Defining healthcare strategic planning and healthcare strategic financial planning
Strategic planning in healthcare is the process by which a healthcare organization defines its future vision and goals and maps a course to achieve those goals. Healthcare leaders engage in the strategic planning process to ensure the organization has a long-term roadmap to grow and continue to fulfill its mission for the communities it serves. Through the process, healthcare leaders determine priorities — such as community outreach or increasing patient access — and how best to position their organizations for sustained financial health, competitive differentiation, and strategic growth.
Strategic financial planning in healthcare is a critical component of broader strategic planning by which healthcare leaders define how to allocate financial resources to achieve the organization’s short- and long-term strategic goals. Developing the strategic financial plan includes evaluating the organization’s current assets and operations. Leaders then must determine how best to manage costs and allocate facilities, staff, and other resources to optimize financial outcomes and enhance patient care and access in pursuit of strategic objectives.
Importance of strategic planning and strategic financial planning in healthcare
Why is strategic planning in healthcare important? A sound strategic plan aligns an organization around its mission and long-term goals. This is increasingly vital to ensuring ongoing success and viability in an evolving healthcare environment. The strategic plan establishes guideposts to help organizations better navigate future unknowns. It also establishes a defined mission that can help keep organizational leaders, staff, and other stakeholders engaged and working together toward a common purpose.
A healthcare strategic financial plan is important because it defines how healthcare organizations plan to accomplish goals laid out in the broader strategic plan. In an industry in which most organizations historically rely on tight operating margins, it aims to ensure resources are used efficiently and effectively to optimize the delivery of healthcare services. The strategic financial plan provides clarity for healthcare leaders and other stakeholders on how resources should be allocated and what steps must be taken to achieve organizational objectives.
Key components of healthcare strategic planning and strategic financial planning
The core elements of a strategic plan in healthcare are:
- Clear mission, vision, and values
- Defined objectives
- Detailed strategies and tactics
- Scorecards for monitoring success
- Key components of healthcare strategic planning and strategic financial planning
The core components of a strategic financial plan in healthcare are:
- Financial analysis and forecasting
- Goal setting and prioritization
- Capital planning/resource allocation and budgeting
- Risk management
Steps in the healthcare strategic planning process
The following are key steps in how to develop a strategic plan in healthcare:
- Define your organization’s mission, vision, and values
Perform a gap analysis
Define organizational goals and priorities
Formulate your strategies
Develop the strategy execution plan
Execute the strategic plan
Monitor progress and recalibrate as needed
Best practices in healthcare strategic planning and strategic financial planning
Four best practices in strategic planning in healthcare include:
- Ensure alignment with mission, vision, and values. The mission, vision, and values help define an organization’s core identity and purpose. All present and future work — including objectives outlined in the strategic and financial plans — should center around that identity, with the aim of fulfilling the organization’s purpose within the communities it serves.
- Collaborate with key stakeholders. An effective strategic planning process requires broad involvement from stakeholders across the organization to ensure the plan is comprehensive and actionable, and to build buy-in. By involving individuals at various levels of the organization, the strategic and financial plan will benefit from different perspectives and areas of expertise, thus enhancing the chances for success.
- Continuously monitor and evaluate plan progress. In healthcare, organizations cannot afford to have static strategic or financial plans. Routinely monitoring KPIs relative to strategic goals can help healthcare leaders track progress and make adjustments as needed when performance veers off course.
- Build flexibility to adapt to changing conditions. Individual markets and the broader healthcare industry are constantly changing. Healthcare leaders should keep lessons learned in recent years top-of-mind and remember the importance of staying agile and prepared for any challenges that may arise, expected or unexpected.
An example of healthcare strategic planning in healthcare successes
Leaders at a Texas health system sought to expand the gastric services the organization offered, including bringing in a new surgeon, and purchasing a high-end surgical system. The initiative required a $2.5 million capital investment. Through the strategic planning process, organizational leaders identified the goals, assessed competitors and the local market, and built a strong business case for the investment, which ultimately was approved by the board. Learn more examples of strategic planning in healthcare.
Strategic planning in healthcare organizations is essential. Patient needs are continually evolving thanks to today’s fast-paced environment and the growing number of choices of healthcare providers and care options. At the same time, healthcare leaders have access to nearly real-time patient data to better understand their patient population in ways not possible in the past.
To ensure the long-term success of their organizations, healthcare leaders must embrace comprehensive strategic planning and strategic financial planning processes. Such processes help to build engagement, align plans with an organization’s mission, vision, and values, and chart a clear path forward for stakeholders on where the organization is headed and how it plans to navigate a constantly evolving landscape to get there.