ARTICULO 6 HOSPITALES

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BUSINESSKaren Hartman

smart strategic planningfor cardiovascular services

AT A GL ANC E> Strategic planning for

cardiovascular servicesshould include formationofacardiovascularadvisory committeecomposed o l keystakeholders.

> The strategic planshould include aninterna l assessment,external marketanalysis, review ofoperations, develop-ment of strategies andinitiatives, and a f inan-cial analysis.

> The organization'smission and vision, aswell as its financialsituation, need tobe considered informulating strategies.

Cardiovascular disease remains the top cause of death in the UnitedStates. As the nations elderly po pulation grow s, the need for advanced cardiovas-cular services, in both urban and comm unity settings, v/ill rise exponentially overthe next decade. Hospital C-suite mem bers should put smart strategic planningfor the cardiovascular services service line on the front burne r. Hospitals thatimplem ent a cardiovascular progra m strategic plan can avoid volume erosion andmaintain profitability.

Cardiova scular services can account for up to 40 percen t of the net revenue of anacute ca re hospital, regardless of its size or scope of services. Successful cardio-vascular programs can he lp make up for revenue declines in a hospital's otherservice areas. Hospitals need to quickly re act to industry changes by retool ingtheir cardiovascular programs to meet changing needs.

The number of cardiac and vascular specialty programs is growing nationwide . Assome states ease certif ica te of need regulations, and with co ntinuing efforts toensure safe clinical p ractice in hospital settings, hospitals increasingly are prov id-ing advanced cardiac and vascular care. As a result, industry co mp etit ion fo r theprofitable cardiovascular patient is on the rise. In fact. The Corazon National Survefor Benchmarking Cardiac Program Performance shows that 64 percen t of the 101national participants plan to add services or programs to their cardiovascular co ntinuum o ver the next year, with m any focused on the vascular and heart failu re specialt ies. The survey also found that 7 8 p ercen t of respondents are planning newspace as a result of facility renovation or expansion. The most comm only identif iedexpansions cited are cath eteriz ation labs and beds devo ted to cardiac p atients.

The Need for a PlanConsider ing the compet it ive environment and the diff iculty involved with crea t inga progressive, but prac tical course of action for a large, complex clinical serviceline such as cardiovascular, the best way to outdistan ce the c om petit io n and be onthe forefro nt of indu stry change is to have a smart strategic plan in place. Effectiveplanning is crit ica l to the smo oth functionin g of this vital clinical specialty, espe-cially when planning for major changes in service offerings or facility design. A formal process can ensure that long -term investments for the cardiac c ontinu umprodu ce lasting results. But this plan needs to be integ rated with the financial planof the organization and /or the capital situation of the cardiovascular service line.


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Hosp itals' capital needs include additional h ospitalcapacity as the elderly popu lation grows, IT upgrades,and the required amen ities o( future cardiacpatientsbaby boom ers.

Strategic planning should include the formation of acardiovascular advisory committee that includes keystakeholders, such as representatives from adminis-trat ion and the m edical staff. This dedicated groupneeds to commit to attending the fa cilitation sessionsand to actively and honestly co ntribu ting to theprocess. This (eat can be diff icu lt to accomp lish giventhe many opinions and potential barriers that canarise v^hen a diverse group of administrators andphysicians come tog ethe r on one project, especiallyone that everyon e may not supp ort from the start. Bycomm unicat ing openly and honest ly the comm itteecan go a long way in generating trust and gaining sup-port . Up-front co mmun icat ion with key stakeholderscan save time and effort and e liminate c onflict. Ensur-ing that all affected parties are informe d of anychanges in responsibility and understand how achange w ill affect them demo nstrates that the lead er-ship is sensitive to everyone's ideas. Arri vin g at a co n-sensus and docu men ting the plans can keep aprog ram o n an established path from year to year.

Strategic Planning MilestonesThe most successful plans begin w ith a time line (usu-ally three to four months) that includes key actions,individuals accoun table, and due dates. The followingmilestones should be comple ted in the strategic plan-ning process.

Internal assessment. Mem bers of the execut ive team,board of directors, medical staff, and managementteam should be interviewed by an unbiased party (i.e.,an outside consultant) as early as possible regardingtheir ideas about the facility's curren t m arket situa-t ion, the unique characteristics of the cardiovascularprogram, and opportunities for cardiac service linegro wth o r expansion, any opera tional issues, andcom mitm ent to planning goals. These interviews canhelp leaders understand the diverse viewpointsinvolved. An evaluat ion of the curre nt co mpet it ion,the external market, and internal cardiovascularoperations and a discussion about pro gram goals and

External market analysis. A marke t share and utiliza-tion data analysis defining the curre nt cardiac servicearea, trending utilization statistics for cardiac proce-dures in the region, predict ing popu lat ion demo-graphics, and presenting mortality and out-migrationstatistics should provide de tail for the past three yearsand anticip ated changes fo r the next f ive years. Thehospital should use this informa tion to pro ject u tiliza-tion and market share, taking into account prac ticeand technology changes and populat ion demograph-ics. The projections should also include any changesexpected due to new compet itors, outreach opp ortu-nities, and physician staffing needs.

