Michael Porter, one of the nation’s leading authorities on competitive strategy once said, “The essence of strategy is choosing what not to do.”
Choosing what not to do in today’s health care environment is complicated by the complex shift toward value-based care, the expansion of population health management and the rise of the new health care consumer. Hospital strategic planning is a critical function as hospitals and health systems select the right path for the future.
“We find that it’s important not only to communicate our strategy, but also to say what it is not,” says Wendy Warring, senior vice president of network development, Boston Children’s Hospital. “We cannot pursue every idea.” Indeed, the options are many. From patient-centered medical homes to accountable care organizations, mergers and acquisitions, community partnerships and retail clinics, executives must determine what approach will help to support the organization’s mission and vision going forward.
“There is so much uncertainty that various viewpoints of what’s going to happen are valid,” Warring adds. “So, it is more difficult to find the right strategy.”
Prior to passage of the Affordable Care Act, MedStar Health, Columbia, Md., developed a 10-year strategic framework — MedStar 2020 — to help guide the organization through the transformational years. “It’s really helped guide us through the uncertainty that the ACA created,” says Diane Caslow, MedStar’s vice president of strategic and business planning. Prior to passage of the ACA, MedStar’s strategic planning process was focused on growth. “Now it’s about value, in addition to growth, and whether we are growing in the right way,” says Jennifer Wilkerson, vice president of strategic and business planning, MedStar’s Baltimore region. “Are we providing the right services and meeting patients’ expectations?”
As the pace of transformational change is quickening, so, too, is the hospital strategic planning process. “We used to spend more time on our planning, but now we don’t have six months to think about something,” says Wilkerson. “If we took that much time, somebody else would beat us to it.” Ruth Colby agrees. “Strategy is more rapid-cycle now,” says Colby, senior vice president, business development, and chief strategy officer, Silver Cross Hospital, New Lenox, Ill. “I use my role to remove barriers, working closely with our clinical leaders, among others. It helps us to react quickly.”
Getting Started with Lean Startup
Ochsner Health System, New Orleans, has partnered with GE Healthcare to drive innovation though several initiatives, including customizing GE’s FastWorks, a Lean startup initiative. “The goal is to develop and implement simple, fast, effective processes to meet our patients’ needs,” says Mark Muller, Ochsner’s senior vice president of strategy and business development. Specifically, Ochsner will explore new delivery models that apply digital health technology to enhance patient care.
An important part of FastWorks is learning that it’s OK to not always be right, says Rob Reilly, chief marketing officer, GE Healthcare. “Innovation requires you to be wrong sometimes. The key is how fast you learn to make a course correction to get to the end answer,” he says. Leadership and board support are crucial, as Lean startup requires significant cultural change. “In health care, we want things to be perfect,” Reilly says, “but true innovation comes from the learning process of not being right.”
The adoption of Lean startup principles does not require significant up-front investment. Interested organizations can set aside a small amount to test the process and build on the key findings. “It’s important to give people the authority to fail, as long as the learning value exceeds the cost of failure,” Reilly says.
What You Can Do Now
1 | Reimagine the standard strategic planning process: Instead of adopting a project mentality, consider your organization’s response as a series of experiments. Start by creating a list of the top five things the organization needs to discover to ensure project success.
2 | Know your audience: Identify between five and 10 ways to get direct, quick feedback from consumers, patients and internal stakeholders.
3 | Accelerate testing: Focus on testing your potential solution with prospective customers earlier in the process. Set a goal to test the prototype at the end of one month vs. the end of a year. Develop a list of resources and expertise needed to build prototypes, measure and learn.
4 | Engage key stakeholders: Divide key stakeholders into two groups. Ask one group to imagine that the implementation of your solution was an epic failure and then ask them to consider why the project failed. Ask the second group to consider why the implementation was a success and then ask them to identify what factors led to a successful outcome. Compare the responses to identify common themes.
Source: “Bridging Worlds: The Future Role of the Healthcare Strategist,” Society for Healthcare Strategy & Market Development,” 2015.