CAH HOSPITAL STRATEGIC PLANNING MODEL

1. CAH HOSPITAL STRATEGIC PLANNING MODEL PHIL CAMPBELL, FACHE

2. CAH Strategic Planning Model • Develops strategic plans for rural and CAH-eligible hospitals • Integrates comparisons of clinical and operational performance measurements with state and national benchmarks • Creates an effective decision-making tool for everyday operations “Because what you measure gets done.” ...Tom Peters, In Search of Excellence

3. CAH Strategic Planning Model • Effective • Comprehensive • Low cost • Meets ORYX requirements • Builds on past successes • Builds confidence in management

4. Effective • The planning model provides more than a notebook on a shelf and a checkmark on a JCAHO surveyor’s form. • The planning model integrates planning into all facets of the organization through coordinated reporting by core businessdrivers. • The plan creates a decision matrix which directs focus on values, mission and the vision for the future.

5. Core Business Drivers Comprehensive • Utilizes 6 core business drivers which represent major divisions of healthcare operations addressing “real life” rural hospital operations

6. Low Cost • Specifically created by a rural hospital administrator for rural hospitals with limited resources • Utilizes existing data available through state health planning agencies • Utilizes CHIPS, a high-quality, low-cost source of DRG-specific data with cohort benchmarking

7. Meets ORYX Requirements • Utilizes a format consistent with • ORYX requirements • JCAHO accreditation standards • Malcolm Baldrige Quality Criteria

8. Builds on Past Successes • The strategic planning process utilizes past organizational successes to serve as key data elements that emphasize the positive contributions of management. • The planning process provides a dynamic motivational framework for management to highlight past successes and implement bold plans for the future.

9. Builds Confidence in Management • The process builds confidence in management by recognizing past contributions and involving management in every step of the process. • Presentations will utilize key managers during the data presentation phase of the process. • The final draft presentation will position the administrator and the Sr. management team in leadership roles for the plan implementation phase. “Leadership and communication are the same thing.” Kip Tindell, CEO The Container Store, voted for two years the Best Company to work for in America.

10. Decision Making MatrixApplying Hoshin Planning Principles • Mission/Vision Consistency Test - This the starting point for allstrategy development, clinical and operational performance measures, goals and objectives. Is what you are doing consistent with Mission and Vision? • Performance OutcomesData – Identifies performance gaps and opportunities that drive creation of goals and selection of quality improvement priorities. • Performance Improvement Process - Emphasizes participation in planning process review at all organization levels through existing standing committees.

11. Core Business Drivers Strategy Development Reflects Mission, Vision and Values

12. Mission StatementRevisits Why The Hospital Exists • Quality healthcare provider • Valuable asset to the community • Essential economic employment base Core Business Drivers

13. Vision StatementDefines Future Direction Where does the hospital need to be in five years to fulfill its mission? Core Business Drivers

14. Values States Guiding Principles • Quality •Customer Focus • Diversity •Fairness • Value of employees, volunteers

15. Access • Physicians • Emergency services • Specialty services, i.e. • Surgery • OB • Multi-specialty clinics Performance Measure Physician Demand & Deficit Analysis

16. Financial Performance • Profitability Assumptions • Capital Availability • Revenue Management • CAH, DSH, MDH • Appropriate Utilization • Registration Process • Billing Cost Per Adjusted Discharge • Performance Measures • Budget Achievement • Cost per Adjusted Discharge

17. Customer Satisfaction • Measure Key Customers • External • Patients & Families • Community Leaders • Consumers • Internal • Employees • Medical Staff • Volunteers Customer Satisfaction Rating 2nd Qtr ‘01 • Performance Measures • Survey & Focus Group Results

18. The captain of the Titanic didn’t have a backup plan for unseen problems Compliance Compliance Plan Compliance Officer Trained Employees Codes of Ethics Periodic External Coding Review • Performance Measure • Effective Compliance Plan with External Review

19. Process Quality CQI Operational in Major Clinical Areas JCAHO Survey Readiness Clinical/Operational Measures Driving Decisions JCAHO SCORE • Performance Measures • JCAHO Grid Score • Survey Readiness Program Participation (Orion)

20. Outcomes Quality Door to Needle Thrombolitic Therapy ORYX Clinical Measurement System Driving TQM Priorities Consistent Reporting in All Reports and Agendas Using Key Business Drivers Format 40 20 • Performance Measures • Integrated Clinical (ORYX) and Operational Outcomes .

