Strategic Planning: Defining Effectiveness and Efficiency

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Answer the following question:

Part I: Define effectiveness and efficiency in your own words using peer-reviewed journal articles for guidance. How do effectiveness and efficiency relate to strategic planning in health care?

Part II:Part II: In the text Mastering Strategic Management of the required reading for Module 1, Professor Henry Mintzberg at McGill University compiled what he termed “the 5 Ps of strategy,” which represent five different ways of viewing or thinking about strategy (Edwards et al., 2014, p. 19). The “5 Ps” consider strategy as a plan, ploy, position, pattern, and/or perspective. Detail and discuss which of these views would be the most effective in health care management. Which view(s) do you feel is/are most important? (Remember to justify your response with information or citations from the Background readings for this module or from the peer-reviewed literature.) As required for all discussion questions, your response(s) must be referenced and supported.

Respond to the two responses:

Response One:

Effectiveness and efficiency are two of the most heavily utilized concepts in most successful industries. Healthcare has in the recent years become much more focused on these concepts especially when considering the advent of the High reliability Organizational concept. For this purpose Effectiveness is ability to achieve and intended goal and efficiency is the ability to perform with the least amount of waste possible. Some of the factors that are most impacted by these are cost and access to care. In strategic health care planning these are vital in establishing policies and procedures. This is one of reasons for such advances in healthcare technology and informatics. “Many healthcare providers do not proactively manage or improve the efficiency and effectiveness of their services with IT. Survival in a competitive business environment demands continuous improvements in quality and service, while rigorously maintaining core values. “ (Chen, 2005)

Of the 5 P’s of strategic planning, I feel that the first “P” Plan is the most important. Taking the perspective of managing a healthcare organization being developed or that has been in existence for a while, evaluation of the plan or procedures in place is important to understand how effective it is. This is also the point that managers have the most control over and have an impact on the other “P’s”. This is to say that a Ploy designed to outwit or out maneuver a competitor is heavily dependent upon understanding one’s own plan as well as that of the competitors. Patterns arise from the Plan initially set in place and the level of consistency is also contingent on execution of the plan and if needed adjusting the plan to improve consistency. Position is something that may be determined more by a consumer and in an organization that is heavily reliant on patient feedback can be limited due to perceptions. Perspective is also impacted by the plan. In an industry with as much variation as healthcare, planning steps which are uniformly accepted and understood by stakeholders within the organization increases the success of the organization and perceptions of the landscape in which it’s established itself. This is important to note as the plan or structure of an organization will often tie into its strategies. “Whereas men may build the structure of an organization, in practice it is this very structure which later constrains the strategic choices they may make.”(Hall, 1980) Therefore, having a plan which allows for flexibility and identifies issues early on can significantly impact an organization in the long term

Response II:

Efficient and effective healthcare system provision is undeniably a worthy outcome of strategic planning. Health care organizations (HCO) are functions of joint operations. HCO success is driven by its ability manage internal factors, and predict/adapt to constantly changing external factors (Thomas 1993). Though organizational goals offer direction, realization of goals is the key to strategic implementation. If HCOs policies and operations do not align with organization’s goal, leaders are unable to make accurate predictions about future operations. Strategic planning forces decision makers to look at the “big picture” versus isolating issues of priority (Thomas, 1993)

Health care leaders seeking solutions to isolated issues often implement new policies before fully understanding problem, or implications of such decisions. There are multiple internal and external factors that affect organizational performance. It is imperative for leaders to outline a plan integrating HCOs mission into a coherent course of action (Coile, 2000). Once a course of action is developed management should revise current policy, or develop new regulations that closer align with its mission. HCOs strengths and weaknesses, and resource availability correlate with operation success. Strategic planning considers a multitude of variables that may hinder, or drive the organization towards achieving its goal.

Increased consumer transparency affords opportunities for more selective healthcare. Therefore, companies must identify which of its services are most marketable and target services with higher demands. Strategic planning allows companies to use resources more efficiently by identifying services that are no longer profitable, based on consumer demands. Cutting funding for services that generate less revenue, increases available funds for higher demand services.

Delivering the right product, to the right consumer group, at the right time depends on consumer knowledge increases operational efficiency. As consumer demands fluctuate, historic policies and operations may no longer be beneficial to productivity. Strategic planning involves constant reevaluation. HCO efficiency is increased as opportunities to eliminate nonprofitable services constantly arise (Thomas, 1993). Leaders regularly reevaluate and revise current operations to meet changing demands. Organizations that routinely use strategic planning and analysis are in better positions to adapt to inevitable changes in the healthcare sector. Strategic planning ensures all stakeholders are working toward one goal; fulfilling organization’s mission. Most importantly, the process helps leaders ensure viability in a market where countless HCOs have failed.

Coile, R. C. (2000). Millennium outlook: Focused factories vs. a global perspective; Frontiers of

Health Services Management, Ann Arbor; Spring 2000; Vol. 16, Iss. 3; pg. 31.

Thomas, A. M. (1993). Strategic planning: A practical approach. Nursing Management. Chicago:

Feb 1993. Vol. 24, Iss. 2; p. 34

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