Want FREE Templates on Organization, Change, & Culture? Download our FREE compilation of 50+ slides. This is an exclusive promotion being run on LinkedIn.

Flevy Management Insights Case Study
Operational Excellence Strategy for Telehealth Service Provider

There are countless scenarios that require Performance Measurement. Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Performance Measurement to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

Reading time: 10 minutes

Consider this scenario: A leading telehealth service provider is facing challenges in optimizing its performance measurement to enhance service delivery and operational efficiency.

Despite a 20% increase in user base, the organization has seen a 5% drop in patient satisfaction scores and a 10% increase in operational costs due to inefficiencies and technological constraints. The primary strategic objective of the organization is to improve operational excellence and patient satisfaction while reducing costs through better performance measurement and operational adjustments.

This organization, a pioneer in telehealth services, is at a critical juncture where its rapid growth has not been matched by its operational capabilities, leading to decreased patient satisfaction and increased costs. A closer look suggests that the core issues may stem from inadequate performance measurement systems and a lack of streamlined operational processes. The leadership team is concerned that without immediate and strategic intervention, these operational inefficiencies could significantly hinder the organization's ability to compete and fulfill its mission of providing accessible and high-quality health care.

Environmental Assessment

The telehealth industry is experiencing unprecedented growth, driven by technological advancements and increased demand for remote healthcare services. However, this growth comes with heightened competition and changing regulatory landscapes.

Understanding the competitive landscape involves examining the following primary forces:

  • Internal Rivalry: High, as existing healthcare providers and new entrants vie for market share in an increasingly crowded space.
  • Supplier Power: Moderate, given the number of technology vendors but mitigated by the growing number of alternatives.
  • Buyer Power: High, with patients demanding more convenient, faster, and cost-effective healthcare solutions.
  • Threat of New Entrants: High, due to low barriers to entry in the digital space and the scalability of telehealth platforms.
  • Threat of Substitutes: Moderate, with traditional in-person healthcare services still being preferred by a segment of the population.

Emergent trends in the industry include the integration of artificial intelligence for diagnostic support, an increased focus on mental health services, and the expansion of telehealth into chronic disease management. These trends signal significant shifts in industry dynamics, presenting both opportunities and risks:

  • Integration of AI technologies offers the opportunity to enhance diagnostic accuracy and efficiency but requires significant investment in technology and training.
  • Expanding services to include mental health and chronic disease management opens new revenue streams but also introduces complexity in service delivery and regulatory compliance.
  • Increasing consumer demand for telehealth services provides growth opportunities, but also necessitates robust technological infrastructure to support scalability.

A STEEPLE analysis reveals that technological and legal factors are the most significant external drivers impacting the telehealth industry. Technological advancements enable the development of innovative telehealth solutions, while legal and regulatory changes pose both challenges and opportunities for service delivery and expansion.

Learn more about Artificial Intelligence STEEPLE Competitive Landscape Environmental Assessment

For a deeper analysis, take a look at these Environmental Assessment best practices:

Market Entry Strategy Toolkit (109-slide PowerPoint deck)
Strategic Foresight and Uncertainty (51-slide PowerPoint deck)
Consolidation-Endgame Curve Framework (29-slide PowerPoint deck)
Strategic Analysis Model (Excel workbook)
Porter's Five Forces (26-slide PowerPoint deck)
View additional Performance Measurement best practices

Are you familiar with Flevy? We are you shortcut to immediate value.
Flevy provides business best practices—the same as those produced by top-tier consulting firms and used by Fortune 100 companies. Our best practice business frameworks, financial models, and templates are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience.

Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab

Internal Assessment

The organization possesses strong capabilities in providing telehealth services with a diverse range of offerings and a committed team. However, it faces challenges in maintaining operational efficiency and leveraging technology to its full potential.

A MOST Analysis reveals a misalignment between the organization's strategy, objectives, tactics, and values—particularly in areas relating to performance measurement and operational efficiency. This misalignment hinders the organization's ability to effectively respond to market demands and internal challenges.

A Value Chain Analysis highlights inefficiencies in service operations, particularly in patient onboarding and support processes. Streamlining these processes through technology and training can significantly enhance operational efficiency and patient satisfaction.

Core Competencies Analysis indicates that while the organization excels in patient care and has a strong market presence, it needs to develop competencies in performance measurement and operational efficiency to sustain its competitive advantage and support growth.

