External Situation / Environment Assessment and Analysis for Hospitals

External Situation / Environment Assessment and Analysis for Hospitals

Reynaldo O. Joson, MD, MHA, MHPEd, MSc Surg

November 6, 2012

In every strategic and annual planning conference of hospitals, there is a need to do an external situation / environment assessment and analysis to identify threats and opportunities outside the hospital and then use these data to formulate general and specific action plans to ensure continuous financial viability and organizational sustainability of the hospital.  (Note: The Threats and Opportunities [TO] are part of the so-called SWOT Analysis.  SW stands for Strengths and Weaknesses.  TO is for external environment [outside the hospital, usually beyond the hospital control] and SW is for the internal environment [usually and must be within the hospital control].   The results of the TO assessment and analysis, though initially done separately from SW, should eventually be correlated and integrated with those of the SW assessment and analysis).

To facilitate doing external situation / environment assessment and analysis year-in and year-out, first, hospitals must come out with a template or standard operating procedures in doing this activity.  This SOP, once established and developed, not only will institutionalize such an important planning activity, but also facilitate updating and monitoring of needed data and continual improvement of the procedures.

Second, the hospitals must establish a system to constantly monitor changes outside the hospital, or the so-called external environment, that may occur anytime and in between set formal planning conferences.   My personal recommendation is to establish a project called Health and Hospital Industry Watch whose primary goal is to monitor occurrence of events outside the hospital (and simultaneously, those within the hospital) that will prompt the hospital administration / management to change its strategic and annual plans on time.

External Situation / Environment Assessment and Analysis for Hospitals

Gather data and monitor changes in the following categories of information: current, trend and projection over long-term (say, next 50 years), medium-term (say, next 6 to10 years), and short-term (1-3 years).

In gathering the data, focus on those with relevance and impact to financial viability and organizational sustainability of the hospital, with primary focus on capacity to achieve the vision and mission of the hospital; co-players (competitors) in the industry; maximal utilization of existing and planned future services; capability to deliver quality and safe services; and expectations from the public, particularly in the catchment community of the hospital.

Global Health

Philippine Health

Catchment Community Health (Region/Province/City)

Competition

Markets (customers)

Economy

Technology

Supplier market

Labor market

Regulatory environment

Political environment

Social environment

Assess the data in terms of risks to the hospital; in terms of potentiality and risk of threats (harmful) or opportunities (helpful) to the business development of the hospital; in terms of risk of destruction to properties and disruption / promotion of services, non-optimal / maximal utilization of services; any and every risk that will affect the continuous financial viability and organizational sustainability of the hospital.

Then, in consideration of the identified risks, threats and opportunities, formulate general and specific action plans to ensure safety and maximal utilization of hospital services thereby leading to continuous financial viability and organizational sustainability of the hospital.

Global Health

Global Demographic Trends

Global Health Services Trends

Value-based healthcare services

Global Health Practices Trends

Minimally invasive procedures

Philippine Health

Philippine Demographic Trends

Philippine Health Services Trends

Philippine Health Practices Trends

Region / Province / City Health

Region / Province / City Demographic Trends

Region / Province / City Health Services Trends

Region / Province / City Health Practices Trends

Threats Opportunities
Competition Strong Competition Weak Competition
Competition with other hospitals No. of hospitals Increasing number Decreasing number
Strengths of competing hospitals (market share; utilization of services; revenues &net income; other performance measures) Strong competitors(Reasons / factors / causes) Weak competitors(Reasons / factors / causes)
Competition with specialists and diagnostic clinics Numbers (particularly those within the 5-km radius) Increasing number Decreasing number
Strengths of the clinics (market share; utilization of services; revenues &net income; other performance measures) compared to hospital clinics StrongReduced pricesSpecial services (home services)

Strong advertisements

Strong marketing

 

Weak
Competition with drugstores and medical supply stores Numbers (particularly those within the 5-km radius) Increasing number Decreasing number
Strengths of the stores (market share; sales; revenues &net income; other performance measures) compared to hospital stores StrongReduced pricesSpecial services (home services)

Strong advertisements

Strong marketing

 

Weak
Threats Opportunities
Markets (customers) Limited quantity Big or huge quantity
Potential Patient-clients (all types) Market (quantity) Limited quantity Big or huge quantity
Insurance patient-clients (inclusive of HMOs) Market (quantity) Limited quantity Big or huge quantity
Corporate patient-clients Market (quantity) Limited quantity Big or huge quantity
PhilHealth patient-clients Market (quantity) Limited quantity Big or huge quantity
OFW patient-clients Market (quantity) Limited quantity Big or huge quantity
Medical tourist patient-clients Market (quantity) Limited quantity Big or huge quantity
Threats Opportunities
Economy Strength Poor economy Strong economy
OFW Market (quantity) Limited Big or huge
Medical tourist patient-clients Market (quantity) Limited Big or huge
Threats Opportunities
Technology Development None or beginning Expanding and advanced
Medical Technology Development None or beginning Expanding and advanced
IT Development None or beginning Expanding and advanced
Threats Opportunities
Supplier Market Availability and Reliability Limited Widely available and reliable
Hospital Supplies
Medical Technology and Equipment
Medical Supplies
Pharmaceuticals
IT
Threats Opportunities
Labor Market Quantity and quality Inadequate and poor Adequate and good -excellent
Physicians
Specialist-Physicians
Nurses
Med Technicians
Rad Technicians
Physical Therapists
Pharmacists
Others
Threats Opportunities
Regulatory Environment Restrictive Non-restrictive
Statutory requirements
DOH
PhilHealth
LGU
Threats Opportunities
Political environment Unstable Stable
Anti-health industry Pro-health industry
Threats Opportunities
Social environment Non-conducive to healthcare delivery services Conducive to Healthcare delivery services
Community physical environment Not safe to healthcare delivery services Safe to healthcare delivery services
Socioeconomic strata Low paying capacity for health needs Good paying capacity for health needs

Hard data to be gathered using the above guidelines (to be refined further).

General guidelines in using the data gathered:

  • Collate and integrate all data.
  • For the health trends, determine what services to maintain, to delete, or to add next year, next 3 years, next 6 years, etc.
  • For the threats, find innovative solutions to convert threats to opportunities for growth (factor in the strengths of the hospital)
  • For the opportunities, find innovative solutions to maximize growth (factor in the strengths of the hospital)
  • Formulate general and specific action plans to ensure safety of the hospital and maximal utilization of hospital services that will be offered, thereby leading to continuous financial viability and organizational sustainability of the hospital.

(To be refined further)

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