Flevy Management Insights Case Study
Operational Resilience Plan for Ambulatory Health Care Services Provider
     David Tang    |    Creative Thinking


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TLDR A top ambulatory care provider experienced declining patient satisfaction and efficiency due to outdated tech and rising telehealth competition. By launching a patient-centric telehealth service and leveraging advanced analytics, the organization boosted patient satisfaction by 25% and operational efficiency by 15%, underscoring the need for innovation and strategic planning to tackle market challenges.

Reading time: 11 minutes

Consider this scenario: A leading ambulatory health care services provider is at a critical juncture, requiring creative thinking to navigate its strategic challenges.

The organization faces a 20% decrease in patient satisfaction scores and a 15% drop in operational efficiency, attributed to outdated technological infrastructure and inefficient patient flow processes. Externally, the rapid evolution of health care regulations and increasing competition from telehealth services have significantly impacted its market position. The primary strategic objective is to enhance operational resilience, improving patient satisfaction and operational efficiency to secure its competitive edge in the health care services market.



This organization finds itself struggling to keep pace with the rapid changes in health care delivery, suggesting that the core issues may be rooted in its slow adoption of technology and resistance to innovative process changes. Additionally, the lack of a patient-centric approach in service design and delivery has become apparent, affecting the overall patient experience and operational efficiency.

Strategic Planning

The health care industry is currently experiencing significant transformation, driven by technological advancements and changing patient expectations. Ambulatory health care services, in particular, are at the forefront of this change, offering a convenient and cost-effective alternative to traditional hospital care.

To understand the competitive landscape, it's critical to analyze the forces shaping the industry:

  • Internal Rivalry: High, fueled by the proliferation of ambulatory care centers and specialized clinics offering similar services.
  • Supplier Power: Moderate, with a wide range of medical equipment and technology suppliers, but with certain key technologies patented and controlled by a few.
  • Buyer Power: Increasing, as patients have more options and information on health care providers, leading to higher expectations and demand for quality care.
  • Threat of New Entrants: High, particularly from non-traditional health care companies venturing into telehealth and mobile health services.
  • Threat of Substitutes: High, with telehealth services offering a compelling alternative to in-person visits for certain types of care.

Emergent trends in the industry include the rapid adoption of telehealth technologies, an increasing focus on patient-centric care models, and the integration of artificial intelligence for diagnostic and operational purposes. These trends signal major changes in industry dynamics, providing both opportunities and risks:

  • Increased demand for telehealth services presents an opportunity to expand service offerings but also risks cannibalizing traditional in-person visit revenues.
  • The shift towards patient-centric care models offers the chance to differentiate through superior patient experience but requires significant operational and cultural adjustments.
  • Artificial intelligence and machine learning promise to enhance diagnostic accuracy and operational efficiency but require substantial investments in technology and training.

A STEEPLE analysis reveals critical external factors influencing the industry, including technological advancements that enable new forms of care delivery, evolving health care regulations, and changing societal expectations towards health care accessibility and quality. These factors underscore the need for ambulatory health care providers to adapt swiftly to remain competitive.

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Internal Assessment

The organization boasts a strong reputation for quality care but is hampered by outdated processes and technology, impacting its ability to meet evolving patient expectations.

SWOT Analysis reveals strengths in the provider's established market presence and experienced medical staff. Opportunities lie in leveraging technology to enhance patient experience and operational efficiency. Weaknesses include a lack of digital infrastructure and resistance to change among staff. Threats encompass the rapid growth of telehealth services and regulatory changes affecting operational practices.

An Organizational Design Analysis highlights the current hierarchical structure as a barrier to quick decision-making and innovation. A more agile and decentralized organizational design could foster innovation and responsiveness to market changes.

The 4 Actions Framework Analysis suggests eliminating redundant administrative processes, reducing reliance on outdated technologies, raising standards for patient experience, and creating new services such as telehealth consultations.

Strategic Initiatives

  • Implement a Patient-Centric Telehealth Service: This initiative aims to expand access to care and improve patient satisfaction by offering telehealth services. The expected value includes increased patient loyalty and opening up new revenue streams. It will require investments in telehealth platforms, training for staff, and marketing to inform patients of new services.
  • Adopt Advanced Health Care Analytics: By leveraging data analytics, the organization can improve operational efficiency and patient outcomes. This initiative should lead to better resource allocation and personalized care plans. Investments needed include analytics software and training for data analysis teams.
  • Revamp Organizational Structure to Foster Creative Thinking: Restructuring the organization to be more agile and less hierarchical aims to enhance innovation and responsiveness. The intended impact is quicker decision-making and a culture that encourages creative solutions to operational challenges. This will require change management expertise and potentially external consulting support.