21. Performance Measures (1 of 3) • Access • Physician Recruitment Plan Success • New Services Implemented from Strategic Plan • Financial Performance • Budget Achievement • Cost Per Adjusted Discharge compared with State and National Benchmarks

22. Performance Measures(2 of 3) • Customer Satisfaction • Documented Improvement in Satisfaction Survey Data • Positive Results Reported from Medical Staff Focus Groups • Compliance • Compliance Plan Implemented • Compliance Officer in Place • Periodic External Review of Coding Implemented

23. Performance Measures(3 of 3) • Process Quality • Acceptable JCAHO Grid Score • Continuous Survey Readiness Program Implemented in CQI • Core Business Drivers Format Used in All Agendas, Reports, and Minutes • Outcomes Quality • ORYX Clinical Performance Measurement System Implemented • Clinical and Operational Performance Goals Achievement Reported

24. “Go” or “No Go”CAH Application Decision • Completed Comprehensive Strategic Plan • Define CAH Long-Term Assumptions • Review Specific CAH Financial Projections • Review Barriers to Success • Clinical • Operational • Political (EX. state Medicaid adopting Medicare CAH rules) CAH? Yes No

25. CAH Strategic Planning Process(1 of 2) EXECUTIVEDECISION • Understand the Process • Establish Agreement and Timetable PRELIMINARY MANAGEMENT TEAM MEETING • Define Roles & Responsibilities • Select Dates • Decision: Data Elements • First Rough Draft of Performance Measures DATA PRESENTATION TO PLANNNG TEAM DRAFT STRATEGIC PLAN PRESENTATION • Includes Board, Senior Management, and Invited Community Leaders • Brainstorm to Rough Draft Mission, Vision, Values, and Core Performance Measures • Core Performance Measurements Selection by Administrator COMPLETED STRATEGIC PLAN WITH CAH DECISION

26. CAH Strategic Planning Process(2 of 2) EXECUTIVEDECISION PRELIMINARY MANAGEMENT TEAM MEETING DATA PRESENTATION TO PLANNNG TEAM • Final Draft Presentation of Strategy and Goals by Administrative Team DRAFT STRATEGIC PLAN PRESENTATION • Agenda, Minutes, Reports Reflect Measures by Core Business Drivers COMPLETED STRATEGIC PLAN WITH CAH DECISION

27. Completed Strategic Plan Outline • Mission Statement • Vision Statement • Values Statement • Core Business Drivers • Performance Measures • Strategies • Goals • Objectives to Achieve Goals

28. Strategy Outline Example(1 of 3) Core Business Driver:Access Performance Measure:Physician Demand & Deficit Analysis Strategy: EX. Recruit Three Primary Care physicians during next 36 months. One (1) Primary Care Physician and One (1) General Surgeon in 2004 Initiate Orthopedic Surgery Program in 2005

29. Strategy Outline Example(2 of 3) Goal 1. EX. Add Primary Care Physician in 2004 Objective 1.1 – Finalize placement of Dr. Smith with Dr. Jones during 1st Quarter. Objective 1.2 - Complete compliance review of physician guarantee and medical office building rental agreement by 2/1/04 for practice start date of 7/1/04. Objective 1.3 - Remodel medical office building by 6/1/04.

30. Strategy Outline Example(3 of 3) Goal 2.Review Current Gen. Surgeon Search Objective 2.1 - Involve active staff surgeons in search process. Objective 2.2 - Consider changing physician recruiting contractor. Goal 3.Initiate Search for Ortho by 2/01/05. Goal 4.Evaluate and report progress quarterly

31. List of past successes.InformationSource: Internal Physician demand/deficit analysis.Information source: State Health Planning Active searches. Commitments. Internal JCAHO survey report.Internal Performance Improvement Plan.Internal. Outcome measures/ORYX reports. Internal Plan of Patient Care.Internal Copy of Mission, Vision, Values Statements.Internal Capital plans, funding sources.Internal Planning Data Elements(1 of 2)

32. CAH financial analysis. External Income Statement -12 months. Internal Organizational Chart.Internal Audits—3yrs.Internal Cost reports.Internal Customer Satisfaction studies.Internal Employee Handbook.Internal Compliance Plan summary.Internal DRG Specific CHIPS Utilization Reports. External Service line profitability.Internal Planning Data Elements(2 of 2)

33. Completed Strategic Plan • Use your planDon’t allow your strategic plan to sit on a shelf. • Operationalizeyour planIncorporate performance measures into agenda templates and force them to be reviewed monthly and quarterly