This report examines Cabarrus Memorial Hospital implementing a full-service cardiac surgery program. The report will identify the key issues to include internal and external opportunities and threats, and it is necessary to point out that the main reason for open-heart surgery strategic plan development was the fact that patients had to go to other hospitals for similar services. Such transfers were extremely dangerous for their health, and they needed an immediate reaction to an acute state. The “continuity of care for the cardiology patient was critical”. The top management aimed to minimize patient transfers and provide stability in choosing the staff, technology and equipment. Establishing a full-service hospital was the main idea of the further logical development of the Cabarrus Memorial Hospital. Therefore, its mission complies with the program of open-heart surgery. Key Issues
The lack of open heart surgery program at Cabarrus Medical Center results in requiring patients who require open heart surgery or coronary angioplasty services to transfer to another hospital, delaying necessary treatment and causing anxiety and hassle to the patient and their family. Should the current mix of cardiac services be expanded to include open heart surgery? Are there adequate patient volumes in the hospital’s service area to support an expansion effort? Is there sufficient justification to obtain the required Certificate of Need from the North Carolina Department of Health and Human Services? Is there sufficient revenue to cover the costs associated with the required construction, renovation, medical equipment and staffing? Is there sufficient organizational leadership available to champion the initiative and improve the likelihood for successful implementation and development? Situational Analysis
Cabarrus Memorial Hospital is a 457-bed hospital that has served Cabarrus County since it opened for patient care in July 1937. Throughout the years, it has grown in response the needs of the community it supports by increasing its size and the services provided. To determine whether there was sufficient demand in the service area to support expansion of the current cardiac services, a number of factors were considered. These factors included primary and secondary service areas based on historical data; population growth projections; population epidemiology; availability of existing open heart surgery medical centers; accessibility to cardiac surgery programs; continuity of cardiology care; and the rate of demand for open heart surgery. A summary of the various data is included in Appendix A.
For this initiative, the service area was defined as Cabarrus, Rowan, Stanly, Union, Mecklenburg and Iredell counties (see Exhibit 1, Appendix A). A study of the hospital’s patient database noting the patients’ residential address provided data on the location of current patients and the distribution of patients who had received heart catheterization treatment (see Exhibit 2, Appendix A). Based on epidemiological studies, a proposed open heart services population was developed (see Exhibit 3, Appendix A). To determine the possible future utilization rates, a population growth projection for the service area (see Exhibit 4, Appendix A), projected growth rates for the at-risk population (see Exhibit 5, Appendix A) and the heart disease mortality rates (see Exhibit 6, Appendix A) forecast the expected demand. None of North Carolina’s 16 existing open heart surgery programs currently in operation were located in the Cabarrus Memorial Hospital service area.
The closest facility was located in Charlotte, approximately 25 miles away. In addition, patient surveys suggested that patients preferred not to go to the Charlotte metropolitan area for health services primarily due to increased traffic congestion and the desire to stay close to home. Continuity of care for cardiology patients is deemed critical. Quality is enhanced when patient transfers are minimized, avoiding delays in providing care as well as the inconvenience of the patient and family support having to move to a different location in the midst of an intervention. This proposed expansion would continue a trend of the hospital increasing cardiac services to improve the continuity of care, the quality of care and patient satisfaction. Just two years previously, the cardiac catheterization program had been established and implemented.
Strategy Formulation begins with the Directional Strategies. Directional Strategies include the Mission, Vision, Values and Goal Statements. The Directional Strategies set the framework for subsequent decision making. Cabarrus Medical Center’s mission is to “create and operate a comprehensive system to provide healthcare and related services, including education and research opportunities, for the benefit of the people we serve” (Cabarrus Medical Center, 2012). The vision statement is “to be recognized as a leader in the transformation of healthcare delivery and chosen for the quality and value of services we provide” (Cabarrus Medical Center, 2012). The values espoused by the organization “recognize that employees are our most valuable asset” and assert that successful employees need to strive for four core values for the organization to be successful: Caring; Commitment; Integrity; and Teamwork.