Learn more about Competitive Advantage Performance Measurement Value Chain Analysis

Strategic Initiatives

  • Develop and Implement an Advanced Performance Measurement System: This initiative aims to establish comprehensive metrics for operational efficiency and patient satisfaction, enabling data-driven decision-making. The expected value comes from improved service delivery and reduced operational costs. Resources required include technology investment, analytics expertise, and training programs.
  • Streamline Operational Processes through Technology Integration: By adopting new technologies, the organization can enhance service delivery efficiency and patient experience. This initiative will create value by reducing costs and improving patient satisfaction. Implementation will require investment in technology solutions and process reengineering.
  • Expand Telehealth Services into New Therapeutic Areas: This strategic move aims to leverage the growing demand for telehealth in mental health and chronic disease management, contributing to revenue growth and market differentiation. It will necessitate investments in specialized medical staff, technology adaptation, and market research.
  • Enhance Patient Onboarding and Support: Improving these key touchpoints can significantly impact patient satisfaction and retention. The initiative focuses on creating a seamless, user-friendly experience through digital tools and trained support staff. The value lies in increased patient loyalty and positive word-of-mouth. Resources needed include technology development and staff training.

Learn more about Market Research Revenue Growth

Performance Measurement 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.

What you measure is what you get. Senior executives understand that their organization's measurement system strongly affects the behavior of managers and employees.
     – Robert S. Kaplan and David P. Norton (creators of the Balanced Scorecard)

  • Operational Efficiency Rates: Measures improvements in service delivery times and resource utilization.
  • Patient Satisfaction Scores: Tracks changes in patient feedback and satisfaction levels post-implementation of new processes.
  • Cost Reduction Percentage: Quantifies the financial impact of streamlined operations and technology integration.
  • New Patient Acquisition Rates: Assesses the effectiveness of market expansion into new therapeutic areas.

These KPIs will offer insights into the success of the strategic initiatives in enhancing operational efficiency, patient satisfaction, and financial performance. They will also inform continuous improvement efforts and strategic adjustments.

For more KPIs, take a look at the Flevy KPI Library, one of the most comprehensive databases of KPIs available. Having a centralized library of KPIs saves you significant time and effort in researching and developing metrics, allowing you to focus more on analysis, implementation of strategies, and other more value-added activities.

Learn more about Flevy KPI Library KPI Management Performance Management Balanced Scorecard

Performance Measurement Deliverables

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

  • Performance Measurement Framework (PPT)
  • Operational Efficiency Improvement Plan (PPT)
  • Technology Integration Roadmap (PPT)
  • Market Expansion Analysis Report (PPT)

Explore more Performance Measurement deliverables

Performance Measurement Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Performance Measurement. These resources below were developed by management consulting firms and Performance Measurement subject matter experts.

Develop and Implement an Advanced Performance Measurement System

The organization chose to implement the OKR (Objectives and Key Results) framework to enhance its performance measurement system. OKRs have been instrumental in setting ambitious goals and tracking outcomes with measurable results. This framework proved to be particularly useful for this strategic initiative as it aligns teams and individuals around measurable goals, facilitating transparency and accountability. The team executed the framework as follows:

  • Defined clear, ambitious objectives for each department aligned with the strategic initiative of improving operational efficiency and patient satisfaction.
  • Identified 3-5 key results for each objective, which were specific, time-bound, and measurable, to track the progress of the initiative.
  • Conducted quarterly reviews to assess progress against the key results and refine objectives as necessary.

The utilization of the OKR framework led to a significant improvement in aligning the organization’s efforts towards enhancing operational efficiency and patient satisfaction. Teams became more focused on outcomes rather than outputs, which contributed to a 15% improvement in operational efficiency rates and a 20% increase in patient satisfaction scores within the first year of implementation.

Learn more about Objectives and Key Results

Streamline Operational Processes through Technology Integration

For this strategic initiative, the organization applied the Lean Six Sigma methodology to streamline operational processes through technology integration. Lean Six Sigma is renowned for its dual focus on eliminating waste (Lean) and reducing variation in processes (Six Sigma), making it an ideal choice for enhancing operational efficiency. The methodology was instrumental in identifying process inefficiencies and determining how technology could address these gaps. The process involved:

  • Mapping out all operational processes to identify non-value-added activities and bottlenecks.
  • Implementing technology solutions that directly addressed these inefficiencies, such as automated patient onboarding systems and AI-driven customer support tools.
  • Measuring the impact of these interventions on process efficiency and patient experience through before-and-after analysis.

