Strategic Planning in Healthcare: An In-Depth Guide for Executives

A healthcare organization's strategic plan is designed to identify the necessary actions needed to reach the objectives of the organization. Whether you’re creating a new strategic plan from scratch or you’re trying to breathe life into an old plan, I bet we can both agree that strategic planning and execution are tougher than they seem. But if you have the right tools at your disposal, the process doesn’t have to be quite so painful.

Below, we present an overview of strategic planning in the healthcare industry, including: an introduction to six strategic planning techniques; the four phases necessary to execute a strategic plan; and two examples of strategic planning in healthcare. Last but not least, we’ll describe some common pitfalls of strategic planning, so you can avoid them in your own planning.

Chapter 1: 6 Strategic Planning Techniques

1. The Performance Prism Model: The Performance Prism is a performance management framework with five perspectives: stakeholder satisfaction, stakeholder contribution, strategies, processes, and capabilities.
2. The EFQM Excellence Model: Like the majority of these six techniques, the EFQM model can be used in conjunction with other frameworks. It combines three elements—Fundamental Concepts of Excellence, Criteria, and RADAR—to help you understand cause-and-effect relationships in your organization.
3. The Balanced Scorecard: The Balanced Scorecard (BSC) is a strategy management framework that helps you “balance” four perspectives in your organization: finances, customers, internal processes, and learning and growth. In conjunction with a strategy map, the BSC can help provide an excellent way to manage your strategy.
4. Benchmarking: Benchmarking allows you to compare metrics in your organization to either an industry average or your competitors. This is a great targeted solution, but less of a full framework.
5. Capability analysis: Conducting this analysis helps you think of your organization as a set of capabilities so you can work on identifying gaps that may represent a competitive weakness (and highlight new capabilities that could be a competitive advantage!)
6. Market analysis: Conducting market research will give you a good indication of industry size, growth, and trends to be aware of. This is very helpful input for your strategic plan, but it is not a plan in and of itself.

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For strategic plans in healthcare organizations to work, you need to ensure you’re following a process instead of having a free-for-all. For example, if you don’t take time to analyze what needs to go into your strategic plan, you’ll end up with a handful of pointless (and frustrating) meetings.

Take a look at the following four planning phases—they’ll help you set a solid strategic plan in place.

Chapter 2: 4 Planning Phases

1. The Analysis & Assessment Phase

First, it’s critical to gain a basic understanding of what direction you’re trying to go in (while taking into account your internal organizational structure and any external factors you have to consider). You’ll want to hold the majority of your strategy meetings during this phase. In hospitals specifically, you’ll want to figure out where you need to increase performance and focus in on your plans. This is also a good time to look at areas where you are struggling and determine what direction the regulatory and competitive environment is moving in. This will be the area of the highest and most critical need.

2. The Strategy Formulation Phase

During this phase, you’ll focus on developing your high-level strategy and documenting your organization-level strategic plan. You’ll want to pick out the goals and metrics you want to track. For example, most hospitals track metrics that deal with operations, finances, communication, internal issues, public health, and care.

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Also, this is the time to look at your general organizational structure and how it links to the strategy. Do you have the right people in charge of the right aspects of your strategy. This helps create accountability and ensures things don’t fall through the cracks. For example, if you’re using the Balanced Scorecard, we encourage you to name owners and collaborators as well as what each person is responsible for therein.

3. The Strategy Execution Phase

During this phase, you’ll translate your high-level strategic plan into an operational plan by honing in on projects and actions.

The execution phase can be particularly challenging for healthcare organizations because they tend to have lots of moving parts. Performance-wise, this not only complicates seeing the big picture—even if individual departments are tracking their own metrics—but also makes it nearly impossible for strategy teams to keep up with the demands of generating massive amounts of relevant data.

To execute your plan successfully, you’ll need to turn your strategy execution process into a well-oiled machine—hence the growing use of strategy software by healthcare organizations. Advanced software like ClearPoint allows you to track and manage performance using a single cloud-based platform, so that everyone in your organization remains informed and in sync with one another. (See more on this in the next chapter.)

