planning decisions, SWOT analysis can be supplemented by gap analy- sis, which reveals differences between the organization’s current standing and its target performance. Knowing where to focus efforts improves the efficiency of interventions. Obtaining data that can be used for local benchmarking and improvement is a key step in raising awareness and driving quality improvement. Research shows that while we have seen improvement, there are still gaps of quality care in healthcare practice. For example, in 2010, 287,000 women died worldwide from causes related to pregnancy and childbirth. Also, during the same year, 3.1 million babies died in their first month of life (Dean et al. 2014). These mortality rates clearly show that improvement is needed in the continuum of care for these patients. Preconception care is a solution that would improve the continuum of care by ensuring ongoing health surveillance and early intervention so that women begin pregnancy in the best possible health. Some potential tools include community-based studies to identify need and availability of resources, education programs, women’s support groups, and counseling on topics such as smoking, obesity, nutrition, diabetes, hypertension, and depression. By closing the gap through preconception care, health professionals can enhance the community’s health status and improve clinical outcomes for women, mothers, and infants.

Implementing a gap analysis framework to improve quality of care for patients requires an organization to ask and answer a series of tough questions (Dick, Gaudreault, and Shakir 2010; see Exhibit 4.3).

Gaps also exist between people’s expectations of high-quality care and situations in which they receive low-quality healthcare. Low-quality healthcare may be the result of providers’ lack of responsiveness, marginal competence, unreliability, weak communication skills, and breaches of confidentiality. Performance variations also result from trade-offs in the allocation of healthcare resources (Kasti 2013). For example, some healthcare organizations

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may lack the financial resources to purchase new equipment or hire additional staff when experiencing increased demand because they have allocated their resources for another purpose; as a result, patients experience excessive waiting times.

downstream revenue Understanding downstream value—the revenue captured by the services a patient uses after his initial visit—can provide a hospital with a better foundation for strategic plan- ning and resource allocation. Although hospitals tend to think in terms of transactions, in the rapidly changing healthcare environment, hospitals must increasingly look beyond the dollars spent on the initial transaction and incorporate downstream revenue. Patients generate two to ten times the value of the initial transaction in the two years following that encounter from sources such as subsequent testing or return visits (Sturm 2009).

A full-time physician brings in an average of $1.45 million in net revenue every year to the hospital with which she is affiliated, and some specialties bring in almost double that amount. In 2013, primary care physicians brought in more revenue to their hospitals than specialists did. Primary care physicians generated $1.57 million in downstream revenue for their hospitals, compared to $1.42 million from specialists. This figure did not include indirect revenue they may have created from patient referrals to specialists (Herman 2013).

Downstream revenue can provide a strong foundation of resources for future stra- tegic planning. Moreover, as changes in reimbursement drive transactional revenue down, positive patient relationships that produce an ongoing revenue stream from repeated and clinically appropriate visits are critical.

Downstream value

Revenue➤captured➤

by➤the➤services➤a➤

patient➤uses➤after➤his➤

initial➤visit,➤such➤as➤

subsequent➤testing➤or➤

return➤visits.

exHIbIt 4.3 Performing a Gap Analysis

What are we trying to accomplish?

What to Ask How to Answer

Pinpoint gaps and who falls through them.

Identify the target population and improvement goal.

What changes can we make that will result in improvement?

Identify the causes and barrier behind the gap.

Determine what changes would improve care or close the gap.

Plan and implement change.

Monitor results.

How will we know if a change is an improvement?

Collect data.

Plot or display the data for analysis.

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SWOT➤analysis➤is➤performed➤prior➤to➤the➤strategic➤planning➤process.➤Ideally,➤SWOT➤analysis➤ includes➤a➤comprehensive➤review➤of➤the➤healthcare➤literature,➤in-depth➤data➤analysis,➤and➤ input➤from➤a➤panel➤of➤SWOT➤analysis➤experts.➤Findings➤from➤the➤analysis➤are➤sorted➤into➤ four➤categories:➤strengths,➤weaknesses,➤opportunities,➤and➤threats.➤Force➤field➤analysis➤ supplements➤SWOT➤analysis➤by➤identifying➤the➤forces➤driving➤the➤strengths,➤weaknesses,➤ opportunities,➤and➤threats.➤To➤refine➤these➤analyses➤even➤further,➤gap➤analysis➤may➤be➤ performed➤to➤determine➤where➤deficiencies➤exist➤in➤an➤organization’s➤delivery➤of➤care.➤Such➤ analyses➤promote➤(1)➤a➤better➤understanding➤of➤barriers➤to➤change,➤innovation,➤and➤the➤ transfer➤of➤knowledge➤to➤practice;➤(2)➤improved➤outcomes;➤and➤(3)➤more➤efficient➤allocation➤ of➤healthcare➤resources.

