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Guide to prepare strategic business plan for District (Trishuli) Hospital

Submitted to:

Franziska Fuerst

Senior Technical Advisor

GIZ-Support to the Health Sector Programme (S2HSP)

Submitted by:

Deepak Timsina

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Background

The District (Trishuli) Hospital often called Trishuli Hospital is a 50-beded autonomous hospital

situated in the District Headquarter- Bidur of Nuwakot. It is managed by a Hospital Development

Committee. It started its services as a health center in 2032 initially to the employees of Nepal

Electricity Authority and gradually extended its services to the public.

The mega-earthquake of 25th April, 2015, damaged 14 of 19 blocks that were providing the

curative and preventive services to the public. Hence, majority of the hospital services were

resumed through 11 different tents supported by External Development Partners until it was

migrated to a pre-fabricated structured constructed with the support of BMZ. An integral part of

recovering the health system at district level will be the re-vitalization of all of its functions and

ensure quality of care.

Currently, the hospital is functioning as a 30-beded hospital although it has received approval

for providing services through a 50-beded hospital. The commitment to provide high quality of

health care remains unchanged, continuing national and state reform efforts will challenge us to

develop new ways of delivering cost-effective care to the patients in the future. The business

plan will summarize the results of the thoughtful and extensive planning process, along with

previewing some exciting building concepts.

Introduction

A business plan is essentially a map that defines a hospital's business and outlines strategy

for success. It is also used synonymously with strategic planning. Strategic planning is critical to

the long-term success of any nonprofit organization. It involves reviewing where organization is

now, where it would like to be in the future, and how it intends to get there. The process of

strategic planning can help to invigorate and strengthen the organization by focusing on longer

term objectives and renewing the senses of purpose and commitment among directors and

staff. (1)

The process of strategic business planning is programmable, systematic, rational, and holistic. It

integrates the short, medium and long term planning allowing the healthcare organization to

focus on relevant and lasting transformations for the future. Strategic planning is the systematic

and organized process whereby an organization creates a document indicating the way it plans

to progress from its current situation to the desired future situation. It is the set of decision

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making criteria and the decisions taken and implemented by an organization to definitively and

permanently guide its activities and structure. Strategic Planning has a clear transformational

purpose: a) it identifies the current characteristics specific to the organization and the setting in

which it operates; b)it generates a vision of how the organization wishes to be in the future; and

c) it also defines the roadmap and actions required to change the organization's current

situation to the desired future situation. The Medical Superintendent has the duty to promote the

business planning process and provides hospital with a plan for the future. Such planning is the

most important core function of any Medical Superintendent and cannot be delegated.(2)

According to the Governance Institute, San Diego, CA, a strategic business plan for a hospital

generally engages the following planning processes- Oversight of process and participants,

situational assessment conclusions and strategic issue identification, mission and values

development, vision creation, strategic goal determination; and strategic plan alignment and

monitoring(3)

On the other hand, Francisco de PR proposes the following planning process for preparing a

business plan(2):

Assessing the internal and external environments using SWOT analysis

Drawing conclusions about the implications of the situational assessment

Identifying the critical strategic issues that must be addressed over the longer-term

Agreeing on mission, a set of core values, or guidelines

Creating a concrete vision of what will be accomplished in the longer-term future

Choosing a limited number of measurable strategic goals, or areas of priority and focus

Developing objectives, or shorter-term, organization-wide initiatives that describe how to

accomplish the mission, vision, and goals

Developing plans for communicating, monitoring, and updating the business plan

S2HSP will adopt the modality of Francisco PR to develop Strategic Business Plan for Trishuli

Hospital.

Rationale

It is also a crucial document to securing grants for the hospital. The Ministry of Health (MoH),

external development partners (EDPs) and private agencies including investors want not only to

understand the hospital's current functions and capacities, but also need to know hospital's

future road map. It is very crucial to have a focused plan for success and a way to measure

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success. The demand for health care services has increased, making this one of the most

booming industries in global economics and preparing a business plan for the hospital is one of

the first things to be done for obtaining external grants and funds. Writing a business plan for

your hospital is the best way to propose, and then secure, the funding needed. The hospital

management must know how much money you will need to start or run (maintain) the hospital.

