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Hospital Business Planning Best Practices

By Cindy Matthews, CHC Executive Vice President


Vital to an organization’s future, a business plan is a framework outlining the steps for financial and operational success. For many hospitals, this process has occurred at five-year intervals tied to strategic planning efforts. However, in today’s healthcare environment marked by ongoing industry, reimbursement, and market shifts, development of an annual business plan offers leaders a greater measure of security and flexibility to manage change.


Best practices for your hospital’s business planning include:


Align business planning efforts with strategic initiatives

Getting started, associate business planning efforts with strategic goals and objectives. Some hospitals benefit by having a board-level strategic planning committee to identify overarching strategic initiatives. The business-unit focused plans you develop for service line growth, physician alignment, operational efficiency, clinical quality and patient engagement/satisfaction must be consistent with the organization’s strategic objectives. Leaders should work with hospital managers to ensure department and service line business plans and budgets align with hospital strategic initiatives.


Conduct a market assessment prior to starting the business plan

A snapshot of your environment—such as demographics, patient origin and market share—will serve as the foundation of your business plan. For example, evaluate volumes coming into the hospital broken down by zip code and/or service line. Who are your competitors in the marketplace? What opportunities are available to stem outmigration?


Draft your business plan concentrating on measurable results; develop an action plan

Incorporate these areas of focus:

  • Vision, mission statements and an environmental analysis
  • Strategies for growth, including but not limited to:
    • Operational effectiveness
    • Partnership opportunities
    • Physician recruitment needs
    • Expenses, revenue dollars and cash flow expectations
    • Operational improvement opportunities
    • Employee talent and culture
    • Quality initiatives
    • Community initiatives

Each stated strategy should have a measurable metric. What does the term “enhance” mean, for example? Be specific. Do you anticipate an increase in the number of orthopedic surgical procedures? How would you get there and what are the associated revenue goals?


An integral component is a detailed action plan with tactics to achieve the desired results. Identify who is responsible for achieving a stated goal, and the timeline (a date or quarter) for completion.


Involve Stakeholders in plan development

Although the hospital CEO is ultimately responsible for the business plan, hospital Board members and medical staff members should be included in the planning process, in addition to other C-suite leaders including a marketing representative if available.


Input from Board members can be advantageous particularly at the beginning of the planning process; some hospitals engage Board representatives as part of a pre-planning process, and others have a strategic committee to assist with business plan development.


Stakeholders including physicians are also essential planning process team members. The hospital’s medical staff plan should drive physician recruitment efforts; regular physician-CEO communication integrates valuable physician input into the plan.



A process timeline

Although planning is often viewed as a task or event, something with a timetable marked with a beginning and an end, it’s an ongoing process. “Always be planning and implementing” should be the mindset.


The timeline you develop for the business planning process should

integrate with the hospital’s fiscal plan and associated deadlines. For hospitals with a fiscal plan year running from July 1 to June 30, completing a market assessment in the fall provides much-needed data for business plan development due in January. Next, plans can be  presented to respective hospital Boards for approval in February or March —a precursor to development of the annual budget with accompanying action plans. Be certain to allocate additional time if needed depending on the level of Board  involvement.


A well-crafted business plan identifies the steps for financial and operational success. Also, the plan places your organization in a position of strength to grow regionally or get ready for a partnership, if desired.


For more information on business planning, see CHC Consulting Annual Business Planning and Budgeting.

Tags: Business Plan, Hospital Performance Improvement, Operational Improvement, Strategic Direction
How LTACHs Help Local Communities

by Derek Murzyn, Market CEO, Carolinas ContinueCARE Hospitals


A healthy culture, local relationships, and specialty services are a winning combination for Carolinas ContinueCARE Hospitals. These distinctions are the foundation for long-term acute care hospital (LTACH) success for us locally and can help other facilities as well. LTACHs support community hospitals by extending the continuum of care, reducing acute care length of stay, and providing the best possible setting for fragile patients with complex medical needs.


LTACHs bridge the gap to recovery for patients often following an ICU or traditional acute care hospital stay. After admission to one of our LTACHs, teams of highly skilled doctors, nurses, pharmacists, therapists, and dietitians collaborate to develop and implement a customized medical and therapeutic recovery plan for each patient.


The patient is our primary focus every day at our three LTACHs in North Carolina, which include: Carolinas ContinueCARE Hospital at Kings Mountain; and two facilities in Charlotte, Carolinas ContinueCARE Hospital at Pineville and Carolinas ContinueCARE Hospital at University.


Thanks to a strong partnership with our host hospitals within the Carolinas Healthcare System as well as specialty physicians, we’re able to provide care continuity and leverage best practices for the benefit of patients.


In my leadership role, I’ve discovered that educating the medical community is paramount for an LTACH to be successful locally. Referring providers must understand the LTACH service offering and have confidence in us in order to make that referral. It’s invaluable that we share and communicate that LTACHs offer 24/7 acute care physician coverage, the availability of invasive monitoring and medical support devices, the provision of intensive and complex medical treatment, as well as our patient outcomes. Education can range from informal elevator discussions to documented communication and presentations to medical staff section meetings. We must always be flexible to the needs of our community and our host hospital in our communication and education.