The Strategic Goal that will focus the Strategy Formulation efforts is to “expand the current mix of cardiac services to include open heart surgery in the next three years” (Cabarrus Medical Center, 2014). Given these Directional Strategies to guide the effort, the next requirement is to identify the Adaptive Strategy that best meets our external environment, internal capabilities and competitive analysis. Building on the Directional Strategies as a guide, it is in the best interest of Cabarrus to choose an adaptive, market entry, and competitive strategy that will highlight the products they offer, including the introduction of the cardiac care unit. It is the recommendation that Cabarrus implement the Related Diversification strategy, with the implementation of this strategy, it affords the organization the opportunity to add new related products or service categories, although this strategy often requires the establishment of a new division, Related Diversification highlight and build upon the external environment, internal capabilities and competitive analysis.
Also, with the implementation of this strategy, Cabarrus can cross-subsidize one product with the surplus of another. This way, companies with a very diverse portfolio of products catering to different markets may potentially grow in power, and be able to withstand a prolonged period of price competition etc. When having subsidized one product for a substantial period of time, the company might possibly be able to win a monopoly, making it the only supplier in the respective market. Upon establishment of the adaptive strategy, it is beneficial for Cabarrus to adopt a market entry strategy that is advantageous to the adaptive strategy. Based on the adaptive strategy selected, it is determined that in order for the organization to see any level of success the Internal Venture market entry strategy should be executed. The execution of the Internal Venture strategy affords Cabarrus the opportunity to establish an independent with the cardiac care unit, which in turns opens the possibility to develop more products and services, the organization will also enjoy the benefits of the company’s greater resources, brand name and corporate image. Finally, it is imperative for the organization to select the correct positioning and posture that is indicative to the adaptive and market entry strategies.
After thoroughly researching, it is determined that Cabarrus would benefit from implementing the prospector strategic posture, in the current scenario the goal is to find and exploit new products and market opportunities. Choosing this posture will allow a domain that is broad and a continuous state of development. This strategy is beneficial in choosing the positioning that would be conducive to the overall plan. It would value greatly to implement the focus differentiation positioning strategy. Implementing this strategy will allow the incorporation of attributes, such as quality or price, into a product to encourage the intended customers to perceive it as different and desirable. For example, with the introduction of the new cardiac care unit, Cabarrus unique value may be never-fail, treating your heart health one valve at a time. If other healthcare facilities are not meeting these desired goals, you will have a unique advantage against your competition, and will have differentiated your products from those of your competitors.
The following recommendations were made because it is important to point out that the healthcare environment is highly competitive and constantly changing. With the aim to be equal to their competitors Cabarrus Memorial Hospital cannot lose its patients putting at risk their lives. Last year, 292 patients were directed from it to other hospitals for open-heart surgery, because it did not provide a full range of cardiac services to its patients. Therefore, the strategy of the provision of the latter will benefit people in getting continuous treatment and avoiding risks of delayed healthcare services caused by the necessity to be transported to the nearest medical centers. With that said, the above mentioned recommendations are best suited to design a blueprint to ensure a successful implementation of the strategic plan on the table.
A successful implementation strategy helps do things the right way, particularly when entering the healthcare market. An implementation strategy provides a process and an action plan for market entry. Market entry strategy and implementation strategy must work together in order for companies to succeed. A good strategy without an implementation plan can result in disastrous consequences. Therefore, it is imperative for Cabarrus to focus their implementation on the pre-service value adding strategy. This implementation strategy allows the main focus to remain within the marketing of the product through promotion, branding, and setting a specific target market. Implementing this value adding strategies targets the differences that exist in patient expectations for health care service quality that make a customer choose one health care organization over another. Cabarrus’ marketing enhancement will develop a promotional campaign to enhance brand awareness. Benchmarks for Success and Contingency Plans
The benchmarks for success with this proposal are contained in the Implementation Matrix, which details the critical actions necessary to achieve each stated objective, the timeline for action and the responsible individuals. Progress reports will be reviewed by the leadership team on a regular, recurring basis to track progress toward the objectives. Contingency plans have been put into place should assumptions change quickly or dramatically or organizational performance lags. The key issues or events occurring or not occurring will trigger corrective action.