TLDR A mid-sized geriatric healthcare provider saw a 20% drop in patient retention and outdated tech, affecting its valuation. By adopting telehealth and an Operational Excellence Program, it boosted patient retention by 15% and improved market valuation by 18%, underscoring the value of Innovation and Strategic Planning in tackling operational inefficiencies.
TABLE OF CONTENTS
1. Background 2. Strategic Analysis 3. Internal Assessment 4. Strategic Initiatives 5. Valuation Implementation KPIs 6. Stakeholder Management 7. Valuation Deliverables 8. Valuation Best Practices 9. Technology Upgrade 10. Telehealth Services 11. Operational Excellence Program 12. Patient-Centric Care Model 13. Valuation Improvement Plan 14. Valuation Case Studies 15. Additional Resources 16. Key Findings and Results
Consider this scenario: A mid-size healthcare provider specializing in geriatric care is facing valuation challenges due to a 20% decrease in patient retention over the past year.
The organization is grappling with internal issues like outdated technology and inefficient operational processes, alongside external pressures such as increased competition and shifting regulatory environments. The primary strategic objective of the organization is to enhance patient retention and operational efficiency to improve overall valuation.
This healthcare provider is a mid-size entity within the geriatric care sector, experiencing a 20% decrease in patient retention, impacting its valuation. The root causes of these challenges may lie in its outdated technology and inefficient operation processes. Additionally, increased competition and changing regulatory landscapes exacerbate these issues.
The geriatric care industry is experiencing rapid growth due to an aging population, with increased demand for specialized healthcare services. There are 5 structural forces that govern the competitive nature of every industry, as theorized by Michael Porter:
Emergent trends include technological advancements in patient care and a shift towards home-based healthcare services. These trends result in both opportunities and risks:
PEST analysis reveals that political factors such as healthcare policies and regulations play a significant role in shaping the industry. Economic trends indicate a growing demand for cost-effective care solutions. Social factors highlight an increasing preference for personalized care. Technological advancements offer both opportunities for innovation and challenges in terms of adoption and integration.
For a deeper analysis, take a look at these Strategic Analysis best practices:
The organization has strong expertise in geriatric care but faces challenges with outdated technology and inefficient operations.
Strengths include specialized knowledge in geriatric care and a committed workforce. Opportunities involve adopting new technologies and expanding home-based care services. Weaknesses are outdated technology and operational inefficiencies that hinder patient retention. Threats include increased competition and regulatory changes that may impact operations.
4 Actions Framework Analysis
The organization needs to Eliminate outdated processes and technology that slow down operations. It should Reduce the dependency on manual processes. Raise the level of patient care quality through personalized treatment plans. Create new revenue streams by introducing telehealth services and home-based care options.
Primary activities include inbound logistics (patient intake), operations (medical care), outbound logistics (patient discharge), marketing & sales (patient acquisition), and service (ongoing care). Support activities involve technology infrastructure, human resources, and procurement. Analyzing these activities reveals inefficiencies in patient intake and discharge processes, and opportunities to enhance service delivery through advanced medical technologies.
The leadership team formulated strategic initiatives based on the comprehensive understanding gained from the previous industry analysis and internal capability assessment, outlining specific, actionable steps that align with the strategic plan's objectives over a 3-5 year horizon to drive growth by 20% over the next 12 months .
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.
These KPIs provide insights into the effectiveness of strategic initiatives, highlighting areas for improvement and ensuring alignment with organizational goals.
For more KPIs, you can explore the KPI Depot, 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.
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Success of the strategic initiatives hinges on the involvement and support of both internal and external stakeholders, including frontline staff, technology partners, and marketing teams.
Stakeholder Groups | R | A | C | I |
---|---|---|---|---|
Healthcare Providers | ⬤ | |||
IT Department | ⬤ | |||
Marketing Team | ⬤ | ⬤ | ||
Patients | ⬤ | |||
Investors | ⬤ | |||
Regulatory Bodies | ⬤ | |||
Operational Consultants | ⬤ | |||
Financial Advisors | ⬤ |
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
Explore more Valuation deliverables
To improve the effectiveness of implementation, we can leverage best practice documents in Valuation. These resources below were developed by management consulting firms and Valuation subject matter experts.
The implementation team leveraged several established business frameworks to help with the analysis and implementation of this initiative, including the Resource-Based View (RBV) and the McKinsey 7S Framework. RBV is a strategic management tool that focuses on the internal resources of an organization to gain a competitive advantage. It was particularly useful in this context because it helped identify the key technological assets and capabilities that could be leveraged for operational efficiency. The team followed this process:
The McKinsey 7S Framework was deployed to ensure alignment between the technological upgrades and the organization's overall strategy and structure. This framework examines 7 internal elements: Strategy, Structure, Systems, Shared Values, Style, Staff, and Skills. It was useful for identifying misalignments and ensuring that the technological upgrades supported the broader organizational objectives. The team followed this process:
The implementation of these frameworks resulted in a comprehensive understanding of the organization's technological capabilities and the alignment of these capabilities with its strategic objectives. This led to improved operational efficiency, reduced costs, and enhanced patient care quality.