Community and family education are also important. The general public may not be aware that an LTACH is not a nursing home, skilled nursing facility or hospice. We strive to change these common misperceptions by communicating our unique services and interdisciplinary care approach—always focused on the patient. As example of our inclusive culture, we invite family member participation in patient treatment planning.


We’ll continue to highlight what our LTACHs do and the services they provide — including the fact that, one-third of our LTACH patients return home. That’s a result worth sharing. And our devotion to quality is transparent and supported by key metrics documented in reports to various healthcare agencies. In April 2017, Carolinas ContinueCARE Hospital at Pineville was awarded three-year accreditation by the Center for Improvement in Healthcare Quality (CIHQ) with designation as a CIHQ Center of Excellence in long-term acute care. This achievement reflects the organization’s commitment to providing the highest level of quality healthcare to the community.


Above all else, we continue to foster a culture of caring; without it, nothing else matters.


Read more about the roadmap for LTACH success long term.

Tags: LTACH, Strategic Direction
Calling Community Hospitals: A New Era of Opportunity

By Mike Williams,  President and CEO, CHC

As we usher in 2017 with our country’s new administration, it’s not surprising that hospitals, healthcare providers, insurers, and consumers alike are asking “what’s next?” related to healthcare. There’s no question that some changes will occur, although they won’t happen overnight. Many details are forthcoming in the weeks and months ahead.


Regardless of the road in front of us, we must continue to position community and rural hospitals in optimal fashion. CHC will be looking at innovative ways to help community hospitals during these times of change, by lending our expertise, and upholding our mission to guide, support and enhance the mission of community hospitals and healthcare providers.


Strong community hospitals are critical to the vitality of entire populations, especially in rural environments, because they support both the health and economy of the communities they serve. Here are some top-line recommendations to stay the course for continued success, even with impending healthcare reform changes on the horizon:

  • Assess your market position. As a smaller community hospital, this may be a good time to examine relationship opportunities with additional organizations. Could you benefit from optimizing connections with other providers through affiliations or clinical relationships? Are existing services duplicated in your market? Be creative in exploring new associations to position your hospital confidently and strategically.
  • Reduce operational expenses. Maintain or reinvigorate your existing productivity efforts. Monitor key productivity measures, including FTEs per occupied bed. Do you have the right FTEs at the right place at the right time? Also, consider supply chain optimization from an operational perspective. Are you paying too much? Selecting the right group purchasing organization can help streamline your processes and yield optimal supply savings and support, making this a short-term critical success factor.
  • Evaluate your facility’s clinical strength. Look to your IT department for clinical outcomes documentation, and partner with medical staff members to review opportunities for improvement. Examine your HCAHPS scores to determine if there are ways to enhance patient experience.

Even with health care changes ahead, I’m confident community hospitals can persevere by focusing on and optimizing their strength and position as we welcome the New Year.


Learn more about strategies for success moving ahead in 2017.



Tags: Affordable Care Act, Healthcare Reform , Hospital Management, Hospital Performance Improvement, Operational Improvement, Strategic Direction
Board Communication, Teamwork, Spell Success at Yoakum Community Hospital

by Karen Barber, CEO, Yoakum Community Hospital


Leveraging Resources for Change


When I joined the Yoakum Community Hospital team in 2006, one of the biggest hurdles I faced was improving board-management relationships. I realized that addressing this challenge would be essential to paving the way for a better, more secure financial and operational future for the hospital and community. Elorine Sitka, Yoakum Board Trustee and Chair, shared this vision, and together, we turned ideas into reality.

As a 25-bed critical access hospital in rural Yoakum, Texas, it became apparent that trustees had not been receiving all the information they needed — in a timely way — to make well-informed decisions. We realized that trustees were challenged in performing their basic fiduciary and financial duties, and change was necessary to inspire and create a high-performing board dedicated to the hospital’s success.


As partners, our goal was to improve the hospital for the good of the community. We developed recommendations on ways to improve board relations and engagement – laying a solid benchmark for success for many rural hospitals.


Five Steps to Success


Certain basics are “must-haves” for continuous improvement in board-management relationships, including:


1. Clarify expectations regarding roles and responsibilities

Governance and management are distinct functions. At Yoakum today, board members view their role as strategists and overseers. They leave management and operations to hospital leaders and managers, although that wasn’t the case previously. Board members provide direction. Managers create and implement tactics to support board strategies. One significant consideration is to provide board members with updates to keep them in the loop.


Identifying specific responsibilities in written form can also help prevent confusion related to roles. Discussions about mutual expectations are important, too. What do trustees expect of the CEO? What types of things can a CEO do without prior board approval?


2. Foster open, consistent communications

Regular, informal phone calls and a weekly newsletter are great tools to keep board members informed. An online portal provides members with meeting materials to review at least a week in advance. Trustees are encouraged to reach out to leaders if they have a question or concern, as well as participate in meeting discussions and respectful debates.


3. Make meetings purposeful

Make board meetings organized and action-oriented. Take informational items off the agenda for trustees to read on their own. Focus face-to-face time on several major issues that require voting at board meeting time.


