Strategic Management and Marketing Analysis of Kansas University Hospital

Strategic Management and Marketing Analysis – Report

Introduction (organization, serviceproduct line)

The organization that will be used for the marketing strategic development and analysis is the Cardiology program for the Kansas University Hospital. The hospital, is a nonprofit academic medical center located in Kansas City, Kansas (and borders Kansas City, Missouri) in the United States. It is an independent entity that receives no funding from the state of Kansas. The hospital is affiliated with the University of Kansas Medical Center, which comprises the schools of medicine, nursing and allied health. The University of Kansas Health System combines education, research and patient care. Physicians represent more than 200 specialties. The specialty that will be evaluated is the Cardiology services within the Kansas Hospital organization.

In the evaluation of this specialty area the Simple-Trend Identification and Extrapolation method will be used for this marketing tool in which there will be an evaluation the major issue of Cardio Vascular Disease (CVD), which is the primary reason for Cardiac Heart Failure (CHF) or as most commonly known as heart attacks.  According to the Center for Disease Control (CDC) (2017), about 610,000 people die of heart disease in the United States every year, this equates to about 1 in every 4 deaths. CHF is a growing healthcare burden and one of the leading causes of hospitalizations and readmissions and preventing the readmissions for CHF patients is an increasing priority for Health care organizations, clinicians, and various stakeholders. According to AHA (2017), from 2009 to 2012 the median risk-standardized 30 day readmission rate for CHF was 23.0% and by 2030, 43.9% of the US adult population is projected to have some form of CVD readmissions. This is why these measures should receive particular attention from healthcare management, providers, and policy makers as they are perceived as a correctable source of poor quality of care and excessive medical spending.

Heart failure (HF) is a chronic and progressive condition in which the heart muscle is unable to pump enough blood to meet the body’s need for blood and oxygen and is a leading cause of hospitalization and health-care costs in the United States. Placement into class I, II, III, or IV of the New York Heart Association functional classification depends on the severity of patient symptoms and physical activity limitations.

The identification of CHF are associated with risk factors that are usually diagnosed by a physician and self-reported by the patient. According to Wan, Terry, & Cobb (2017), in the research of “Strategies to Modify the Risk of Heart Failure Readmission,” concluded that the major risks for CHF are patients who receive treatment for diabetes, patients that have hypertension, patients that have obesity that is measured by a BMI of 30 or greater, finally lower socio-economic status, and finally history of smoking patients.

As you can evaluate from the diagram provided above, Dunlay and Roger (2014), indicated in their research that diabetes is evident in 18–23% of CHF patients, hypertension is present in 44–91% of cases, obesity is present in 25% of incidences, and a history of smoking is associated with 51% of incidences of CHF. These measurements of environmental data on risk factors show the relevance that each indicator has a significant impact on the increased risk for the CHF.

The probability associated to the continuance of the rise in the trend issues associated with CHF is significant in all categories, but most specifically, obesity will increase the prevalence of coronary artery disease by 5%–16% by 2035 (Lee, et al., 2009). All of these are prevalent in the lowest income category by 27% and in the lower middle-income category by 37% (Lee, et al., 2009).

impact that increased CHF patients have on any organizations relates to the one of the provisions in the Affordable Care Act (ACA), established the Hospital Readmissions Reduction Program, which required the Center for Medicare and Medicaid Services (CMS) to begin financial penalizing hospitals with higher than expected 30-day readmission rates for CHF, pneumonia, and acute myocardial infarction (CMS, 2018). Beginning in fiscal year 2013, two-thirds of hospitals who were identified as underperformers and faced a financial penalty of up to 1% of their total Medicare base payments, which was increased to a maximum 2% penalty in 2014 and 3% for fiscal year 2015 and onward. (Dunlay and Roger2014). This financial concern can be significant as Medicare pays a significant amount of today’s total healthcare for qualified individuals, thus hospitals rely on the reimbursement from the government agency and should then adapt to the reimbursement regulations and standards that are implemented for those patients.