4. The Plan Evaluation Phase

This final phase deals with the management process—which includes refining your plan, evaluating performance, and reporting on your data. For example, if you’re tracking all of your metrics and you see one that doesn’t align well, this is when you’d alter or enhance it to make it more applicable to your strategy. Keep in mind, this phase is ongoing and never-ending. You will always be evaluating and refreshing your plan!

Chapter 3: Two Examples Of Strategic Planning In Healthcare

Though good strategic planning is indispensable, it’s arguably less than half the battle; the lion’s share of effort in achieving progress will go toward the execution of your plan. This is where many healthcare organizations stumble. They aren’t prepared for the work involved in follow-through, nor are they ready to commit the time and tools required to improve performance.

ClearPoint, for its part, is an invaluable tool. It was specifically designed to help you visualize strategy, organize strategic data, and track and report on performance.

Below are two examples of healthcare strategic planning that demonstrate the impact strategic planning software can have on strategy execution. In both cases, ClearPoint aided the execution of the plans.

San Juan Regional Medical Center (SJRMC)

SJRMC came to us with a problem: They had always used strategy planning for continuous improvement, but struggled to achieve their goals because their software lacked sufficient data tracking and reporting functionality. In particular:

• They had difficulty organizing their data in a meaningful way. They couldn’t get a big-picture view of important metrics, and had no way to compile individual metrics into a strategically comprehensive profile of the hospital’s performance. This made it hard to see how any single department’s daily work was contributing to (or underserving) SJRMC’s larger goals.
• They spent too much time on reporting. Staff members devoted nearly a full day to compiling reports every month.
• Most managers avoided looking at their data because the software was hard to use. Apart from occasionally entering data for committee meetings, people avoided the tedious chore of data entry as well.

Now that they’re using ClearPoint:

• Managers have a better overall picture of performance. Data is displayed in a clear, logical format that enables users to easily analyze performance and make impactful changes based on data-derived conclusions.
• Staff members can produce reports in minutes. All the hospital’s strategic data is housed in ClearPoint. Where calculations are involved, ClearPoint performs them automatically. Team members simply press the “export to PDF” or “print” buttons and the software generates a report.
• Managers stay on top of their metrics. The first thing SJRMC’s employees noticed about ClearPoint was its simplicity, making them more inclined to use it as an aid to improving performance.

Such improvements expedite and streamline hospital processes, and give managers more opportunities and resources for continuously improving performance. They also help leadership more effectively target strategic goals.

Carilion Clinic

Carilion Clinic has a similar story. Following the Balanced Scorecard framework for strategic planning, the clinic uses leadership and provider scorecards to track and improve performance across all its facilities. While the scorecards themselves are effective, the system Carilion was using to create, manage, and share them was not. It took a significant amount of effort just to create a single scorecard. On top of that, there was no easy way for everyone—from physicians and management to senior leaders and board members—to access the information.

The upshot is that Carilion staff members have found ClearPoint to be much more user-friendly and efficient than the old system. The software automatically collects data from other internal applications, and uses advanced algorithms to calculate and roll up key measurements. These capabilities make scorecard creation quick and easy.

ClearPoint also makes it easier for Carilion’s strategy team to share scorecards, which are now sent on an automated schedule to the clinic’s 1,000-plus providers and its senior leadership. By making performance data widely available, the software clarifies performance expectations and ensures everyone knows the metric targets inherent in the goals. It also promotes an understanding of factors that affect compensation for employees or physicians in a given year.

Chapter 4: 6 Pitfalls To Avoid In Healthcare Strategic Planning

Part of strategic planning in healthcare involves dealing with any road bumps that come your way. While most companies go through some trials during their strategic planning process, a misstep could have major consequences. For one, it could derail your progress and cause you to waste months of time and energy. Additionally, it could create confusion—or even concern—across your organization. Keep in mind, some people in your organization will always be critical of your strategic plan, and those individuals will be the first to doubt it and wonder why you aren’t headed “full-steam ahead.”

