Background and Challenge
A leading regional hospital system was suffering continual and significant patient volume losses in both inpatient and outpatient procedures, across all service lines, over the previous five years. Profitability was declining, and patients and physicians alike were turning to newly opened hospitals in the region. The hospital system asked L.E.K. to help develop a strategic plan to drive profitable volume through a set of discrete and clearly defined initiatives.
Approach and Recommendations
L.E.K. collaborated with the hospital’s senior leadership to develop a robust, fact-based strategic plan. Work streams included:
- Development of an internal and market fact base to serve as a foundation for decision-making
- Articulation of key structural changes resulting from healthcare reform, changes to reimbursement, and other evolving market dynamics
- Macro-level fact base of underlying demand for the hospital system’s services
- Assessment of the hospital system’s financial performance by service line, payer, etc.
- Assessment of the hospital system's resources, capabilities, and strengths and weaknesses relative to competitors
- Brainstorming, documentation, preliminary assessment, and prioritization of sixteen strategic initiatives
- Development of three priority strategic initiatives: Medicare and Medicaid business enhancement, service line optimization, and physician employment. L.E.K. articulated the following elements for each initiative: description, strategic rationale, capabilities and investment required, high-level financial analysis, risks and risk mitigation strategies, and key implementation steps
- Synthesis of findings and recommendations into a strategic plan for presentation to the board of directors
L.E.K. provided the hospital system with a detailed 3-5 year strategic roadmap aimed at driving profitable patient volume growth. The board of directors adopted the multi-year strategic growth plan and the organization is ahead of schedule on implementing the tactical plans for prioritized strategic initiatives.