Delivering high-quality, patient-centered care for the growing population of patients with HF continues to represent a challenge but there is great potential for more cardiovascular disease and worsening disparities in the future unless preventive efforts are directed toward these trending increased probability groups. With the understanding of the trending markers care providers can select and delegate special interventions to encourage healthy eating and exercise and the provision of affordable preventive strategies, such as smoking cessation therapy, to at-risk groups may help to reduce these disparities and decrease the probability of overall CHF and subsequently decreased penalties by the CMS and increased the overall health to the patients.

Process and findings of external environmental analysis

The prime hospital competitors are HCA Midwest Health System, which consist of a 10-hospital regional system that is part of Nashville-based HCA; University of Kansas Hospital, and St. Luke’s Health System, which has eight hospitals out of its 11 in the Kansas City area (Galloro,2017). The smaller competitors are Sisters of Charity of Leavenworth Health System, with hospitals in Leavenworth and Kansas City; and two-hospitals Truman Medical Centers and for pediatric care, there is 263-bed Children’s Mercy Hospitals and Clinics, Kansas City, Mo. Each of these hospitals provide a Cardiology service, and besides the Children’s Mercy hospital that primarily only serves adolescents children. Each of these organizations in the local region area of Kansas City are in contention with the University of Kansas Cardiology practice.

One of the primary competitive cardiology practices in the Kansas City region is the St. Luke’s Mid America Heart institute. This organization has established themselves with

with four hospital locations in the Kansas City metro area and six outreach locations (SLH,2018). The medical team consist of 45 board-certified clinical cardiologists and physicians who are certified in specialty areas of cardiology, including interventional cardiology, echocardiography, nuclear cardiology, preventive cardiology, electrophysiology, and advanced heart failure and transplant and work alongside St. Lukes Hospital (SLH) Cardiothoracic surgical services (SLH,2018).  They are a training facility for fellows in cardiology and are a research and development facility just as Kansas University Cardiology and has been ranked No. 38 nationally by the U.S. News & World Report out of all cardiology programs.

While the SLH cardiology practices does rank amongst the top 50 in the country they also do come in second when compared to the local Cardiology programs as The UKH Cardiology program is ranked 24^th by the U.S. News & World Report and SLH hospital comes in second out of the overall hospital organizations in the region, as UKH ranks number one (Jeffery & Vaupel, 2018). This gives the public perception that the UKH Cardiology is a better cardiology program due to the ranking by a national ranking system.

The second major competitor of Cardiology programs in the Kansas City regional area is the HCA hospital systems that are comprised of many different hospitals that are directed by the HCA leadership as the area’s largest healthcare network, with more than 9,000 employees and 150 locations including seven hospitals and outpatient centers, clinics, physician practices, surgery centers in the Kansas City region (HCA, 2018). These locations are located throughout the Kansas City region and is a significant competitor when it comes to the availability and access to all the different areas that each of these cardiology practices are located. While they do not have the accolades as the UKH or SLH organizations do they do have the access to individuals that rely on instant access and convenient as a major determinant in their choice of service.

The level of rivalry among existing organizations

There is a strong rivalry among the number 1 UKH and number 2 SLH cardiology services in the Kansas City region and have large competitor with a large number of hospitals and cardiology programs around the regions with the HCA hospitals. These established Cardiology practices have a large organizational size, but a relatively low level of industry growth due to the demands and size of the specialized field in the region that have an absorbent amount of resources to expand technologies for research and development.

