In the world of fee-for-service care delivery, linear strategic planning and static annual budgets were standard practice for hospital leaders. Now, with the shift to value-based  health care, a value-driven strategy is required to help organizations understand their current situation and identify future opportunities. The traditional, five-year plan simply cannot support the agility today’s health care organizations demand.

“In this dynamic marketplace, ‘agility planning’ that includes key stakeholder input, data from across the continuum, ongoing performance measurement and contingency plans to address potential market disruption is the new requirement,” said Dan Piro, president, advisory solutions for Vizient. “Agility planning requires both insight and foresight, based on a deep understanding of where the organization is and where it needs to go.”

The agile approach to strategic planning
Agile strategic planning is a combination of traditional planning elements, such as vision and goals. However, agile planning shapes that vision by analyzing vast amounts of market and organizational data. It then establishes short-term goals based on best practices and implements them via ongoing tactical initiatives that are implemented, terminated or modified quickly as new insight and market forces dictate.

Agile strategic planning includes the following four elements:

1. Create the strategy. Agile planning combines sophisticated data analytics and innovative tools to give an organization deep insight into current performance, both internally and externally. This insight, in turn, informs the strategies that determine future market positioning:

  • Organizational assessment: Takes into consideration system footprint, physician alignment and ambulatory market share. Questions to ask include: Where are the growth opportunities? Are they appropriate and sustainable? Is the organization good at providing those services?
  • Market assessment: An organization must understand growth opportunities within the market, and how they compare in terms of performance, opportunities and competition. More ambulatory data must be included in the analysis as the organization’s portfolio and opportunities shift.
  • Strategy formulation and prioritization: Consider which strategies are most appropriate for the organization, given market dynamics and organizational assessment. Prioritizing service offerings, growth initiatives, and overall strategic goals should include service line development and disease-based offerings. The planning process must also anticipate possible disrupters and development of nimble contingency strategies.

2. Develop the plan. When it’s time to actually shape the plan, consider the following:

  • With strategic goals, less is more. Establishing goals is easy. Acting on them is the hard part. Focusing on a small number of goals (five to 10 is ideal) increases the likelihood of success.
  • Focus on high-leverage opportunities. Effective strategic goals concentrate on high-leverage opportunities, because pursuing the right things allows an organization to achieve goals faster.
  • Be evolutionary and revolutionary. Incremental, evolutionary goals are achieved through continuous improvement. Breakthrough revolutionary goals move organizations into greater innovation and creativity. Organizations need both.
  • Measure for accountability. Nothing gets done unless someone is assigned to do it. Link executives to goals; link initiatives and tactics to departments and units. The result? Horizontal responsibility for support and oversight removes roadblocks and streamlines progress. Vertical responsibility drives execution, with each initiative or tactic contributing positively to the achievement of at least one strategic goal and impacting at least one key performance measure.

3. Connect the data. Performance improvement and accurate forecasting start with deep visibility into current organizational and market performance.

“To understand the current state, an organization needs robust clinical and business analytics tools and a shared data platform that connects utilization and supply costs to clinical outcomes at the service line, physician and patient levels,” continued Piro. “The result is a granular, current-state view that will help the organization improve performance on all fronts.”

Performance is improved:

  • Operationally by standardizing procurement and measuring compliance on utilization initiatives to realize cost savings faster
  • Financially by linking outcomes to resource choices, helping clinicians identify and support opportunities to reduce supply chain and pharmacy costs
  • Clinically by helping the organization assess risks, eliminate variation in services, and manage care pathways to deliver higher quality, more effective patient care

4. Monitor the progress. Progress should be tracked and reviewed on a regular basis. Ongoing review at each organizational level creates an interlocking system of accountability. Senior leadership communicates goals to front-line clinicians and staff who monitor and measure their progress in real time. This up-to-date information flows back to senior leaders, closing the loop for controlling and fine-tuning the entire process.

Feedback frequency varies by organizational level as follows:

  • Daily progress evaluation on the front line – where activities and outcomes occur constantly and quickly – is critical for prompt process adjustments that improve patient care.
  • Weekly department walk-throughs allow leaders to observe front-line staff where they work, which allows leaders to address issues before they escalate into problems.
  • Monthly department walk-throughs are enough for senior leaders, who typically oversee a much wide swath of the organization.

Progress checkpoints and reviews at each organizational level create opportunities to adjust tactics and their associated operational details, as well as reallocate resources if necessary to ensure the right work is being done to address key priorities.

The age of agility
The formula for agile strategic planning? Sophisticated clinical and business analytics used to monitor and manage today’s operational performance — plus advanced tools and innovative methodologies to forecast tomorrow’s potential.

“In an industry evolving at the speed that health care is, agile planning is the only way to ensure your organization is around to be managed in the future,” concluded Piro.

To learn more about how Vizient can help you create strategic plans that bring clarity, focus and enterprise-wide alignment, click here.

Published: February 14, 2017