HCS 499 Capstone

Strategic Planning Scenario

Background

Stevens District Hospital is a 162-bed acute care hospital that is qualified as a not for profit facility. The hospital was originally a county-owned facility and its status was transferred to an independent facility three years ago. The hospital receives no external funding from government agencies for operations. The hospital is accredited by The Joint Commission and received reaccreditation during their 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 Jefferson City, 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.

Current Performance Analysis

Mission and Vision

Our mission: To improve health by providing high-quality care, a comprehensive range of services, and exceptional service.

Our vision: Stevens District Hospital and its affiliates will be the health care provider of choice for physicians and patients. Our five year vision is to create a large, multispecialty physician practice system that would include at least six family practice physicians and specialists in cardiology, oncology, and women’s services. Currently, the hospital employs three family practice physicians, one obstetrician, one medical oncologist, and one non-invasive cardiologist.

Previous Strategic Plan Review

Market Forces Affecting the Hospital

Volumes

44582093040563655147262924727284050001000015000200002500030000AdmissionER visitsDeliveriesSurgeriesVolume changes last year versus this yearLast yearThis year

 

Patients

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

Percent of Population by Age

	Five Years Ago	Five Years From Now
Under 18	24	18
18 to 44	46	32
45 to 65	26	30
Over 65	4	20

More than 53 percent of residents have at least some college education, with just over 29 percent having an associate, 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 9.9 percent:

Market share distribution percentage with a major competitor.

	Five Years Ago	Last Year
Stevens District Hospital	48	35
Competitor	30	43
Out of County Hospitals	22	22

Patient Origin by Zip Code

 

 

Increases in the percent of population with chronic disease and contributing factors will change significantly over the coming five years.

 

 

Payment

There will be continued focus on pay for performance and increased wellness programs. The Affordable Care Act is creating 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.

 

 

Medicaid, 35%Medicare, 30%Commercial, 24%Uninsured, 9%Other, 2%

 

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 Affordable Care Act will increase the number of patients in the market with insurance coverage.

Employers

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

Physicians

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

Competitors

Hanover County Hospital, which is the other hospital in the county, has an updated facility that has drawn more market share to its facility.

Competitor	Key Areas of Competition	New Programs and Facilities	Risk to Market Share
Primary Competitors
Hanover County Hospital	Facility upgrade Quality scores	Significant renovation of core hospital to update aesthetics Added new wide-bore MRI machine last year Reaches the 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 Stevens	Physician clinics Financial stability	E-visits with specialists Low debt and high cash on hand	Drawing patients out of primary and specialty care at Stevens Ability to cash flow projects
Secondary Competitors
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 physicians’ practices

Technology

A competing hospital has added e-visits for physician practices, which is causing a shift of patients to the competitor hospital’s physician practices.

Regulatory Changes

Health care reform through the Affordable Care Act 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. Stevens District Hospital struggles with accommodating patient scheduling requests to establish care with a primary care physician.

Plan

Planning Components Explanation
	Goal	Objective	Actions
Definition	Organization goals that cover broad strategic issues, such as quality, finances, growth	Broad action items that address organizational goals, such as increasing market share, increased use of technology, increased physician satisfaction	Action item that meets an objective, such as implementing EMR, renovating physician lounge, increasing marketing for specific products
Examples	– Improve HCAPS scores by 5% – Improve operating margin by 3% – Increase market share in 96103 zip code by 5%	– Improve emergency department patient satisfaction survey by 5% – Grow urgent care visits by 10%	– Implement urgent care center in north zip code – Purchase tablets for physicians for EMR rounding
Measurement	– % increase in operating margin – % change in market share	– % change in ED satisfaction survey – % change in urgent care visits	– Number of patient visits at new urgent care center – % increased use of EMR

Financial Summary

	This year	Last year
Operating Revenues
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
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
Income from operations	16,063,127	22,571,501

96101 is Stevens District Hospital zip code

94963 is major competitor hospital zip code

 

Projected Payer Mix 5-years

 

Current Payer Mix

 

Percentage of Population by Insurance

 

 

Copyright © 2017 by University of Phoenix. All rights reserved.

_1521445885.xls

Chart1

0.42	0.42
0.12	0.12
0.16	0.16
0.2	0.2

Column2

Column2

[], 52%

Sheet1

Column1	Column2
96101	42%
93921	12%
92106	16%
94963	20%

_1521446193.xls

Chart1

4458	5147
20930	26292
405	472
6365	7284

Last year

This year

Volume changes last year versus this year

Sheet1

	Last year	This year
Admission	4458	5147
ER visits	20930	26292
Deliveries	405	472
Surgeries	6365	7284

_1521447893.xls

Chart1

0.35

0.3

0.24

0.09

0.02

US Age Distribution 2010

Sheet1

	US Age Distribution 2010
Medicaid	35%
Medicare	30%
Commercial	24%
Uninsured	9%
Other	2%
	To resize chart data range, drag lower right corner of range.

_1521445882.xls

Chart1

0.15	0.26
0.05	0.12
0.12	0.22

5 yrs ago

5 yrs ahead

Chronic Disease Predictions

Sheet1

	5 yrs ago	5 yrs ahead
Obesity	15%	26%
Diabetes	5%	12%
Heart Disease	12%	22%

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