 

The threat of substitute products and services

Due to the scale of the current cardiology practices in the region a threat of substitute produces and services would be extremely unlikely. The cardiology practices currently provide a list of specialty services. These services include but not limited too; Adult congenital heart disease, Athletic Heart Clinic, Atrial Fibrillation Clinic, Cardiac rehabilitation, Cardiothoracic surgery, Cardiovascular critical care, Cardiovascular imaging, Cardio Scan, Cardiac CT, Cardiac MRI, Echocardiography, Nuclear stress test, PET scan, Electrophysiology, Extra corporeal membrane oxygenation (ECMO), Heart disease in pregnancy, Heart failure management, Heart transplant, Interventional cardiology, Structural cardiology, Valve Program, Vascular Program, Vein Program, and Ventricular assisted devices. These services would be highly unlikely to replicate to a smaller cardiovascular clinic and subsequently would need to refer the patients with the extensive issues to a highly established and specialized cardiology practice where the individual is more than likely to remain a patient and refer their family and friends.

Along with over utilization of many larger cardiology program in the immediate vicinity there are also a large amount of accreditation requirements for Medicare and Medicaid reimbursement with a large ticket items such as EHR and medical equipment start up along with the understanding of all of the accreditation requirements in order to keep the practice in compliance with local and federal regulations.

The bargaining power of buyers

According to Ginter, Duncan & Swayne (2013), If the buyers are powerful, then the competitive rivalry will be high and the buyers of the products and services will try to obtain the lowest price possible while demanding high quality and better service. As we have concluded the rivalry between many cardiology practices are very high with the large scale of established highly regarded practices that have a long-standing reputation with the community. This allows the patient to pick and choose which cardiology service that they would like to service their needs.

Bargaining power of suppliers

The bargaining power of the suppliers can affect the intensity of competition through their ability to control prices and the quality of materials they supply suppliers can exert considerable pressure on an industry (Ginter, Duncan & Swayne 2013). The power of the industry is reliant on lower supply of the product. But, in this case there is little bargaining power of the supplier unless there is a special procedure that some cardiology clinics or hospitals do not offer, such as Heart Transplants. SLH  Mid America Cardiology is the primary program that has offered this services longer and better than another program in the immediate vicinity, UKH Cardiology has been advancing this practice in the recent years and joins the ranks of the very few hospitals in the region to be able to perform such extensively technical and exhaustive procedures.

The current analysis established the highly recognized and reputable specialized cardiology practices in the Kansas City region with a higher level of competition for the specialized field. The findings in the structural analysis showed a clear view of the regional competitions and the insight to a direction of growth for the organization that can be directed to a financially or quality driven outcomes geared to efficiency and comparative prices due to the large amount of competition in the area. The end product of this tool has revealed that the organizations will need to rely on establishing highest quality of care with specialized services and marketing to the public.  The standings in which these services are being increased will be shown in the marketing strategies that can expand the practice in a very competitive, slow growth market.

Process and findings of internal Value Chain analysis including identification of potential competitive advantages

The Value Chain Analysis is an internal processes and activities that an organization performs “to design, market, produce, deliver, and support its product (Buttigieg, Schuetz, & Bezzina, 2016).” According to Ginter, Duncan & Swayne (2013), the Value Chain is divided up into the Service Delivery Activities and the Support Activities. The Service Delivery activities for the University of Kansas Cardiology (UKHC) services would be broke up into Pre-service activities, Point-of-service activities and after-service activities (Ginter, Duncan & Swayne, 2013).

The Pre-service activities that are associated with this specialty would rely on the marketing, research and development that the organization has accomplished geared toward the target market population within the community of Kansas City. The cardiology services provided are promoted with the strengths that the facility has determined and facilitated over the years of service. These are related to the top 25 ranked overall cardiology practices that This is coupled by competitive pricing that is comparable to the local market and the competitors in the local region, primarily St. Lukes Mid America Cardiology services and the HCA Cardiology practices.

The Point of service occurs at the point of care that actually occurs which includes the clinical operation in which UKHC improves their quality of care toward patients and can show the process improvement by documented quality measures that have been improved over patient satisfaction surveys. Along with a constant upkeep of a modernized building and state of the art technology to keep the facility within a competitive state with the surrounding market.