The adoption of Lean Six Sigma principles facilitated a more structured approach to integrating technology into operations. As a result, the organization experienced a 25% reduction in process-related costs and a notable enhancement in the patient onboarding experience, contributing to higher overall patient satisfaction.

Learn more about Six Sigma

Expand Telehealth Services into New Therapeutic Areas

To guide the expansion of telehealth services into new therapeutic areas, the organization employed the Resource-Based View (RBV) framework. RBV focuses on leveraging a company's internal resources and capabilities as a basis for strategy formulation and competitive advantage. This perspective was particularly relevant for identifying the organization's unique strengths that could be applied to new service areas. Following this approach, the team:

  • Conducted an internal audit to identify resources and capabilities, such as existing technological infrastructure and medical expertise, that could be leveraged in new therapeutic areas.
  • Assessed the potential of these resources to provide competitive advantage in mental health and chronic disease management.
  • Developed a strategic plan for entering these new areas, including resource allocation, technology adaptation, and training requirements.

The application of the RBV framework enabled the organization to successfully expand its telehealth services into mental health and chronic disease management. This strategic move not only diversified the organization's service offerings but also led to a 30% increase in new patient acquisitions in these areas within the first six months.

Enhance Patient Onboarding and Support

The Service-Dominant Logic (SDL) framework was adopted to enhance patient onboarding and support. SDL posits that the primary role of businesses is to provide service and that value is co-created through interactions between providers and consumers. This perspective was crucial for rethinking the patient onboarding and support processes as interactive value-creation opportunities. The implementation steps included:

  • Redesigning the patient onboarding process to be more interactive and responsive, incorporating real-time feedback mechanisms.
  • Training customer support staff on SDL principles, emphasizing the co-creation of value in every patient interaction.
  • Measuring the impact of these changes on patient satisfaction and retention rates.

By adopting the SDL framework, the organization transformed its approach to patient onboarding and support, leading to a more personalized and engaging patient experience. This strategic initiative resulted in a 40% improvement in patient retention and a 25% increase in positive patient feedback, underscoring the success of adopting a service-dominant approach to healthcare delivery.

Additional Resources Relevant to Performance Measurement

Here are additional best practices relevant to Performance Measurement from the Flevy Marketplace.

Did you know?
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.

Key Findings and Results

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

  • Operational efficiency rates improved by 15% through the implementation of the OKR framework, aligning departmental objectives with strategic goals.
  • A 25% reduction in process-related costs was achieved by applying Lean Six Sigma methodology for technology integration in operational processes.
  • New patient acquisitions in expanded telehealth services areas increased by 30% within six months, leveraging the Resource-Based View framework.
  • Patient retention improved by 40%, and positive patient feedback increased by 25% after enhancing patient onboarding and support using the Service-Dominant Logic framework.
  • Patient satisfaction scores rose by 20% following the comprehensive implementation of strategic initiatives focused on operational efficiency and service delivery.

The strategic initiatives undertaken by the organization have largely been successful, evidenced by significant improvements in operational efficiency, cost reduction, patient satisfaction, and retention. The use of structured frameworks such as OKR, Lean Six Sigma, RBV, and SDL has provided a disciplined approach to addressing the organization's challenges, leading to measurable positive outcomes. However, the results were not uniformly successful across all metrics. For instance, while patient satisfaction and retention saw considerable gains, the report does not specifically address whether the 10% increase in operational costs was effectively countered beyond the mentioned process-related cost reductions. This suggests that while efficiency and patient-facing improvements were achieved, the overall cost structure may still be an area needing attention. Additionally, the rapid expansion into new therapeutic areas, though successful, could strain resources and dilute focus if not managed carefully. Alternative strategies could include a phased expansion approach or deeper investment in predictive analytics to better anticipate market demands and operational stress points.

For next steps, it is recommended to conduct a thorough review of the cost structure and identify areas where inefficiencies persist, possibly employing more advanced analytics and AI technologies to predict and mitigate cost overruns. Further, the organization should consider establishing a dedicated innovation lab to explore emerging technologies and patient care models, ensuring it remains at the forefront of telehealth services. Finally, a continuous feedback loop from patients and frontline staff will be crucial in maintaining service quality and operational responsiveness as the organization continues to grow.

Source: Operational Excellence Strategy for Telehealth Service Provider, Flevy Management Insights, 2024

Flevy is the world's largest knowledge base of best practices.

Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.

Read Customer Testimonials

Additional Flevy Management Insights

Download our FREE Strategy & Transformation Framework Templates

Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S Strategy Model, Balanced Scorecard, Disruptive Innovation, BCG Experience Curve, and many more.