A➤review➤of➤service➤lines➤allows➤organizations➤to➤identify➤new➤promotable➤products.➤ These➤promotable➤products➤should➤have➤a➤high➤profit➤margin➤and➤downstream➤revenue➤op- portunity➤and➤should➤allow➤for➤low-cost➤ease➤of➤entry➤as➤a➤reasonable➤payback➤period.➤Other➤ signs➤of➤market➤potential➤are➤leading➤indicators➤in➤the➤geographic➤area➤such➤as➤housing➤ starts,➤employment➤rates,➤and➤per➤capita➤income,➤which➤can➤be➤harbingers➤of➤future➤activity➤ in➤a➤healthcare➤service➤line.

revIew QuestIons

1.➤ How➤does➤SWOT➤analysis➤set➤the➤stage➤for➤strategic➤planning? 2.➤ Discuss➤the➤use➤of➤force➤field➤analysis➤in➤promoting➤change➤in➤a➤healthcare➤

organization. 3.➤ Provide➤examples➤of➤how➤gap➤analysis➤can➤be➤used➤to➤improve➤the➤quality➤of➤health-

care➤services. 4.➤ Provide➤an➤example➤of➤how➤a➤hospital’s➤strategic➤plan➤can➤affect➤downstream➤

revenue.

coastal medIcal center exercIses: swot analysIs and HospItal emergency department expansIon

Using➤the➤four➤steps➤of➤SWOT➤analysis➤discussed➤in➤Chapter➤4,➤create➤a➤panel➤of➤experts➤and➤ perform➤a➤SWOT➤analysis➤for➤Coastal➤Medical➤Center➤(CMC).➤Use➤SWOT➤analysis➤to➤identify➤fac- tors➤that➤are➤key➤to➤getting➤CMC➤back➤on➤track➤and➤moving➤forward➤on➤a➤new➤road➤to➤success.➤

CMC➤CEO➤Richard➤Reynolds➤has➤met➤with➤Dr.➤John➤Warren,➤the➤chief➤medical➤officer,➤ and➤Dr.➤Debra➤Jones,➤the➤director➤of➤the➤CMC➤emergency➤department➤(ED).➤They➤discussed➤

exercIses

summary

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the➤quality-level➤data➤included➤in➤the➤following➤report.➤They➤also➤discussed➤a➤workload➤re- port➤of➤the➤ED➤service➤volume➤for➤the➤past➤year.➤The➤data➤show➤a➤high➤level➤of➤ED➤utilization.➤ The➤average➤charge➤for➤a➤hospital➤ED➤visit➤is➤$1,000➤plus➤$500➤in➤ancillary➤charges➤such➤as➤ laboratory,➤radiology,➤and➤pharmacy.➤However,➤the➤data➤also➤suggest➤that➤a➤percentage➤of➤ the➤ED➤patients➤are➤leaving➤without➤being➤seen.➤Mr.➤Henderson,➤Dr.➤Warren,➤and➤Dr.➤Jones➤are➤ concerned➤about➤lost➤revenue➤because➤hospital➤data➤show➤that,➤in➤addition➤to➤the➤ED➤charges,➤ if➤admitted➤to➤the➤hospital,➤patients➤generate➤an➤average➤of➤$100➤in➤profit➤per➤inpatient➤day.➤

coastal medIcal center QuestIons

Use➤the➤following➤report➤to➤answer➤these➤questions:

1.➤ Based➤on➤your➤evaluation➤of➤the➤ED➤data,➤do➤you➤see➤any➤current➤problems?➤ 2.➤ Based➤on➤the➤data➤provided,➤calculate➤the➤potential➤lost➤revenue➤for➤ED➤visits➤over➤

the➤past➤year. 3.➤ Based➤on➤the➤data➤provided,➤calculate➤the➤potential➤lost➤downstream➤hospital➤rev-

enue➤from➤ED➤admissions➤who➤walked➤out➤over➤the➤past➤year. 4.➤ Make➤a➤recommendation➤to➤Mr.➤Henderson,➤Dr.➤Warren,➤and➤Dr.➤Jones➤for➤how➤to➤deal➤

with➤the➤ED➤problem.

CMC Hospital Data

Annual➤discharges 40,720

Average➤length➤of➤stay➤(days) 5.1

Average➤daily➤census 423

Inpatient➤surgeries 13,000

Outpatient➤surgeries 14,900

Births 2,400

Outpatient➤visits 245,000

Emergency➤department➤(not➤admitted) 36,400

Emergency➤department➤(admitted) 24,700

Total➤emergency➤department➤patients 61,100

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ED Quality-Level Comparison

Score

Measure CMC State

Average National Average

Average➤(median)➤time➤patients➤spent➤in➤ ED➤before➤admission➤

340➤minutes 282➤minutes 272➤minutes

Average➤(median)➤time➤patients➤spent➤ between➤decision➤to➤admit➤and➤departing➤ for➤inpatient➤room

130➤minutes 108➤minutes 97➤minutes

Average➤time➤patients➤spent➤in➤ED➤before➤ being➤sent➤home

150➤minutes 143➤minutes 133➤minutes

Average➤time➤patients➤spent➤in➤ED➤before➤ being➤seen➤by➤a➤healthcare➤professional

36➤minutes 23➤minutes 24➤minutes

Average➤time➤patients➤with➤broken➤bones➤ waited➤for➤pain➤medication

70➤minutes 56➤minutes 55➤minutes

Percentage➤of➤patients➤who➤left➤ED➤➤ before➤being➤seen

4% 2% 2%

Percentage➤of➤patients➤who➤came➤to➤ED➤ with➤stroke➤symptoms➤and➤received➤brain➤ scan➤results➤within➤45➤minutes➤

55% 67% 61%

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