The follow up measure of the service delivery from the Value Chain is the ability of UKHC to follow up with the clinical aspect of the patient through their innovative tracking and appointment scheduling, while systematically electronically communicating with the patients via my chart application and email system for all medical needs and any surveys. This system is also used to help patient track any vital information related to their condition or be in direct contact with any nurse that is available on the service.

The Support activities for the Value Chain is represented by the categories of Organizational Culture, Organizational Structure, and Strategic Resources. The Organizational Culture is to exhibit a national reputation for excellence to provide the most current and effective treatments in a welcoming, professional and caring environment (UKH,2018). UKH vision, mission and values represent the overall commitment to the patients’ health and satisfaction with the services provided. UKH’s goal is to ensure all of our patients have the best possible healthcare experience by receiving quality care and outstanding service (UKH,2018). This will enable all personnel to deliver a world-class patient care to the people of the community that are being served to ensure the excellence of future patient care through exceptional learning, teaching and research (UKH,2018).

The organizational structure for the Cardiology service is an autonomously ran organization that is subject to the values and culture that the overall UKH has established with a  3 part organization structure, consisting of a CardioThoracic Physcians group and Cardiologist  physicians grouped coupled with the 250 individual hospital employees that consist of administration, specialized employees and nurses.

The Strategic resources are established through areas of people, innovation, community and value by ensuring that the mission truly reflected the current purpose and identity and the vision statement stretched beyond the scope of the practices identity and articulate what the future should look like for KU Medical Center Cardiology (UKH,2018).  The 4 areas of resources can be used to “identify how a focus area should intersect mission areas of education, research and health care through mission-based groups and these groups also identified objectives to operationalize each focus area with the mission areas and create strategies to support each key objective” (UKH,2018).

The hospital’s support contributed to the heart programs’ growth by establishing a patient-focused culture. The cardiovascular and cardiothoracic surgery programs were the first service line at the UKH organization to be named to U.S. News & World Report’s “Best Hospitals” list, starting in 2007 (UKH, 2018). They have continued among the nation’s top 50 Cardiology and Heart Surgery programs for 11 consecutive years. The UKHC strength rely on the reputation of the facility and the value and standards in which they follow and lead through. The UKHC program has been ranked 24thby the U.S. News & World Report Best Hospitals. They have maintained a ranking in the top 30 for the past 7 years (UKH,2018). Not only is the Cardiology practice ranked in the top rankings of the country, the UKH system is also nationally ranked in 8 other specialties including Cancer (No. 25), Cardiology & Heart Surgery (No. 24), Gastroenterology and GI Surgery (No. 34), Geriatrics (No. 18), Neurology & Neurosurgery (No. 46), Pulmonology (No. 32) and Urology (No. 17) (UKH,2018). Another strength is the quality of care and specialized care that the UKH serves for the patients as The University of Kansas is one of 70 National Cancer Institute-designated centers in the U.S. The hospital that has received the Magnet nursing designation three times in a row, reflecting the quality of care throughout the hospital, an honor awarded three consecutive times to only 3.7 percent of hospitals nationwide (UKH,2018). These strengths have high value and are very rare to any organization, along with being very difficult to imitate, and has shown the extensive sustainability of the present strengths in order to create competitive advantage.

Finally, the cardiology practice at The University of Kansas Health System is the first hospital in the nation to achieve Joint Commission Comprehensive Cardiac Center (CCC) Certification (UKH, 2018). To achieve the certification, a hospital must demonstrate a combination of compliance with consensus-based standards, evidence-based clinical practice guidelines for cardiac care, and performance measurement and improvement requirements. CCC-certified hospitals must also achieve and/or maintain required Joint Commission Disease-Specific Care requirements, as well as additional CCC Certification-specific requirements (UKH, 2018).