While there’s not much you can do to avoid critics, you can avoid putting yourself in a position to have your strategy (and your strategy office) criticized. Avoiding these six common pitfalls is an important step in that direction.

Pitfall #1: Selecting operational KPIs instead of strategic KPIs.

It’s far too simple to fall into the trap of selecting metrics that are important for your operations, but have little to no impact on your strategy. For example, many healthcare centers track the percentage of beds that are occupied in order to get a closer look at ongoing patient capacity. This metric helps you understand where you stand on capacity, and is largely operational. However, if one of your strategic goals is to increase the number of patients who choose your hospital or increase your capacity, then this metric could be strategic. Always be sure your metrics truly tie back to and inform your goals.

Pitfall #2: Having too many metrics.

The majority of healthcare providers come from either a business or a science background—which makes it quite easy for them to fall in love with measures. But the caution here is that some may get overzealous about metrics and try to track too many—which is a mistake.

If you have too many metrics—say, anywhere north of 35 at the enterprise level—you won’t be able focus on the metrics that will actually make an impact on your strategy. The list of negatives goes on and on: Your reports will end up being too extensive and leadership will be less likely to read them; your meetings will end up being hours long; and you’ll simply never complete the meeting agenda, etc. All of these issues can be avoided simply by not selecting extra metrics that will distract from the conversations you need to be having.

Pitfall #3: Piling too much on your strategy office.

I always recommend that you keep your strategy office as “clean” as possible. Here’s what I mean: It’s important to allow those working in the strategy office to do what they’re meant to do—plan and execute your strategy. We’ve seen many instances where others in the healthcare organization begin to tap the strategy office for little projects here and there that aren’t strategy related. The reason for this is typically that those in the strategy office are close to the leadership and are in-tune to what’s happening around the organization. While this makes them a tempting target for random projects, be sure everyone involved in your strategic planning knows their limits. The best way to ensure your strategic planning and strategy execution are successful is to keep the strategy office focused on its priorities, and nothing else.

Pitfall #4: Not having support lined up.

It would be a mistake to think it is easy to get people on board with a strategy whose planning process is already in motion. If you want the buy-in of high-level personnel, you must involve them from day one. Such “zero-base” coordination is critical to setting the stage for successful execution. Without it, you’ll invariably experience a degree of organizational discord that will impede planning, muddy priorities, hamstring the alignment of departmental goals, and hinder access to key resources. To avoid these impediments, you’ll need:

• People who understand where the organization should be going, as well as where performance can be improved
• People who can drive change in the process from start to finish
• People who can get the appropriate resources in place to carry out the strategic plans

Pitfall #5: Making unrealistic or ambiguous plans.

Making vague or ambiguous plans is a recipe for failure. You need to be specific about the work to be done if you hope to see improvement.

Similarly, make sure projects and action plans can realistically be achieved (including reasonable schedules). If goals and time frames are unrealistic, a constant sense of frustration will undermine morale. To avoid this pitfall, meet with the teams responsible for carrying out the components of your plan—as well as the department heads—to make sure they are armed with realistic goals and the resources they’ll need to succeed.

Pitfall #6: Hazily defined roles and responsibilities.

In non-medical corporations, most measure and project owners are tasked with updating their own measure statuses and project reports. But in healthcare organizations, this isn’t always the case. Healthcare organizations can have an assistant-heavy culture, and department leaders and doctors often task those assistants with updating projects they aren’t involved in.

Therefore, it’s particularly important for those in healthcare to clearly define roles and responsibilities when it comes to strategic planning and execution. Is it acceptable for assistants to make measure updates in an ongoing fashion? If so, do they know how to do this appropriately in your strategic planning software so your leadership is consistently made aware of updates? Simply communicating these details can save you a lot of grief in the long term.