Smart strategic planning for cardiovascular services

Healthcare Financial Management, Dec, 2005 by Karen Hartman

Cardiovascular disease remains the top cause of death in the United States. As the nation's elderly population grows, the need for advanced cardiovascular services, in both urban and community settings, will rise exponentially over the next decade. Hospital C-suite members should put smart strategic planning for the cardiovascular services service line on the front burner. Hospitals that implement a cardiovascular program strategic plan can avoid volume erosion and maintain profitability.

Cardiovascular services can account for up to 40 percent of the net revenue of an acute care hospital, regardless of its size or scope of services. Successful cardiovascular programs can help make up for revenue declines in a hospital's other service areas. Hospitals need to quickly react to industry changes by retooling their cardiovascular programs to meet changing needs.

The number of cardiac and vascular specialty programs is growing nationwide. As some states ease certificate of need regulations, and with continuing efforts to ensure safe clinical practice in hospital settings, hospitals increasingly are providing advanced cardiac and vascular care. As a result, industry competition for the profitable cardiovascular patient is on the rise. In fact, The Corazon National Survey for Benchmarking Cardiac Program Performance shows that 64 percent of the 101 national participants plan to add services or programs to their cardiovascular continuum over the next year, with many focused on the vascular and heart failure specialties. The survey also found that 78 percent of respondents are planning new space as a result of facility renovation or expansion. The most commonly identified expansions cited are catheterization labs and beds devoted to cardiac patients.

The Need for a Plan

Considering the competitive environment and the difficulty involved with creating a progressive, but practical course of action for a large, complex clinical service line such as cardiovascular, the best way to outdistance the competition and be on the forefront of industry change is to have a smart strategic plan in place. Effective planning is critical to the smooth functioning of this vital clinical specialty, especially when planning for major changes in service offerings or facility design. A formal process can ensure that long-term investments for the cardiac continuum produce lasting results. But this plan needs to be integrated with the financial plans of the organization and/or the capital situation of the cardiovascular service line.

Hospitals' capital needs include additional hospital capacity as the elderly population grows, IT upgrades, and the required amenities of future cardiac patients--baby boomers.

Strategic planning should include the formation of a cardiovascular advisory committee that includes key stakeholders, such as representatives from administration and the medical staff. This dedicated group needs to commit to attending the facilitation sessions and to actively and honestly contributing to the process. This feat can be difficult to accomplish given the many opinions and potential barriers that can arise when a diverse group of administrators and physicians come together on one project, especially one that everyone may not support from the start. By communicating openly and honestly, the committee can go a long way in generating trust and gaining support. Up-front communication with key stakeholders can save time and effort and eliminate conflict. Ensuring that all affected parties are informed of any changes in responsibility and understand how a change will affect them demonstrates that the leadership is sensitive to everyone's ideas. Arriving at a consensus and documenting the plans can keep a program on an established path from year to year.

Strategic Planning Milestones

The most successful plans begin with a time line (usually three to four months) that includes key actions, individuals accountable, and due dates. The following milestones should be completed in the strategic planning process.

Internal assessment. Members of the executive team, board of directors, medical staff, and management team should be interviewed by an unbiased party (i.e., an outside consultant) as early as possible regarding their ideas about the facility's current market situation, the unique characteristics of the cardiovascular program, and opportunities for cardiac service line growth or expansion, any operational issues, and commitment to planning goals. These interviews can help leaders understand the diverse viewpoints involved. An evaluation of the current competition, the external market, and internal cardiovascular operations and a discussion about program goals and initiatives should also be addressed with this group.

External market analysis. A market share and utilization data analysis defining the current cardiac service area, trending utilization statistics for cardiac procedures in the region, predicting population demographics, and presenting mortality and out-migration statistics should provide detail for the past three years and anticipated changes for the next five years. The hospital should use this information to project utilization and market share, taking into account practice and technology changes and population demographics. The projections should also include any changes expected due to new competitors, outreach opportunities, and physician staffing needs.