Findings and recommendations of Directional Strategy analysis

The University of Kansas Hospital (UKH) cardiology is established under a set of easy and understandable written strategic plan. The leadership group of UKH set out to change the organizational experience and develop a plan that was simple and had meaning for the entire organization. This is a goal that can create a roadmap that would help guide actions and prioritize resources (KUMC, 2017). The University of Kansas Hospital systems is an education based hospital and has obviously placed major president on the research and education of the community that will increase a sustainable and optimal health care. In Kansas City, this organization is working toward being a world-class academic medical center and destination for complex care and diagnosis. They offer more options for patients with serious conditions because of the expertise and leadership that has been established in medical research and education, and the physicians are researchers and educators expanding the boundaries of medical knowledge. Their major breakthroughs lead to the life-changing treatments and technologies of the future.

The common purpose or mission is the reason that organizations exist in which the full potential of this directional strategy is rarely achieved (Ginter, Duncan, & Swayne, 2013). In UKH mission, the organization will lead to enhance the health and wellness of the individuals, families and communities they serve through: “Providing efficient, value added, effective, patient-centered care and outcomes that are second to none, working with institutions across a continuum of care to advance optimal outcomes, and preparing the future healthcare professionals to efficiently and effectively manage care and outcomes” (KUMC, 2017). These mission goals are used to focus the mission and provide guidelines in which the organization can and should achieve the mission.

According to Ginter, Duncan & Swayne (2013), a vision is an expression of hope and It is a description of the organization when it is fulfilling its purpose and involves creating compelling images of the future and produces a picture of what could be and, more important, what a leader wants the future to be. This is being achieved by working toward leading the nation in caring, healing, teaching and discovering (KUMC, 2017). This reveals the basis of the vision is a broader goal of growth and humanity on a greater scale. These ideals, standards, and desired future states focus on ideals that encourages everyone in the organization to think about the future possibilities.

Upon the values and vision being established the organization has a set of values in which they will use as tools to establish a standard of care in which to achieve the overall mission. According to University of Kansas Health System (UKHS) (2017), These values include; Excellence, Compassion, Diversity, Innovation, Integrity, Evidence-Based Decision Making. By establishing the commitment to the patient, they can make sound decisions on the care. These values are used to redirect the incentives away from volume and toward the concepts of these values. The organization can then can be directed to evaluate the value of care and decision making directed to the patients by the employees, physicians, policy makers, and others.

Based on the given mission an vision the directional strategy should be aimed at growth to move beyond the current achievements associated with the current outcomes, performance, profit or other business measure. Since this cardiology has only just recently established the heart transplant facility, as a whole the organization needs to establish a better portion of these procedure from the Kansas City community. These increased in procedures will follow the values and mission of the organization with the establishment of values to be used as guidelines in these increase in procedures.  Along with the increase in heart transplants the organization will establish a direct communication to patients through the online My Chart application to better our patient’s healthcare experiences with a direct line of communication with our nurses, pharmacy, and physician’s with any questions or to have instant access to their medical records according to the Health Information Patient Privacy Act (HIPPA).

By using these tools, the infrastructure of each department and all areas can represent our commitment to the overall health and satisfaction of the hospital. Thus, establishing the directional goal to ensure that UKH has the best possible healthcare experience by receiving quality care and outstanding service.

Process, findings, and recommendations of Adaptive, Market Entry, and Competitive Strategy Analyses

In the transition into a directional strategy we have evaluated the internal and external evaluations of the University of Kansas Cardiology program, along with the vision and mission of our hospital. A major directional strategy is based upon the organizations vision and mission, which the vision is to lead the nation in caring, healing, teaching and discovering with the mission of leading to enhance the health and wellness of the individuals, families and communities they serve (Ginter, Duncan & Swayne, 2013). These tools can provide the directional strategy on whether the organization wants to grow, become smaller, or remain about the same (Ginter, Duncan & Swayne, 2013).

