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HCS/498 v3

HCS/498 Strategic Planning Capstone

HCS/498 v3

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HCS/498 Strategic Planning Capstone

5-year Strategic Plan Scenario

Background

Phoenix Hospital is a 180-bed acute care hospital that is qualified as a not-for-profit facility. The hospital was originally owned by the county and transferred status to an independent facility three years ago. The hospital receives no external funding from governmental agencies for operations. The hospital is accredited by The Joint Commission and received re-accreditation during its triannual survey last year. The hospital has an aggressive quality management program and a low volume of medical malpractice claims. The hospital is located in Bedford, which is a city of 50,000 with 80,000 in the regional market. The hospital provides a general range of acute care services including medical/surgical, rehab, and emergency care. The president of the hospital has asked you to lead the development of a 5-year strategic plan for the hospital. You will use data provided in this scenario to make your decisions and recommendations.

In addition to information provided in this scenario, you are expected to include information from outside sources that are relevant to real-life events and projections for today’s health care market. This would include any actual market projections based on changes to health care reform and financing.

Market Forces that Affect the Hospital

Volumes

Patients

The continued growth of chronic disease will require changes to the care management model.

Percent of Population by Age

Age Group	Five years ago	Five years from now
Under 18	24	18
18 to 44	46	32
45 to 65	24	30
Over 65	4	20

More than 53% of residents have at least some college education, with just more than 29% having an associates, bachelor’s, or graduate degree. More than 90 percent of residents have at least a high school diploma.

The average unemployment rate in the county is currently 9.9%.

Market share distribution percentage with major competitor.

Hospitals	5 years ago	Last year
Phoenix Hospital	48	35
Competitor	30	43
Out of country hospitals	22	22

Patient Origin by Zip Code for Phoenix Hospital

96101 is Phoenix Hospital zip code

94963 is major competitor hospital zip code

Payment

There is a continued focus on pay for performance and increased wellness programs. Health care reform has created more covered lives; however, there are often high deductibles.

The median household income for county residents is $59,548. On average, households in the county earn more than the state median household income of $44,446 and more than the national average of $53,650. The addition of a new automotive manufacturing plant to the local market this coming year is projected to add 1,500 production line jobs and 300 administrative jobs by year-end. Median income for the production positions is estimated at $45,000 and will provide health, vision, and dental insurance benefits.

Percentage of Population by Insurance

Current Payer Mix

Projected Payer Mix 5-years

As part of your review of this data, consider that a portion of the population will become Medicare eligible, the addition of manufacturing positions that include benefits will increase commercial insurance coverage, and changes from the health care reform will increase the number of patients in the market with insurance coverage.

Employers

There is expected growth in large employers with the addition of an automotive factory in the northwest sector of the county.

Staffing

Staffing has remained stable for the past year. The only difficulty is that there are not sufficient nurses cross-trained to work in the intensive care unit, so expensive agency nurses have been used periodically to fill this gap in the ICU.

Physicians

The continued shortage of medical staff, especially in orthopedics, oncology, and primary care, will require increased recruitment efforts.

Competitors

The other hospital in county, Hanover County Hospital, updated its facility and has drawn more market share.

Primary Competitors	Key Areas of Competition	New Programs and Facilities	Risk to Market Share
Hanover County Hospital	Facility upgrade Quality Scores	Significant renovation of core hospital to update aesthetics Added new wide-bore MRI machine last year Reaching 95th percentile in five of six HCAPS categories	Drawing patients to newer facility Accommodates heavier patients Patient perception of higher quality and patient satisfaction
Medical Center in county south of Phoenix	Physician clinics Financial stability	E-Visits with specialists Low debt and high cash on hand	Drawing patients out of primary and specialty care at Phoenix Hospital Ability to cash flow projects

Secondary Competitors	Key Areas of Competition	New Programs and Facilities	Risk to Market Share
Retail pharmacy instant clinic	Low acuity office visits	Pharmacy added instant clinic in north end of county 6 months ago	Loss of patients from primary care physician practices

Technology

The addition of e-visits by a large hospital system in an adjoining county has drawn more market share to their physician practices.

The hospital has one MRI unit that is seven years old and is beginning to experience more “downtime” and needs more frequent repairs. This downtime has caused some scheduling delays for patients, and medical staff are voicing their concern.

The hospital has implemented the first phase of an electronic medical records system, which includes patient records for medical units and lab and radiology reporting. Specialized components of the system for OB documentation and oncology documentation have not yet been purchased.

The emergency department provides EMS ambulance service to the county and has two ambulances. One ambulance is five years old and the second is eight years old with 187,000 miles on it.

The cardiology department has one cardiac catheterization lab in good working condition. Demand for Cath Lab time has increased, but there have been delays because of limited Cath Lab trained staff and only having one Cath Lab available.

The front lobby of the hospital is in disrepair with worn tile flooring and aged lobby furniture.

An employee gym was created several years ago but only contains one treadmill and a few weights. Staff have complained that there is not better gym equipment.

Regulatory Changes

Health care reform has increased the number of patients with some form of insurance payment. These patients are now seeking care in greater numbers from a primary care physician. Phoenix Hospital currently struggles with accommodating patient scheduling requests to establish care with a primary care physician.

Accreditation requirements for the coming year are changing to require CPOE (computerized physician order entry) in the medical record. The current electronic medical record system has not required CPOE, and staff regulations have accommodated verbal orders to nurses on a routine basis.

During the last Joint Commission survey, the hospital was cited for not having fire sprinkler heads in one patient care unit of the hospital. Installation cost is estimated at $50,000.

During the last Joint Commission survey, the hospital was cited for not demonstrating sufficient training of staff for emergency preparedness and disaster drills.

The State Department of Health has issued a new regulation that requires all hospital management personnel to have documented active shooter training once per year, beginning this coming year.

Hospital Financial Summary

Operating Revenues	This Year	Last Year
Net revenues from services to patients	343,737,280	344,726,245
Other operating revenues	16,846,309	20,311,534
Total operating revenues	360,583,589	365,037,779

Operating Expenses	This Year	Last Year
Salaries and benefits	192,053,379	182,853,245
Supplies and other expenses	130,173,477	135,560,131
Depreciation	18,969,799	20,644,157
Interest	2,695,623	2,226,437
Foundation	628,184	1,182,308
Total operating expenses	344,520,462	342,466,278

	This Year	Last Year
Income from operations	16,063,127	22,571,501

Volume changes last year versus this year

Last year

Admission ER visits Deliveries Surgeries 4458 20930 405 6365 This year

Admission ER visits Deliveries Surgeries 5147 26292 472 7284

Column2

[CATEGORY NAME] 52% [CATEGORY NAME] [VALUE] [CATEGORY NAME] [VALUE] [CATEGORY NAME] [VALUE] 96101 93921 92106 94963 0.42 0.12 0.16 0.2 Column2 96101 93921 92106 94963 0.42 0.12 0.16 0.2 US Age Distribution 2010 [CATEGORY NAME] [VALUE] [CATEGORY NAME] [VALUE] [CATEGORY NAME] [VALUE] [CATEGORY NAME] [VALUE] [CATEGORY NAME] [VALUE] Medicaid Medicare Commercial Uninsured Other 0.35 0.3 0.24 0.09 0.02 Medicare Medicaid Commercial Uninsured Other 38 24 32 4 2