I strongly suggest that everyone “stick to the agenda.” The entire team is busy, so keep meetings short and on point. And set aside time to socialize. Sharing a meal together before getting down to business inspires fellowship and teamwork.


4. Create resourceful onboarding and continuing education

New trustee orientation is vital and should include meetings with key stakeholders, including the CEO and CFO, as well as important partner organizations. A tour of the hospital and distribution of educational materials including an organizational chart and a glossary of healthcare industry terms and acronyms are part of the process.


5. Identify potential trustees

A specific recruitment process for new trustees is key. At Yoakum, we maintain a running list of potential board members, keeping in mind leaders and colleagues with diverse backgrounds. Another consideration is to identify potential board members without any sort of personal agenda. The focus should be on improving the hospital for community health.


We also encourage board members to listen to presentations offered by hospital staff, and take advantage of state and other sponsored trustee education programs. At Yoakum, we also invest in an annual board retreat and involve trustees in monthly birthday celebrations and other hospital events.


Building on Success


Looking back, the difference at our board meetings today is obvious. Today we have a strong board and dependable, trustworthy leadership committed to a common purpose.


To learn how Yoakum Community Hospital developed a high-performing board, read this CHC case study.

Tags: Hospital Board Advisory, Hospital Performance Improvement, Operational Improvement, Strategic Direction
Best Practices for Effective Physician On-Boarding

by Stephanie Hobson, Director of Physician Recruitment, CHC


You’ve successfully recruited the physician you need to serve your community. What comes next? The hiring process is just the first step in retaining these professionals you have worked so hard to recruit. Equally important is physician on-boarding — the process of familiarizing and orienting physicians to a new healthcare facility or practice, and to the culture of your organization. On-boarding introduces new physicians to the community, integrates them into the medical staff, helps them establish their practice and achieve a firm financial foundation in the first year.


The case for on-boarding


An effective on-boarding process can help retain physicians in an increasingly competitive and challenging environment. The candidate pool is shrinking and the number of medical students continues to decline. In the year 2020, the expected shortage of practicing physicians is estimated to be 91,000.


Physician replacement costs are significant. The average cost to turn over a physician is $1.2 million. This impacts hospital revenue and patients’ perceptions of care. Replacing the productivity of a retiring internist will require 1.6 younger physicians, according to a 2014 Truven Analytics study. A systematic, well-organized on-boarding process can increase retention (avoiding the costs associated with physician replacement), stabilize access to care, and reduce outward migration.


Lack of an organized on-boarding process has added ramifications: physicians could lose confidence in the hospital or their group by a perceived lack of interest in their success resulting from poor on-boarding; and a delayed practice ramp-up period would increase the time needed to see positive ROI on an income guarantee or employment.


On-boarding recommendations


Here are some best practice tips to improve the physician on-boarding process.


Create an effective on-boarding program customized to your facility. Survey existing physicians to obtain feedback about the current on-boarding program and create a small task force to outline an ideal state process. Assign project leaders to assemble support teams including community members and volunteers, and measure results.


Set up Phase I (signed agreement to orientation) and Phase II (orientation to 90 days) action plans.

  • Phase I should include the completion of credentialing and enrollment; weekly communication from a designated hospital liaison; and personal/family assistance, such as house hunting, connecting with local service providers (Internet, phone, etc.) and getting kids in school. Welcome the entire family to the community.
  • In Phase II, complete the orientation process and review guidelines and expectations; market physicians to the community and other providers; and help integrate the physician and their family into the community by linking them to resources, groups and organizations.

 Additional best practice tips include:

  • Integrate new providers into your culture. Tell them what makes your culture and mission unique. Explain your hospital/health system goals.
  • Ensure basic resources are provided ‘day 1,’ including a lab coat, prescription pad, an ID badge and a tour of the facility.
  • Give them time to set up their office and meet their team before they start seeing patients.
  • Bring in their spouse to help them fill out benefits elections.
  • Give them flu shots and vaccinations etc. to meet 100 percent of employee wellness goals.
  • Have hospital leaders visit/eat lunch with them during orientation.
  • Train them on the EMR/how to log in to email/how to access resources; have them complete education modules during orientation.
  • Assign an administrator as a point of contact for each new physician and have them meet regularly during the first year.
  • Send out a postcard to your primary and secondary service area introducing the new physician. Include photos, address, phone number, and a ’now accepting patients’ message.

Making it work


Physician on-boarding doesn’t “belong” to the CEO alone. It should be a shared responsibility across hospital leadership, HR, the group or physician the doctor is joining, physician leadership, community members such as Chamber representatives, and hospital Board members.


On-boarding is the benchmark for physician engagement. An effective process can reduce physician turnover and recruitment costs, establish continuity of care, increase hospital productivity, and positively affect patient and employee satisfaction scores.


Learn more about CHC Physician Recruitment Strategies for community hospitals.

Read the CHC Physician Recruitment services overview.

Tags: Hospital-Physician Alignment, Physician Recruitment, Strategic Direction

CHC in the Spotlight