Through the evaluation of this very well-established Cardiology program that is ranked the number one cardiology program in the region and the 24^th ranked in the nation, does have a weakness, as it lacks the ability to provide enough heart transplants for the community of Kansas City, that is serves. The primary competitor St. Luke’s Hospital performed 44 heart transplants in 2017, the most in this region and was the 10th busiest adult transplant center in the country and University of Kansas Hospital only performed 4 in 2017 (McGuire, 2017).  Even though there is a large number of transplants being accomplished in the Kansas City region there is still a larger demand and an overabundance of supply of hearts in our region that are not being utilized by our community. According to McGuire (2017), the Kansas City area shipped about half its donor hearts to other regions due to the lack of heart transplant programs in Kansas City region. Having a well-established second heart transplant location in the Midwest would help keep some of those available hearts in the community for local patients in need.

This overview of the program can lead us to the Product life cycle analysis in which two important questions for strategy formulation. The first is, “In what stage of the life cycle are the organization’s products and services?” and “How long are the stages (and the life cycle itself) likely to last (Ginter, Duncan & Swayne, 2013)?” To answer the first question of what stage of life cycle this product we can evaluate the current stage of the heart transplant program of UKH, which is strategically in the introductory stage as there is very low transplants being performed, thus profits are going to be very diminished or nonexistence. Next there is only one other competitor in the region with a large number of demands as in 2016, a national record of 3,191 patients received new hearts and more than 4,000 others remain on waiting lists, including four at KU Hospital and 16 at St. Luke’s (McGuire, 2017).

The stages of this life cycle is not an easy and easy way to depict into steps of success, but the major portions of steps for establishing this program have been done and now the program is needing major recruitment for cardiologist that specialize in heart transplants from an established and successful program. Along with the recruitment for more transplant doctors the current physicians must be actively establishing techniques and protocols for all aspects of these procedures to ensure the safety of the them prior to expanding in volume and efficiency.

The establishment of this heart transplant program and its survival in its infancy has been directly tied to the monetary philanthropic support amounts from the local community to the cardiology department. According to Twiddy (2012), the Kansas City, Kan., facility began the process of creating the program after receiving a $1.5 million gift from Dr. William Reed, chairman of the hospital’s Department of Cardiovascular Diseases, and his wife, Mary Reed in 2012. Then just this past month they received another gift of $2 million on Tuesday from Cloud L. “Bud” Cray, Jr., chairman emeritus of MGP Ingredients in Atchison, KS, and his wife, the late Sally Cray (Reuter, 2018). These donations are the forefront of the program and the backbone of the progression of the advancement of these procedure. These donations are how the  program can exist in the beginning stages of development and will continue progress until it is a forefront of the practice and the number one heart transplant in the region.

Findings and recommendations for Implementation Strategies including potential areas of operational risk

Each area of the value chain was evaluated during internal analysis as part of situational analysis and the conclusions used as inputs to strategy formulation. The Support activities for the Value Chain is represented by the categories of Organizational Culture, Organizational Structure, and Strategic Resources. The Organizational Culture is to exhibit a national reputation for excellence to provide the most current and effective treatments in a welcoming, professional and caring environment (UKH,2018). UKH vision, mission and values represent the overall commitment to the patients’ health and satisfaction with the services provided. UKH’s goal is to ensure all of our patients have the best possible healthcare experience by receiving quality care and outstanding service (UKH,2018). This will enable all personnel to deliver a world-class patient care to the people of the community that are being served to ensure the excellence of future patient care through exceptional learning, teaching and research (UKH, 2018). The strategic decisions is made move the organization closer to accomplishing its mission and vision, which was to lead to enhance the health and wellness of the individuals, families and communities they serve through: “Providing efficient, value added, effective, patient-centered care and outcomes that are second to none, working with institutions across a continuum of care to advance optimal outcomes, and preparing the future healthcare professionals to efficiently and effectively manage care and outcomes” (KUMC, 2017).