Creative Thinking Implementation KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.


You can't control what you can't measure.
     – Tom DeMarco

  • Patient Satisfaction Scores: An essential metric to assess the impact of telehealth services and overall patient experience improvements.
  • Operational Efficiency Ratios: Measures such as patient throughput and administrative cost per patient visit will indicate the success of process and technology enhancements.
  • Employee Engagement Scores: High engagement will be critical for successfully navigating organizational changes and fostering a culture of innovation.

These KPIs will provide insights into the effectiveness of the strategic initiatives, highlighting areas of success and identifying potential gaps for further action.

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Stakeholder Management

Successful implementation of the strategic initiatives necessitates the support and involvement of key stakeholders, including medical staff, administrative personnel, technology partners, and patients.

  • Medical Staff: Frontline providers essential for delivering telehealth services and providing direct patient care.
  • Administrative Personnel: Responsible for managing operational changes and implementing new processes.
  • Technology Partners: Vendors and IT teams critical for the deployment and maintenance of new health care technologies.
  • Patients: The beneficiaries of improved care delivery models, whose feedback will be vital for continuous improvement.
  • Regulatory Bodies: Ensure compliance with health care regulations and standards for new services.
Stakeholder GroupsRACI
Medical Staff
Administrative Personnel
Technology Partners
Patients
Regulatory Bodies

We've only identified the primary stakeholder groups above. There are also participants and groups involved for various activities in each of the strategic initiatives.

Learn more about Stakeholder Management Change Management Focus Interviewing Workshops Supplier Management

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Creative Thinking Deliverables

These are a selection of deliverables across all the strategic initiatives.

  • Telehealth Implementation Plan (PPT)
  • Operational Efficiency Improvement Roadmap (PPT)
  • Organizational Design Transformation Framework (PPT)
  • Health Care Analytics Capability Development Plan (PPT)

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Implement a Patient-Centric Telehealth Service

The strategic initiative to implement a patient-centric telehealth service was significantly supported by the application of the Value Proposition Canvas (VPC) and the Service-Dominant Logic (SDL) framework. The VPC, developed by Alex Osterwalder, is instrumental in ensuring that the services offered align perfectly with the patients' needs and expectations. It was chosen because it focuses on understanding the customer profile deeply, including their jobs, pains, and gains, and how the service's value proposition can alleviate pains and create gains. The organization applied the VPC through the following steps:

  • Conducted comprehensive patient interviews and surveys to map out their jobs, pains, and gains in the context of telehealth services.
  • Designed the telehealth service offering to directly address the identified patient pains and support their health-related jobs, ensuring the service provided clear gains over traditional in-person visits.

Simultaneously, the SDL framework was utilized to shift the organization's mindset from a goods-dominant logic to a service-dominant one, where the focus is on the co-creation of value with patients. This approach was vital for the telehealth initiative because it emphasizes the importance of interactions between the provider and the patient in creating valuable health outcomes. The SDL framework was implemented as follows:

  • Reframed the organization’s understanding of value creation, emphasizing patient engagement and interaction as key components of the telehealth service.
  • Developed training programs for healthcare providers to enhance their skills in delivering services through telehealth platforms, fostering a better patient-provider interaction.

The results of implementing these frameworks were transformative. The Value Proposition Canvas ensured that the telehealth services were directly aligned with patient needs, leading to higher adoption rates and increased patient satisfaction. Meanwhile, adopting the Service-Dominant Logic framework shifted the organizational culture towards a more patient-centric approach, enhancing the overall quality of care. These strategic moves not only improved patient outcomes but also positioned the organization as a leader in innovative telehealth services.

Adopt Advanced Health Care Analytics

For the strategic initiative to adopt advanced health care analytics, the organization employed the Data-Driven Decision-Making (DDDM) and the Capability Maturity Model Integration (CMMI) frameworks. DDDM was chosen for its effectiveness in fostering an organizational culture that prioritizes data in strategic decision-making processes. It's particularly useful in health care settings for optimizing operational efficiency and patient care through evidence-based decisions. The organization implemented the DDDM framework in the following manner:

  • Integrated comprehensive data collection mechanisms across all patient touchpoints to gather relevant and actionable data.
  • Developed analytics tools and dashboards that provided insights into operational efficiency and patient care effectiveness, facilitating data-driven decisions.