Preparing business plan for hospital incurs a thorough research on every aspect of the hospital

from goal to location, and to development to construction, to marketing to staffing and

administration.

A strategic business plan steering committee (SC) will be formed under the chairmanship of the

Medical Superintendent (MS). SC will form working groups (WG) as per need.

The need of strategic business planning of the hospital is summarized as:

1. The size and complexity of the hospital has increased when it was upgraded from 15

beds to a 50-beded hospital in 2013.This has led to increased diagnostic and treatment

facilities within the hospital. However, the hospital has not been able to run specialist

services envisioned for a 50-beded hospital.

2. The hospital has limited resources and at the same time lack effective leadership,

financial management, quality of services and client satisfaction.

3. There are increasingly professional and skilled competitors of Trishuli Hospital in the

district like 5 private hospitals, 3 polyclinics, lab and a few diagnostic centers.

4. The budget absorption capacity of the hospital is fairly low as compared to other district

hospital. The hospital has not been able to utilize available resources like Management

Division (MD) grant, NSI grant, regular budget from MoH and grant from LSA of S2HSP.

Organization of the Business Planning Process

There should be a steering group within the hospital to lead the development and

implementation of a business plan. This group should represent all interests and include people

with leadership skills. Generally, it is led by the Medical Superintendent (MS) of the hospital.

The MS in business planning will act as the driving force and display strong commitment to its

formulation and implementation. MS should include someone from among the hospital staffs

who is familiar with the business planning methodology.

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Ideally, it is very useful to provide specific physical space (the BP office), which is the epicenter

of the planning process. An "external facilitator" will be contracted as a consultant. The external

facilitator is the person in charge of organizing, motivating, and networking all actions, giving

them shape and connecting them in time and space. Working groups will be formed on a need

basis. The working groups will report to the steering group to address the different aspects of

analysis and generate ideas(2).

Proposed Process of Development of Strategic Business Plan

According to Perera FdPR, the classical approach of strategic business planning of a hospital is

a valid procedure and involves 5 stages in the process as follows(2):

1. Development of mission, vision and values

2. Strategy formulation

3. Operational planning

4. Assessment of the Results

5. Reformulation of the Strategy.

Development of mission, vision and values

Mission

Mission defines the final aim of the healthcare organization. It is a statement that defines the

overall purpose of the organization, the target clients, the services offered, its distinguishing

features, coverage of the organization, quality and efficiency of the services delivered.

Methodology to identify mission

Vision

The vision statement is a written statement that presents the future image of the hospital after

the intervention process. It reveals what the hospital specifically aspires to be in the future.

Understanding how the work they do connects with and supports the organization's vision is

critical for employees to appreciate the valuable role they play on the healthcare team. Helping

employees make this powerful connection takes effective leadership.(4)

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Values

Values are the set of principles, rules and cultural aspects governing the hospital and

determining the institutional behavior. Understanding how the work they do connects with and supports the

organization's vision is critical for employees to appreciate the valuable role they play on the healthcare team.

Helping employees make this powerful connection takes effective leadership.

Process to determine mission, vision and goal:

1. Workshops

2. Brainstorming of the participants.

3. Delphi technique

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Mission

Sample Questions to display the current situation and facilitate discussion:

1. What do you think should be our hospital mission statement? (Remember it should be single)

2. What do you think is the mission for Trishuli hospital?

What are our core reason for existence

What would be missing if we do not exist

Who(Population and geography) do we serve

How can we differentiate ourselves from the organization that do similar things Materials: Capture the idea in flipchart and facilitate decision making

Value:

1.How would you articulate our system’s desire values?

2.What do you think should be the core values for this hospital?

Which behavior are hanging offenses

What type of culture do we want or need to have?

How do we want to be seen by our key stakeholders?