These mission goals are used to focus the mission and provide guidelines in which the organization can and should achieve the mission. Based on the given mission and vision the directional strategy is aimed at growth to move beyond the current achievements associated with the current outcomes, performance, profit or other business measures in Kansas Cities demographics. Since this cardiology has only just recently established the heart transplant facility, as a whole the organization needs to establish a better portion of these procedure from the Kansas City community. These increased in procedures will follow the values and mission of the organization with the establishment of values to be used as guidelines in these increase in procedures.

Implementation strategies

To be able to better understand the purpose of Implementation strategies. Implementation strategies can be defined as methods or techniques used to enhance the adoption, implementation, and sustainability of a clinical program or practice (Proctor, Powell, & McMillen, 2013). Effective and efficient operations make strategies work. Along with the pre-service, point-of-service, and after-service strategies, the value-adding support strategies should be developed and specified similar to the service delivery strategies, the value-adding support strategies are implementation strategies directed toward accomplishment of all the other strategies including the directional, adaptive, market entry, competitive, and service delivery strategies (Ginter, Duncan, & Swayne, 2013).

Service Delivery Strategies

The current Support Strategies of the heart transplant program of UKH, which is strategically in the introductory stage as there is very low transplants being performed, thus profits are going to be very diminished or nonexistence. Next there is only one other competitor in the region with a large number of demands as in 2016, a national record of 3,191 patients received new hearts and more than 4,000 others remain on waiting lists, including four at KU Hospital and 16 at St. Luke’s (McGuire, 2017). Consequently, waiting times continue to increase and can be beyond a year even for patients considered to have the most urgent illness and the number of candidates added to the waitlist every year has increased by 34% since 2003 and is almost twice the number of hearts actually implanted, which has not significantly changed for the past 15 years (Hsich, 2016).

Financially this program has been funded by philanthropic individuals as the Cardiology program has received $1.5 million gift from Dr. William Reed, chairman of the hospital’s Department of Cardiovascular Diseases, and his wife, Mary Reed in 2012. Then just this past month they received another gift of $2 million on Tuesday from Cloud L. “Bud” Cray, Jr., chairman emeritus of MGP Ingredients in Atchison, KS, and his wife, the late Sally Cray (Reuter, 2018). These donations are the forefront of the program and the backbone of the progression of the advancement of these procedure.

Action Plans

The organization will aim to establish highly skilled cardiothoracic surgeons and develop a financial structure that will allow the organization understand the profitability by diagnosis-related groups, payers, physicians, and service lines before they undertake a new service-line strategy. Standard billing approaches usually make revenue numbers straightforward, but costs and profit margins are another thing. For many hospital services, each patient and procedure is different; therefore allocating costs is far more complicated and expensive for them than for manufacturers or retailers. An accurate cost-accounting system is a prerequisite for effective service-line planning such as a heart transplant program. With the implementation of a Clinical Process Innovation (CPI), which is defined as “the generation, acceptance, and implementation of new ideas, tools, and/or support systems aimed at improving clinical processes and, ultimately, patient care.”(Ginter, Duncan, & Swayne (2013), the program will need to establish the Experience of participants, Process used to establish the program, the impact of the transplant program on the personnel and facility, and finally the future of the program and industry.

An after-service evaluation includes follow-up (both clinical and marketing), billing, and follow-on activities. They are sometimes referred to as “back-office strategies” and are often the final impression (contact) that a customer has with the health care organization” (Ginter, Duncan, & Swayne (2013).  When it comes to performance, most hospitals track only gross patient volumes, net revenue, and, sometimes, hospital-wide profit margins. But to ensure that a service-line strategy is working, there must also track patient-level performance. (Baghai, Levine, & Sutaria, 2008).

