SOLUTIONS CARE ASSOCIATION: DEVELOPING A CSR STRATEGY

Solution Care Association Developing an Integrated CSR Strategy1Indian Institute Of Management RaipurSateesh Panda (14PGP093)Santosh Kumar S. (14PGP094)Satvik Jani(14PGP095)Satyadeo Thakur(14PGP096)Shantanu(14PGP097)Shishir Sharma(14PGP098)Shrey Mehta(14PGP099)Vaibhav Bhatia (14PGP100)

12Indian Institute Of Management RaipurStructureCase IntroductionOverview of the US healthcare industryEnvironmental & Societal Impacts in driving CSRSolutions Care Association: Business OverviewCSR at SCA: The Implicit Mission Driven ActivitiesCSR as a platform for SCAs leadershipCorporate Citizenship Management Framework(CCMF)Overall GovernanceProducts & ServicesOperationsCommunity SupportOpportunities & Challenges in building an Integrated CSR strategyRecommendations

2Case Introduction

Solutions Care Association(SCA) is a US based mid-size nonprofit health organizationThe company is considered as an emerging leader in environmental area with its initiatives around:Phasing out toxic chemicalsInvesting in clean energyPromoting disease preventionSCA is deeply involved in numerous community benefit programs, has won several awardsBut there exists a limited awareness both internally and externally about its initiatives and their impact on business and societyIn addition, the company does not have a comprehensive way to track and report its achievements3Indian Institute Of Management RaipurCase Introduction

Pressure mounting on nonprofit health organizations to demonstrate public benefitTop management wants to leverage this opportunity to be a model of what American health care should look likeDeveloping an integrated strategy and becoming more transparent were critical for maintaining organizations reputationMission Statement:To provide our members and all communities with easy, quick and affordable access to health care services, without sacrificing quality of care.

4Overview of the US healthcare industry

Healthcare in US provided by the following legal entities:Health care facilities(0.82mn Hospitals, doctor offices, emergency care units etc.)Health insurers & Pharmaceutical companiesHealthcare in US led by for-profit companiesFederal & State govts. Involved as Direct-care provider(Dept. of Veterans Affairs)Operator of health insurance(Medicare, Medicaid)Provider of various social services45million or 15% Americans still uninsuredFactors for high health costs:Fragmented, multi-payer systemZero-sum competition Focus on treatment rather than prevention of diseasesHigh prices of drugs, outpatient procedures, & medical staff salaries

5Indian Institute Of Management Raipur6Indian Institute Of Management RaipurEnvironmental & Societal Impacts in driving CSRHealth care organization had significant impact on environment and society$8.5 billion on energy costs8% of U.S greenhouse gas emissionHospitals generated 2 million tons of solid waste of which 15% was toxicHospitals were 4th largest discharger of mercuryWater contamination with drugs

67Indian Institute Of Management RaipurHelping the poor, uninsured and underinsured and supporting universal health coverageHelp build healthy communities and clean environment

How can this be achieved?Employee volunteeringPromoting healthy livingSocially responsible investingSocial Responsibility

78Indian Institute Of Management RaipurWorst disclosure records among all industries in 2009Pressures for increased transparency and reporting were growingTo protect their tax-exempt statusTo demonstrate community benefit beyond philanthropyNonprofit hospitals accused of building luxury facilities, charging premiums, reducing services for poor Social Responsibility (contd.)89Indian Institute Of Management RaipurMid-size nonprofit health care provider in the U.S.AHeadquarters in Glenbrook and NevadaServed 4.3 million members in 5 states80,000 technical, administrative and clerical employees and 7000 physiciansConsisted of 4 distinct groupsSolutions Care Health PlansSolutions Care HospitalsSolutions Care Medical GroupsCoalition of Solutions Care UnionsSCA was the payer as well as the provider of health care servicesSolutions Care Association: Business Overview

9CSR at SCA: The Implicit Mission Driven ActivitiesValues-based social purpose organizationCSR engraved into business modelCommitment of improving peoples health via quality care CSR Sponsor Group and Environmental Stewardship Sponsor Group providing guidance and direction CSR Workgroup and Environmental Stewardship Workgroup in charge of implementing strategyCommunity Benefit focused on developing and disseminating knowledgeLeader in environmental stewardship, strategy to minimize environmental impacts and promote sustainabilityWon various awards, launched nation-wide initiative

10Indian Institute Of Management RaipurCSR As a Platform For Leadership In 21st CenturyResponsibility and opportunity to be a model of American Health Care

Addressing key social and environmental problems

Powerful tool in assessing risks and opportunities and implementing an integrated and aligned strategy for becoming leader in social justice

11Indian Institute Of Management RaipurResponsibility and Opportunity to be a Model12Corporate Citizenship Management FrameworkTo manage corporate citizenship as an integral part of the businessTo assess its current understanding, organizational readiness and performance in CSRInvolved assessing and managing business practices in 4 inter-related domains:-Overall governance- Values, mission, principles and policies: Embedding corporate citizenship in the governance and management structure of the companyCommunity support- Addressing social challenges: Mobilizing the companys assets to address social issues and support social well-being beyond creating jobs and paying taxes.Operations- Responsible business practices: Utilizing responsible business practices to minimize potential negative impact on employees, environment and society and maximize positive impactsProducts and services- Market Strategy: Addressing societal needs with marketplace solutions that return a profit to the company.13Indian Institute Of Management RaipurCorporate Citizenship Management Framework (CCMF)

14Indian Institute Of Management Raipur14Assessment of CSR Management and Performance

15Indian Institute Of Management Raipur15Overall Governance : Values, mission, principles and policies

The four groups were not always aligned in their goals and priorities. The environmental Stewardship Executive Committee & the CSR Executive Committee were linked to the groups at the regional levels. The association had a history of supporting public health reforms, including the proposal for expanded healthcare coverage in California. The association had been successful in working with various stakeholders- suppliers, NGOs, community organizations, government, customers and other healthcare organizations.Public polling had demonstrated increased positive news coverage, that was an indicator of the organizations brand strength and good reputation.Internal and external communication was identified as the key weakness of the organization.The main barrier to the successful execution of CSR strategies was the difficulty in defining the business case or how CSR helped avoid liabilities, save money, differentiate the brand and retain customers.