Materials: Capture the information on flipchart

Vision

Sample question: Where do you want to be in 3 years?

Situation

analysis of

Trishuli

Hospital

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Strategy Formulation:

The required information will be collected by groups under the leadership of strategic business

plan steering committee. The methods used will be:

Observation (Checklist) FGD Key Informant Inerview

Strategy formulation involves five different stages:

BUSINESS PLAN

DEVELOPMENT

1. Analyze the

external

environment

2. Analyze the

internal

environment

3. Develop SWOT

matrix

4. Define strategic

alternatives

5. Identify

Strategic Area and

Objectives

Focus on

- Client

- Competitors

- Providers

- Owners

Analysis of

- Resources

- Legal Situation

- Power Groups

-Clinical care, Training

and Research

- Generate alternative

strategic actions

- Prepare document of

all actions/proposals

- Classification &

grouping depending

upon types

- Finalization of

strategic action

selection process

- Number

- Duration

- Name

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Stage I: Analyze the external environment: The consultant will focus on 4

different components:

a. Client: expectation, demographic composition, socioeconomic status etc.

b. Competitors: Identify the features of major competitors of the hospitals. It helps to

devise the business plan for the hospital. The competitors for the hospitals are private

hospitals, polyclinics, lab and diagnostics centers in Bidur, Trishuli and Battar.

c. Providers: Providers are suppliers of goods and services that have a significant

influence on the quality and cost of the services provided. Collaborations between the

provider and the hospital (client) to establish long-term partnerships can benefit both

parties.

d. Owners: In case of a public hospital, the owner is the MoH. Hence, the hospital

management and HDC should understand the objectives of MoH and circumstances and

activities to deal with MoH expectations. MoH issues acts, policies, strategies and

directives from time and again to meet the need of public hospitals.

Stage II: analyze the internal environment

The analysis of the internal environment provides information relevant to the hospital and that

has occurred or occurs within the hospital. The hospital has the complete ability to act,

transform and change its internal environment. The analysis has to consider 4 different aspects:

a. Resources: Hospital's resources include people, financial budgets, structural resources

(plan, facilities, equipment) and their degree of obsolescence, and organizational

resources.

b. Legal situation: Certain processes and HDC orders are deployed to make the

management processes easy and increase organizational efficiency. Any

methodological obstacle has to be reacted to meet the organizational goals.

c. Power groups within the hospital: This includes internal decision-making bodies,

private sectors working within the premises of the hospital (e.g. Sajha pharmacy), local

pressure groups etc. The degree of influence and impact on the operations has to be

duly considered.

d. Analysis of clinical care, training and research: Steps has to be taken to detect

trends that may motivate strategic decisions. The hospital should have its own updated

data as well as the data/information of its competitors for strategic decision making.

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Stage III: Develop SWOT matrix

Based on the information collected in stage I and II, the organization should process an

analytical step- SWOT analysis, an acronym formed from strengths (S), weaknesses (W),

opportunities (O) and threats (T), which classifies the results of the analysis. The external

analysis identifies both the opportunities (O) and threats (T). Similarly, the internal analysis

identifies strengths (S) and weakness (W).

The hospital should take advantage of opportunities offered by the environment and use to

design its action plans while it should protect itself and minimize the potential impact from

threats. In addition to this, hospital should try to limit or correct the weaknesses and use

strengths to devise its strategic actions to consolidate and develop them, which leads to the

maximum performance of the hospital.

Process to prepare SWOT matrix:

Information has to be first classified under the four categories and weighted in terms of

importance or relative intensity (high, medium and low; +, ++, +++, etc.), which allows the

planning team to establish ranking, with the most important factors ranked in the first position,

oriented to strategic priorities.

Stage IV: Define strategic alternatives

By the end of stage III, the planning team will be able to generate numerous alternative strategic

actions or proposals. The following steps are recommended in stage IV:

1. Generate numerous alternative strategic actions or proposals

2. Prepare a document incorporating all proposals, without judgement regarding their

feasibility or relevance, and where no idea is rejected without due consideration.

