HCM 5020 Module 4 Planning for Growth Paper Example

Winning Back the Outpatient Scan: A Growth Plan for Hospital Imaging, Element by Element

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Master of Science in Healthcare Management, Thomas Edison State University

HCM-5020: Healthcare Administrator Leadership

Mentor Name

Month Day, Year

Winning Back the Outpatient Scan: A Growth Plan for Hospital Imaging, Element by Element

Over three years, the outpatient MRI and CT volume at the composite 260-bed Monmouth County hospital where I direct imaging services fell by 18%, while two freestanding imaging centers opened within ten miles. Outpatient imaging is one of the department's main sources of margin, and losing it raises the cost per scan for every inpatient and emergency study as fixed costs are spread over fewer exams. The executive team has asked for a growth plan. This paper first identifies the elements that research and practice suggest a successful plan needs, and then builds the imaging growth plan around them, showing how each element applies.

What Makes a Plan Succeed

Strategic planning is common in hospitals, but its value has rarely been tested. Kaissi and Begun (2008) surveyed 138 hospital chief executives in Texas and found that most hospitals had a strategic plan and followed widely recommended practices, such as involving physicians and the board. Having a plan, assigning responsibility for it to the chief executive and involving the board were each associated with better financial performance, although the study's timing meant it could not establish cause and effect. For a department plan, the lesson is that the elements that link a plan to the organization's leadership, ownership and oversight matter as much as its content.

Drawing on that evidence and on standard practice, a growth plan needs seven elements: a clear purpose linked to the organization's mission; an honest analysis of the current situation, including competitors and customers; specific, measurable objectives; strategies that explain how the objectives will be reached; the resources and budget required; named accountability with a timeline; and measures with points at which the plan will be revised. Each is applied below.

Purpose and Situation Analysis

The plan's purpose is to keep outpatient imaging financially sustainable so the hospital can maintain round-the-clock imaging for emergency and inpatient care, which the community depends on. The situation analysis explains why volume left. Interviews with 14 referring physicians' offices and a review of 300 scans that went elsewhere identified three causes. First, price: patients with high-deductible plans were quoted hospital outpatient prices two to three times higher than the freestanding centers charged for the same MRI. Second, access: the hospital's next available outpatient MRI was nine days away, against two to three days at competitors. Third, convenience: parking and check-in at the hospital took longer.

Price deserves special attention. Cooper et al. (2019) analyzed claims for privately insured patients and found that hospital prices varied widely across and within markets, including for standardized services such as MRI, and that hospitals facing less competition charged more. Patients are beginning to respond. Whaley et al. (2014) found that people who searched a price transparency platform before an advanced imaging scan paid about 13% less than those who did not. As more patients carry high deductibles and price tools spread, the hospital's outpatient price is no longer invisible.

The analysis also looked inward. The department's own data showed that 11% of scheduled outpatient MRI slots went unused because of late cancellations and no-shows, and that inpatient studies frequently bumped outpatients from the schedule in the afternoon. Some of the access problem was therefore self-inflicted and could be fixed without new equipment, which shaped the order of the strategies below.

Objectives and Strategies

The plan sets three objectives for the next 24 months: restore outpatient MRI and CT volume to its level of three years ago, reduce the next available outpatient MRI appointment to three days or fewer, and achieve a self-pay MRI price within 15% of the lowest local competitor.

Three strategies follow. The first is structural: convert outpatient imaging to a freestanding imaging center in leased space near the hospital, jointly owned with the radiology group, which would bill at non-hospital rates and offer a published self-pay price. The second is access: add evening and Saturday MRI hours, using the existing scanner and two additional technologists, and open online self-scheduling for routine studies. The third is relationships: assign a liaison to the 30 highest-volume referring practices, with a guaranteed report turnaround and a direct phone line for scheduling problems.

Resources, Accountability and Risks

The plan requires about $3.1 million in capital for the new center's buildout and one new MRI unit, the radiology group's matching investment, and two additional technologists. The financial model projects break-even in the third year if volume returns as planned. Accountability is assigned by element: I lead the plan and report monthly to the vice president of operations; the radiology group's managing partner owns report turnaround; the finance director owns pricing and the financial model; and the hospital's board will review the plan before the capital commitment, consistent with the evidence that board involvement is part of effective planning. The timeline phases access improvements in the first six months, before the new center opens in month 15.

The main risks are a lower price reducing revenue faster than volume returns, a dispute with the radiology group over joint venture terms, and technologist recruitment in a tight market. Each has a contingency: a pricing review at month nine, a written exit clause in the venture agreement and a sign-on bonus funded within the budget.

Measures and Revision Points

The plan will track monthly outpatient MRI and CT volume, next available appointment, the share of referred scans completed at the hospital or its center, self-pay price relative to competitors and the contribution margin per scan. At months 6, 12 and 18, I will report results against each objective and recommend whether to continue, adjust or stop each strategy. A plan that cannot be revised becomes a liability when conditions change, and the imaging market is changing quickly.

Conclusion

A successful plan depends on more than its strategies. It needs a purpose tied to the mission, an honest analysis of why the problem exists, measurable objectives, resources, named owners, board oversight and points at which it will be revised. Built this way, the imaging growth plan addresses price, access and relationships together, the three reasons patients left, and gives leaders a clear way to judge whether it is working.

References

Cooper, Z., Craig, S. V., Gaynor, M., & Van Reenen, J. (2019). The price ain't right? Hospital prices and health spending on the privately insured. The Quarterly Journal of Economics, 134(1), 51-107. https://doi.org/10.1093/qje/qjy020

Kaissi, A. A., & Begun, J. W. (2008). Strategic planning processes and hospital financial performance. Journal of Healthcare Management, 53(3), 197-208.

Whaley, C., Schneider Chafen, J., Pinkard, S., Kellerman, G., Bravata, D., Kocher, R., & Sood, N. (2014). Association between availability of health service prices and payments for these services. JAMA, 312(16), 1670-1676. https://doi.org/10.1001/jama.2014.13373