Concurrently, the CMMI framework was applied to assess and enhance the maturity of the organization’s processes related to data analytics. CMMI is invaluable for identifying process inefficiencies and guiding organizations toward systematic improvements. The application of CMMI involved:

  • Evaluating current data analytics processes against the CMMI levels to identify areas for improvement.
  • Implementing structured process improvement initiatives to advance the organization's maturity in utilizing data analytics for health care delivery.

The adoption of DDDM and CMMI frameworks significantly advanced the organization's capabilities in health care analytics. This strategic initiative led to more informed decision-making, improved patient care, and enhanced operational efficiency. The systematic approach to data and process maturity has set a strong foundation for continuous improvement in the organization's health care analytics capabilities.

Revamp Organizational Structure to Foster Creative Thinking

The initiative to revamp the organizational structure to foster creative thinking was powerfully aided by the deployment of the Kotter’s 8-Step Change Model and the Design Thinking framework. Kotter’s Model was selected for its comprehensive approach to managing change in organizations, emphasizing the importance of creating a sense of urgency and building a coalition for sustainable change. The organization executed Kotter’s steps in the following way:

  • Communicated a clear vision for the change, highlighting the need for a more agile and innovative organizational structure.
  • Identified and mobilized a coalition of change agents across the organization who were trained and empowered to lead the transformation efforts.

Design Thinking was simultaneously utilized to ensure that the new organizational structure was human-centered, promoting creativity and innovation at all levels. This framework is crucial for developing solutions that are deeply empathetic to the needs of both employees and patients. The implementation of Design Thinking proceeded as follows:

  • Conducted workshops and empathy interviews with employees across all levels to understand their perspectives on barriers to creativity and innovation within the current structure.
  • Prototyped and tested new organizational designs that promoted cross-functional collaboration and empowered lower-level employees to contribute ideas.

The integration of Kotter’s 8-Step Change Model and Design Thinking into the organizational restructuring initiative yielded significant outcomes. The organization became more adaptable and responsive to changes in the health care landscape, with a noticeable increase in employee engagement and innovation. This strategic shift not only enhanced the organization's internal culture but also positively impacted its ability to deliver patient-centric care through creative and innovative solutions.

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Implemented a patient-centric telehealth service, leading to a 25% increase in patient satisfaction scores.
  • Adopted advanced health care analytics, resulting in a 15% improvement in operational efficiency.
  • Revamped organizational structure to foster creative thinking, which increased employee engagement scores by 20%.
  • Introduced training programs for healthcare providers on telehealth platforms, enhancing patient-provider interactions.
  • Integrated comprehensive data collection mechanisms, significantly improving the quality of patient care and operational decision-making.
  • Conducted workshops and empathy interviews, leading to a more adaptable and innovative organizational culture.

The strategic initiatives undertaken by the organization have yielded significant improvements across key areas, notably in patient satisfaction, operational efficiency, and employee engagement. The implementation of a patient-centric telehealth service directly addressed the previously identified gap in meeting evolving patient expectations, as evidenced by the substantial increase in patient satisfaction scores. The adoption of advanced health care analytics and the revamping of the organizational structure have collectively enhanced operational efficiency and fostered a culture of innovation and responsiveness to change. However, while these results are commendable, the outcomes in terms of market position against the backdrop of increasing competition from telehealth services were not explicitly mentioned, suggesting a potential area of underperformance or lack of measurement. Additionally, the integration of technology and training programs, although successful, might have benefited from a more aggressive approach towards scaling and innovation to further solidify the competitive edge in a rapidly evolving healthcare landscape.

Given the successes and areas for improvement identified, the recommended next steps include a deeper focus on measuring and enhancing the organization's market position relative to the competition, particularly in the telehealth domain. This could involve strategic partnerships, further technological advancements, or expanded service offerings. Additionally, scaling the successful initiatives, such as the advanced health care analytics and telehealth services, through increased investment and broader implementation across all operational areas, could amplify the benefits realized. Finally, continuous improvement through regular feedback loops with patients and employees will ensure that the organization remains adaptable and responsive to emerging trends and challenges in the healthcare industry.


 
David Tang, New York

Strategy & Operations, Digital Transformation, Management Consulting

The development of this case study was overseen by David Tang.

To cite this article, please use:

Source: Innovative Experience Enhancement in Hospitality, Flevy Management Insights, David Tang, 2024


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