The implementation team utilized the Diffusion of Innovations (DOI) Theory and the Lean Startup Methodology to guide the deployment of telehealth services. DOI Theory explains how, why, and at what rate new ideas and technology spread through cultures. It was particularly useful in this context to understand how telehealth services could be adopted by both patients and healthcare providers. The team followed this process:
The Lean Startup Methodology was employed to ensure a rapid and iterative approach to developing and deploying telehealth services. This methodology focuses on creating a minimum viable product (MVP) and using validated learning to improve it. It was useful for quickly bringing telehealth services to market while minimizing risks. The team followed this process:
The implementation of these frameworks facilitated the successful launch of telehealth services, resulting in increased patient engagement, higher retention rates, and expanded market reach.
The implementation team leveraged the Six Sigma methodology and the Theory of Constraints (TOC) to drive the Operational Excellence Program. Six Sigma is a data-driven approach to improving quality by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. It was particularly useful for enhancing operational efficiency and reducing costs. The team followed this process:
The Theory of Constraints (TOC) was used to identify and address the most significant limiting factor (constraint) that hindered the organization from achieving its goals. It was useful for focusing efforts on the most impactful areas. The team followed this process:
The implementation of these frameworks led to significant improvements in operational efficiency, reduced costs, and enhanced overall process performance.
The implementation team employed the Customer Journey Mapping and the SERVQUAL Model to develop the Patient-Centric Care Model. Customer Journey Mapping is a visual representation of the customer’s experience with a service or product. It was particularly useful for understanding the patient's experience and identifying pain points. The team followed this process:
The SERVQUAL Model was used to measure service quality across 5 dimensions: tangibles, reliability, responsiveness, assurance, and empathy. It was useful for assessing the quality of patient care and identifying gaps. The team followed this process:
The implementation of these frameworks resulted in a more patient-centric care model, leading to higher patient satisfaction, improved retention rates, and increased referrals.
The implementation team utilized the Economic Value Added (EVA) and the McKinsey Value Framework to enhance the overall valuation of the organization. EVA is a measure of a company's financial performance based on the residual wealth calculated by deducting the cost of capital from its operating profit. It was particularly useful for understanding the true economic profit generated by the organization. The team followed this process:
The McKinsey Value Framework was used to identify and prioritize value drivers that impact the organization's valuation. It was useful for developing strategies to enhance these value drivers. The team followed this process:
The implementation of these frameworks led to a comprehensive understanding of the factors impacting the organization's valuation, resulting in improved financial performance and a higher market valuation.
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Here is a summary of the key results of this case study:
The overall results of the initiative indicate a significant positive impact on patient retention, operational efficiency, and market valuation. The 15% increase in patient retention and 12% reduction in operational costs are particularly noteworthy, as they directly address the organization's primary challenges. The successful adoption of new healthcare technologies and the expansion of telehealth services have not only improved patient care but also broadened the organization's market reach. However, the 20% technology adoption rate, while positive, suggests room for further improvement. Additionally, while the operational cost reduction is commendable, the initial investment in technology and training was higher than anticipated, impacting short-term financial performance. Alternative strategies, such as phased technology implementation or additional staff training, could have potentially mitigated these initial financial strains and accelerated technology adoption.
Recommended next steps include continuing to monitor and optimize the newly implemented technologies and processes to ensure sustained improvements in patient care and operational efficiency. Further investment in staff training and development is essential to maximize the benefits of the new technologies. Additionally, exploring partnerships with technology providers could enhance the organization's capabilities and reduce costs. Expanding telehealth services and home-based care options should remain a priority to further increase patient retention and market reach. Lastly, conducting regular evaluations of the operational excellence program and patient-centric care model will help identify areas for continuous improvement and ensure alignment with the organization's strategic objectives.
The development of this case study was overseen by David Tang. David is the CEO and Founder of Flevy. Prior to Flevy, David worked as a management consultant for 8 years, where he served clients in North America, EMEA, and APAC. He graduated from Cornell with a BS in Electrical Engineering and MEng in Management.
This case study is licensed under CC BY 4.0. You're free to share and adapt with attribution. To cite this article, please use:
Source: Telecom Industry Valuation Enhancement for European Market Leader, Flevy Management Insights, David Tang, 2025
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