Integrating the internal and external analyses willhelp the cardiovascular advisory committee projectvolumes for expanded cardiovascular procedures.

Operations review. A sm art strategic plan also shouldinclude a review of current ope rations related to th eperformance of cardiovascular services, including anevaluation of the progra m and its components and areview of f loor plans to de termin e the impact of anexpansion. This process will identify op portun ities fo r(and sometimes barriers against) change, includingstaffing, organizational structure, technology, andequipm ent. The operationa l assessement should alsotake into acc ount how any changes in services w ill

LOOK ING FORMORE IDEAS?Healthcare financialexecutives discuss waysto improve th e hospital'srevenue by improving theperformance of clinicalservice lines in theHF MA Execut iveRoundtable ImprovingPerformance y^ithClinical Service Lines(www.hfma.org/resource400420.pdf).

The number of open-heart surgery programsand catheterization labsacross the Un ited S tateshas risen drama ticallyover the past twodecades.

GROWTH OF OPEN-HEART SURGERY PROGRAMS, 1985 -2002

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B U S I N E S S

I MP ROV E ME NTSTRATEGIES

Strategies for improvingperformance in cardio-vascular surgery are dis-cussed in HFf^A's rep ortImproving Clinical,Operational, and FinancialPerformance inCardiovascular Surgery(www.hfma.org/Featured Topic/resource/performance_cv.pdf).

affect capacity needs, including beds, cardiac cathlabs, and operat ing rooms.

This approach is unique because the informatio n con-sidered relates to volume and uses a formu la for ca l-culating capacity lo r cardiovascular areas, includinginpatient beds, cardiovascular opera ting rooms, andcardiac cath lab. It is impo rtant to com plete capacitymodels for these areas using proiecte d volumes,lengths of stay, and any resources requ ired for patientturnover. The result should be an accurate est imationol facility levels. For example, the equ ation for deter-mining the space needs and facility design for a car-diac cath lab is:

(num ber of procedures X procedure time inmiriules) + (numb er of procedures X roomturnov er in minu tes) X inefficiency factor /cardiac catb lab operatin g hou rs per year inminutes cardiac catb fabs required

Strategies an d initiatives. Aggreg ated f indings from theinterviev/s and evaluation of marke t, program , andoperations should be presented to the cardiovascularadvisory comm ittee. This information then should beanalyzed in conjunctio n with financial plans and usedto develop a strategic plan for cardiovascular serv-ices that includes:> A v alidation of all planning assumptions to gain

consensus> Endorsem ent by key constituents of the hospital and

medical staff> A draft plan for delibera tion of strategic d irectio n

and priorit ies> A com prehensive final plan that repo rts all f indings

and defines the goals, priorit ies , and recom men da-tions for the developm ent and growth of the cardio-vascular program

> An implementation work plan noting key actions,costs, and time frames for the endorsed strategies

Cardiovasu lar prog ram strategies may include areassuch as leadership, market o utrea ch, physician andhospital partnerin g, space planning, and potentialnew services. The imm ediate focus should be on lead-ership, whic h can be an administrative compo nent o ra physician compone nt or both. Strong leaders areneeded to beg in addressing strategies and imple-menting init iatives.

O ve r the past several years, the availability of manynew practices and technologies have led to the redi-rectio n of cardiovascular programs. For instance, neand expensive technology such as 64-slice imagingequipment and drug-eiuting stents are beingadopted, angioplasty is replacin g open-he art s urgeryin some cases, an influx of capital is being rec eive dfrom physician investors (to specialty hospitals in particular), and angioplasty is becoming available at hos-pitals without o n-site open-heart surgery. Wi th thesemarket dynamics, some cardiovascular programs arefinding their ma rket position has changed dra ma ti-cally over the past few years.

As hospitals develop a plan and set a direction, theyneed to continually refle ct on the committee's vision.What goals are to be accomplished? Wh at is th edesired en d result of the initiative? A vision such asattaining to p 10 0 status for cardiovascu lar services hasfo r a goal not on ly award status, but also optima l clinic acare, ope rationa l efficiency, and patient satisfactionand the program's financial performance can con-tribute to or benefit from these positive achievements.

Identifying a goal is often easier than achieving it.How to reach a goal can be a daunting task, bothfinancially and operationa lly. If cost did not matter,most goals would be easy to attain, but given increas -ing price tags for techno logy, qualif ied staff, and faci l-ity improveme nts, cost always has to be conside red.Indeed, operational and fiscal performance areclosely l inked; thus, the strategic plan must be in syncwith the cap ital plan to align a program's financial andoperat ional or performan ce goals.