For every patient admitted and diagnosed, a hospital might assign a score indicating the clinical outcome and monitor both the cost to treat the patient and the patient’s total charges. These cost-accounting figures, plus yields from managed-care contracts, are vital to tracking a hospital’s progress. Furthermore, because service-line strategies may take years to implement and show results, it is important to track process milestones (such as the recruitment of key physicians) and traditional measures such as profit margins or the total volume of cases.

Based on all of the following results of the comparison of the current situation and what strategic managers want the organization to be, value chain components will need to be maintained to carry out the strategy of clinical process innovation to add value to the direction of the organization.

Recommendations for Action Plans and Contingency Planning considerations

To develop an action plan of the strategic initiatives we must first define our objectives that abide by the Specific, Measurable, Attainable, Reasonable, and Time sensitive (SMART) guidelines. The first initiative to achieve is to establish a 100% increase in highly skilled cardiothoracic surgeon in the next year that are capable of heart transplants. Currently the program has only one cardiologist that is capable of performing this procedure.

Another objective would be to decrease wait times for the heart transplant waiting list by increasing our heart transplant surgery totals for the year by 100%. Currently there are 18-20 people waiting on heart transplants in the Kansas City region alone, with a wait time of a year or more. This is due to only one program able to complete this highly skilled and dangerous procedure.

Finally, the last objective is to be Centers of Medicare Systems (CMS) compliant through the evaluation of a transplant program’s compliance with Medicare requirements by being United Network for Organ Sharing (UNOS) within the next 3 years. Compliance can be established by providing background and determine compliance with the program’s OPTN membership, submission of forms to OPTN, clinical experience (volume), and outcomes, as applicable (DHHS,2018). Establishing these attainable goals, the (CMS) will share this information with either the State Survey Agency or CMS’ Contractor and incorporate this into their onsite evaluation of compliance with the Medicare CoPs thus, providing a sustainable reimbursement for the program.

According to Ginter, Duncan, & Swayne (2013), contingency planning is incorporated into the normal strategic management process at any level and is alternative plans that are the result of strategic thinking and provide leadership with a different course of action until further analysis can be undertaken and a more appropriate strategy is adopted. When considering the direction of the Cardiology practice and the advancement of the heart transplant procedures, the alternative contingency plan should revolve around appropriateness of the patients on the transplant list, combined with the possibilities of the possibility of treatment of heart failure with medical therapy and or Left Ventricle Atrial Devices (LVAD) that can increase life expectancy without surgical intervention that require cadavers.

Summary (expected outcomes, viability of recommended strategic and marketing initiatives)

References

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Reuter, E. (2018, July 3). A heartfelt gift: KU Health System gets $2M from former MGP chairman. Retrieved from https://www.bizjournals.com/kansascity/news/2018/07/03/ku-health-cloud-sally-cray-cardio-oncology-gift.html

Twiddy, D. (2012, April 23). University of Kansas Hospital restarts heart transplant program. Retrieved from https://www.bizjournals.com/kansascity/news/2012/04/23/university-of-kansas-hospital-restarts.html

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Reuter, E. (2018, July 3). A heartfelt gift: KU Health System gets $2M from former MGP chairman. Retrieved from https://www.bizjournals.com/kansascity/news/2018/07/03/ku-health-cloud-sally-cray-cardio-oncology-gift.html

McGuire, D. (2017, January 28). New hearts pumping for first patients of revived transplant program at KU Health System. Retrieved from https://www.kansascity.com/living/health-fitness/article129309309.html

Twiddy, D. (2012, April 23). University of Kansas Hospital restarts heart transplant program. Retrieved from https://www.bizjournals.com/kansascity/news/2012/04/23/university-of-kansas-hospital-restarts.html

UKH. (2018, August 1). The University of Kansas Health System Announces Purchase of Great Bend Regional Hospital and Affiliated Clinics. Retrieved from https://www.kansashealthsystem.com/newsroom/news/purchase-of-great-bend-regional-hospital-affiliated-clinics