16Indian Institute Of Management Raipur16Products and ServicesObjective Of product and servicesSupport Uninsured and underinsured peopleAffordable health services for societyMinimise carbon and toxicity footprint in environmentMinimise negative and social impactMaximize community benefitIntegration of all 4 parts of the business Focus on prevention of diseases instead of treatment

17Indian Institute Of Management Raipur17Products and Services (contd.)ImplementationIntroducing product and services to integrated 4 business units250 researchers published their research work in publicImplementation of electronic records systemTracking water contaminants in pharaceuticals which was in compliance with Clean Water Act

18Indian Institute Of Management Raipur18Products and Services (contd.)Issues Time taken for the research and implementation was highCost for implementation prevention methods for chronic disease was highPerception of people about affordable product with low qualityHigh cost as it functioned only in 5 state hence economies of scale was hard to achieve

19Indian Institute Of Management RaipurStrongest of all the four domains of CCMFKey initiatives in this domain include:Greening its facilitiesEnvironment friendly products Diversity Work-force development Sustainability initiative of 2007Health and safety of employees

20Operations Responsible business practicesIndian Institute Of Management RaipurGreening its facilities21Provided strong leadership on greening its operations among its peers and others by:Improving energy efficiencyEliminating DEHP containing productsUsing renewable energy

Concern:No clear approach to such environmental issues articulated organisation-wide

Indian Institute Of Management RaipurEnvironment friendly products Promoted the development of environment friendly products Examples: eliminating mercury, DEHP and other toxic chemicals from productsAble to influence suppliers through this initiative

Concerns: Expensive productsIntellectual property concerns (manufacturers)22Indian Institute Of Management RaipurDiversityGood communication on diversity goals, initiatives and achievements across all four domains

Value proposition clearly defined and strongly supported

Included employees, suppliers and customers

23Indian Institute Of Management RaipurWork-force development 24Indian Institute Of Management RaipurHighly unionized work-force

Good labour-management collaboration

Strong commitment to work-force development

Workshops, seminars and team-building exercises

Provided its employees with job security

Sustainability initiative of 2007Healthy People-Healthy Planet-Healthy Workers

Moved the entire industry towards greater environmental stewardship

SCA taken a leadership role because of this

Concern:Little awareness and insufficient support for it from other domains

25Indian Institute Of Management RaipurHealth and safety of employees26Indian Institute Of Management RaipurPut a strong emphasis on health and safetyDeveloped safety plan as a part of its Quality planReflected goals of :Safe culture, safe care, safe staff, safe support systems, safe place and safe patientsConcerns:Health profile of workers still poorHigh health insurance costsSo, SCA should focus on cutting costs

Hence, there were good measures in place in area of operations

Had an unprecedented management of Compliance

SCA had voluntarily implemented Sarbanes-Oxley Act as well

Had no instances of fraud or non-compliance with its internal policies

27Indian Institute Of Management Raipurtop management must individually certify the accuracy of financial information27Community SupportKey area: Supporting the communitiesManaged by Community Benefit Group

Main activitiesProgrammes to support access to health care for uninsured and underinsured.Programmes designed to support community healthPublic policy initiatives

28Indian Institute Of Management Raipur28Community Benefit ProgrammeImportance Protected tax-exempt statusDelivering on its mission

Concern:Though It was getting stronger still much of the work was not recorded and communicated29Indian Institute Of Management RaipurVolunteering is a significant aspect of medical groupMany employees and physicians volunteered

Concern:Great work in volunteering was not successfully advertisedNo system to record initiatives by employees of CBD and SCA30Community Benefit Programme (contd.)Indian Institute Of Management RaipurMedicaid: most significant contributionHelped uninsured and low-income peopleLot of spending in services to Medicaid Patients and uninsured

Concern:Link between SCA mission and MedicaidMedicaid: to be communicated effectively31Community Benefit Programme (contd.)Indian Institute Of Management RaipurSCA was strong inGranting access to various community clinicsIts eagerness to share its best practices

Concern: In the time of demand for transparency and growing need to protect non-profit status of SCA, CB wasTaken for grantedNot addressed more consistently32Community Benefit Programme (contd.)Indian Institute Of Management Raipur33Indian Institute Of Management RaipurStrengths & Weaknesses Key StrengthsPowerful social missionAn integrated delivery system from insurance to patient careHealthy lifestyle programs for membersStrong commitment and leadership in supporting environmental stewardshipA strong medical history database and medical research programsGood brand reputation

Key WeaknessesPoor awareness, communication and coordination- both internally and externallyLack of alignment or knowledge between the groups at Solution Care- about all social and environmental initiatives undertakenShrinking lead in providing affordable insurance productsGreater focus on measuring inputs rather than outputs

3334Indian Institute Of Management RaipurChallenges & RecommendationsPoor external communicationPublic awareness of CSR initiativesEmpower customers- Promoting education and disease prevention (exhibit 6)Empower customers- How and Why Solution Care Association is different from other health care providers

Poor internal communication and coordinationEmphasize on inter-region and inter-group communication through campaigns (exhibit 2)Empower employees- awareness of importance of CSR activities

34

35Indian Institute Of Management Raipur