3. The strategic plan steering group begins a process to classify and group them into more

or less defined areas of actions and grouped depending on their types.

4. Based on discussions, the strategic action selection process is fine-tuned; some

proposals are discarded where as some are linked to other proposals, thus better

defining the fields of action each time. The wide ranges of options for action suggested

originally are now narrowed down to some extent, leaving aside those that clearly do not

meet the minimum conditions of feasibility or do not have the desired scope.

5. The strategic plan steering group concludes this stage with a set of no more than 20

areas of action, from which the final strategy will be chosen.

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Stage V: Identify strategic areas and objectives

The consultant and the strategic planning steering group will choose few areas on which to

focus the strategic business plan of the hospital during the coming years. These areas are often

called strategic areas (SA) and have following features:

1. Number: there should be only a few (<10) SA, preferably about 5 or 6, to ensure that the

hospital effectively invests its effort, concentrating on a few strategic areas and

sacrificing the rest for future planning.

2. Duration: the SA must remain active for the duration of the business plan. Thus the

strategic area should have intervention activities throughout the duration.

3. Name: The name of the SA should be generic, which refers to one area of action alone.

E.g. '"Quality" is a better SA than "plan for improving quality".

Once the SAs are identified and denominated. The strategic objectives (SO) will be

assigned to them. SOs are wide ranging actions to be performed within a specific SA.

The number of SO assigned to each AS should not exceed 5.Its formulation is much

more specific and recognizable in practical terms, although it still retains its strategic

character. For example E.g. for SA "Quality", an SO could, for example be "Accredit the

hospital and retain its accreditation".

The SA and SO together in an organization constitute what is called its strategy

formulation, which should only fill 1 or 2 pages and make explicit the strategy of the

hospital(2).

Operational Planning

The purpose of the operational planning is to make each SO absolutely specific, practical and

recognizable. Each SO will be assigned some operational objectives (OO). An example of an

OO is – "increase the number of x by 30%", reduce the number of post-operative infections to

below 1% etc. The OO have the following characteristics:

1. It must have a fixed and recognizable duration, always less than 1 year. Intermediate

goals can be established to be carried out in different stages over time.

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2. The OOs should be clearly quantified. Indicators are needed to track their degree of

completion.

3. The OOs should be- achievable, must have a designated person in charge (who really

has the power to alter the performance of the unit or subunit, cost assigned to its

implementation, such that the total cost of all the OOs is equal to the total cost of the

strategic plan and funding and other resources (staff time, equipment, etc.) necessary to

achieve the objectives.

Once the OOs are formulated, the implementation of each will be integrated with that of the

others within a time-line of action that includes all of them and provides an overview of the links,

timing and sequence of tasks, as well as the combined efforts that the hospital has to perform at

every stage(2).

Assessment of the results:

Assessment of the results of the strategic plan should be done on a collective basis by the

strategic plan steering group and each working group. The frequency of the assessment should

be at least quarterly.

Based on the assessment findings, changes to one or several of the original OOs may be

proposed to the strategic plan steering group and these changes may be accepted or rejected.

Reformulation of the Strategy

The strategic plan should have the capacity to allow this change to occur, although the need for

change should be compelling and the reason for change should be thoroughly documented. An

SO should only be changed after deviations have been regularly observed over 1 year, or when

significant changes, unforeseeable during the initial planning stage, have occurred in the

environment or the hospital(2).

References:

1. Deazeley B. What role should teh Board of Directors play in strategic planning?2009 24.03.2017:[2 p.]. 2. Perera FdPR, Peiró M. Strategic planning in healthcare organizations. Revista Española de Cardiología (English Edition). 2012;65(8):749-54.

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3. Institute TG. Engaging the Board in Strategic Planning: Rationale, Tools, and Techniques. San Diego, CA 92122: The Governance Institute, 2007. 4. Steven B. Reed F. 2013 24.03.2017. Available from: http://www.beckershospitalreview.com/strategic-planning/5-intangible-benefits-of-hospital-strategic-planning.html.