The financial performance of Middlefield Hospital can be improved by implementing a strategic planning in all the institutions departments. The strategic plan should cover the quality improvement program of the hospital, the health plan of the employees and the inpatient mental health services and neo-natal intensive care units of the hospital. The strategic plan employed will assign the CEO the duty of implementing the strategy in order to improve the financial performance of the firm. The role of the hospital’s board in adopting and implementing the strategy is to ensure that the stakeholders’ input is incorporated in the strategic planning process and that the firm’s goals are propelled by stakeholders’ requirement and expectations (Lemak & Goodrick, 2003).
The participation of every stakeholder is essential in building the institutions relationship with the key stakeholders which is important in expanding the institution’s market share. Adopting an appropriate strategic plan is directly associated with increased hospital profit margin. The extent to which the strategic plan is developed and implemented in the organization will determine the financial outcome measures (Lemak & Goodrick, 2003). Some of the items to include in the strategic plan to improve the financial status of the institution and increase its market share include:
Develop a risk strategy
The strategic plan needs to include an appropriate risk strategy in order to regain its lost market share. The risk strategy will begin by assessing the competitive risks since competition with the neighboring hospital has seen Middlefield Hospital loose a substantial share of the market. The hospital management should at this point ensure that the payer mix which is composed of uninsured patients and less patients with commercial insurance is transformed. The management should offer motivations to its patients to ensure that they get insurance. The insurance providers will ensure that the hospital improves and maintains its internal control standards and systems which is core to improvement of financial performance. This will increase the overall reimbursement and net income for the hospital. The management should invest funds or set aside funds to run the process which will yield positive results in the long run. The risk strategy should take into consideration the pricing pressures of the hospitals services and the rising costs of recourses and facilities used in the hospitals operations (Kovner, & Rundall, 2006).
Develop a growth strategy
The strategic plan should also include a well planed growth strategy. The management should set appropriate targets to guide its financial improvement objective. The growth strategy will be based on an analysis of the current markets and the demand for medical services in the area. The hospital can consider expansion by recruiting new talents and increase the variety of services offered by the institution. Since this is a long term growth strategy, the management should set aside funds from the hospital’s kitty to finance the recruitment process as well as the overall strategic plan. It would be necessary to contract a team of researchers or analyst to conduct a quick market research which will be useful in the implementation of the growth strategy (Orlikoff, & Totten, 2006).
Develop a competitive strategy
The strategic plan will also entail a competitive strategy. The competition in the medical field around Middlefield Hospital business environment is intensifying with the neighboring institutions commanding a higher proportion of the market compared to the Middlefield Hospital’s share. The hospital needs to launch appropriate defence mechanism to counter the competition. The management should consider setting up a free medical awareness center similar to that of the competitor organization in an attempt to pull back its customers. It is logical that the facility will yield similar results to those of the competitor considering that the two are found in the same locality. This facility should serve the entire institutions departments including the inpatient mental health services and neo-natal intensive care units, the psychiatrics department and the pharmacy department (Orlikoff, & Totten, 2006).
The overall performance improvement should exhibit three main characteristics; a well laid out strategic plan, assigning the main role to the implement of the plan to the CEO and involving the board of the hospital in the execution of the plan. These three combinations will definitely contribute to the success of the plan. Getting the strategic plan into operation will require the commitment of the management in both time and resources. The main priority should be on the maintenance of quality and financial performance. Although this strategic plan might fail to produce substantial financial results in the short run, the benefits will definitely be realized in the long run (Orlikoff, & Totten, 2006).