Financialanalysis. An analysis of costs related to impmenting the strategic plan is key, so the mon etarycommitment required and the RO I should be detailedin a compreh ensive pro forma . The pro forma shouldintegrate the ma rket, operationa l, and financialparame ters of a cardiovascular p rogram e xpansion,which helps to accurately define the financial invest-ment required to meet the recommende d m arketand strategic objectives. The pro forma uses marketinformat ion, capacity needs, operat ing requirementsrecom me nde d staffing levels, and the financia lparame ters in tandem with the strategic plan.


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BUSINESS

r SAMPLE CAPACITY GRID

Cath Lab CapacityCath Lab Hours of O perationMondayTuesdavWednesdayThursdayFridaySaturdaySundayTotal Time Av ailableProcedure TimesCardiacCardiac CathPCIEP StudiesEPStudvPacemaker ImplantsPacemaker ReplacementsICDPeripheral Vascular ProceduresPVDiaqnosticPV Interventions/DiagnosticTotal Volume/Time ReauiredRoom Turnaround TimeTotal CasesTotal Time Required - New & Existina ProceduresInefficiency FactorSummary Of Cath Lab CapacityCath Suites Required - CardiacCath Suites Required - EP StudiesCath Suites R eauired-PVTotal Suites Required

Average Time perCase (Minutes)3590

1801206015060180

Average Time perCase (Minutes)3020%

Available Hrsper Week8.08.08,08.08.00.00.040.0La b Cases

30010040902010

400501,010

1.010

Y e a r l0.300.250.451.0

Available Minutesper Year24.96024.96024.96024.96024.96000124,800TimeRequired

10.5009.0007.20010.8001,2001.500

24,0009,00073.200

30.300103.500

Assumptions:> 30-minu te room turnover time> 20 % ineHiciency factor applied> 8 hour per day cath lab, M-F

An opera tional assess-ment of cardiovascularservices should take intoaccount an organization scapacity needs for eachaffected area.

Wi th each init iative that the organization endorses tothe strategic plan, any additional revenues, operatingexpenses, and cap ital investments should be esti-mated and placed in a pro forma so that the finan cialconsiderations can be tracke d. A strategy mayrequire a separate cost/benefit study to determinewhe ther it is the right ne xt step for the org anizatio n.For example, if during the planning process, the ca r-diovascular advisory committee endorsed partneringwith physicians as an objective, and many options forpartner ing existed, the committee w ould need fur-ther evaluation o l the type of venture that meets the

vision and the operation al and financial needs of bothparties to make an informe d decision.

O nc e a plan for rea ching an identif ied goa l has beendevelop ed, the initiatives to be implem ented shouldbe organized along a time line, from the easiest taskto the most comp licated . This plan should be reviewedand updated continua lly to ensure that the organiza-tion is on track with the plan, the bud get, and the c ar-diovascular environment. The cardiovascularprogra m should be mo nitored for not only the exten tto w hich it meets the plan's goals, but also the finan-


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B U S I N E S S

CASE STUDY: PROVIDENCE HOSPITALLike many other acute care hospitals, Providen ce H ospital, Co lum bia, S,C,, wasexperiencing increased compe tit ion, physician changes, and the need for facilityupgrades, A four-mo nth strategic planning process determined the impact ofchanging market forces and the optimal positioning of the cardiovascular p ro-gram for future growth and viability and evaluated the existing program compo -nents and space, along with the efficiency of interna l operations and staffutilization. The strategic plan for Providence Hospital's Heart Institute includesmark et, operations, and financ ial assessments for the gro wth and dev elopm ent ofcardiac and vascular services at the facility. The financial investment requ ired fo rmee ting the strategic o bjectives was established, and the plan was implem entedwith rea listic expec tations and costs in mind.One of Providence's key objectives was leadership that would commit to a car-diovascular advisory c omm ittee. This committee provided a forum that wouldengage the program's key stakeholders to regularly discuss and determine thestrategic position of the prog ram, the clinica l success, and any opera tional andfacility changes. Am id a highly com petit ive atmosphere for heart care delivery,the hospital and physicians continue to gain recognition for excellence in cardiacservices. Providence is now the number one volume heart cen ter for open-heartsurgery in the state.

Looking Ahe adLeaders need to think strategically, understand boththe big picture and the intricacies of their local m ar-ket, and assume national and local market conditionswill change continuously. Equally imp ortant, smartstrategic planning for cardiovascular services shouldconsider the organization's c ore mission and vision awell as its f inancial situation. O nly then can leadersmaster the challenges of growing market share with cardiovascular service line that excels in clinical per-forma nce, functions w ith sound fiscal results, and produces high customer satisfaction.

Stakeholders should not focus on planning to theextent that they postpone implem entat ion. As Gen.Norm an Schwarzkoff said, "The truth of the ma tter isthat you always know the right thing to do . The hardpart is doing it." Rem embe r, hospitals that fail to plan,plan to fa i lsKaren Hartman i; president, Corazort Consulting, tnc, Piltsburgh,and a member ot HFMA's W estern Pennsylvania C hapter(khartman@corazon-consulting,com).


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ARTICULO 6 HOSPITALES

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