Chapter 14: Planning and Consulting

Transcription

1 Chapter 14: Planning and Consulting Teaching Goals The ability to forecast, analyze, and, even to a limited extent, control the environment is a major asset of larger organizations. The last two chapters of WMHO address these capabilities. Students should come away from Chapter 14 understanding the following: 1. Long-term success in a dynamic environment requires a sophisticated surveillance and forecasting activity. Surveillance drives the governing board s annual assessment, collecting reports from the various units and supplementing them with information from external sources. Forecasting quantifies the need for future change in time to make an orderly response. 2. Most planning is managed through performance improvement teams or ad hoc project teams. These teams are deliberately managed, with a carefully designed charge, membership, resource support, and timetable, and on large projects can get quite elaborate. The teams recommend the decisions involved. The planning and internal consulting unit (P&C) should not make the decisions or exert undue influence on the teams. 3. Technical support for these teams comes from P&C. P&C also supports strategic initiatives at the senior management and governance levels. External consultants are often cost effective supplements to the P&C. 4. P&C support is evidence-based, analytic, and advisory. It contributes statistical analysis, research design, and operations analysis capability that improves the teams chances of success, and that otherwise would have to come from outside consultants. The P&C also manages various regulatory requirements. 5. P&C professional skills are varied and are taught in a variety of settings. The P&C is an excellent learning opportunity for early careerists, because it combines analytic rigor with a broad range of applications and frequently includes contact with the highest levels of the organization. 6. P&C performance should be measured, benchmarked, and subjected to goalsetting. It is difficult to identify the optimal investment, but some guidelines include a. The organization is rarely surprised by external events. b. Important projects proceed to conclusion in a timely manner. c. P&C users are satisfied with service. d. Cost does not exceed services of similar effectiveness or alternative sources. 7. Management s role is to ensure that the organization uses appropriate analysis in identifying and pursuing its opportunities for improvement John R. Griffith and Kenneth R. White

2 In a Few Words To minimize risk and uncertainty, a mission-driven, evidence-based, continuously improving organization must constantly analyze and forecast its environment. Planning and internal consulting conducts these analyses. It also assists internal teams to maintain a timely, responsive, and consistent process for continuous improvement and replacement capital allocations. The service helps all in the organization understand and respond to environmental trends and opportunities for improvement. It also provides a fact base for evaluating exchanges between the organization and other community agencies. Planning and investment decisions are contentious. Management must be prepared to resolve debates in ways that are perceived as fair by the participants. Chapter Outline Analyzing and forecasting statistical data Translating data from the source of truth to insight and recommendations for improvements Specification and adjustment of statistics, statistical quality control, and trend and relational analysis Preparing a quantitative review and forecast of the environment as part of the annual assessment Providing expertise on complex technical problems External consultants bring specific expertise, provide objective views, and temporarily expand the organizational capabilities Internal consultants provide local knowledge and continuity and are familiar with the mission, vision, and values of the organization Most organizations use both, providing a convenient, knowledgeable resource to operating teams and performance improvement teams Maintaining community values in planning decisions and capital investments Decisions test an organization s commitment to its mission, vision, and values They are unique, irreversible, expensive, and involve immeasurable risks about the future The best HCOs have a broad view of community mission, a long horizon, and a prudent approach to risk and debt; they deliberately encourage broad participation in decisions Powerpoint Slides See Learning Tools John R. Griffith and Kenneth R. White 2

3 Questions to Debate Slides of the individual questions are downloadable. We have prepared some summary thoughts on the content of class discussion. Obtain this information by writing (conventional mail) on academic letterhead to: John R. Griffith School of Public Health The University of Michigan 109 Observatory St. Ann Arbor, MI (Please include an academic (dot edu) address.) 1. A hospital is considering expanding its current obstetrics program. What type of measurements will be important in the decision? Who should be involved in discussing proposals? What kinds of information would be in the final recommendation to the governing board? 2. If you were planning a two-hour initial discussion about budgeting and capital budgeting for newly appointed first-line supervisors, what topics would you include? 3. The operating rooms supervisor asks planning and consulting what to do about demand he is not able to meet. What should planning and consulting offer as a plan for developing a solution? 4. Should an HCO ever have to downsize? How could downsizing be a part of continuous improvement? What should planning and consulting do to minimize the need for radical downsizing? 5. A competing hospital applies to the local zoning board to open a new hospital in a rapidly growing affluent part of town. What information will senior management want from planning and consulting? How could this action be the result of a planning and consulting failure? Additional Discussion Questions 1. Programmatic proposals 1.1. Figure 14.8 (p. 565 in the book) lists seven broad topics or issues that should be considered for each programmatic proposal. Considering each in turn, why is each topic important? Which one(s) would you leave out? Would you add anything? If you can t leave any out, how do you keep the evaluation process simple enough to be practical? (Hint: use a typical proposal as a test. Replacing, expanding or upgrading equipment, renovating or redesigning space, and making instead of buying a specific 2006 John R. Griffith and Kenneth R. White 3

4 product or service cover about 90 percent of programmatic proposals.) (This question can be used as a gradable exercise.) 1.2. What other methods could be used to evaluate programmatic proposals, other than the one described in the text (pp. 312 ff and 593 ff)? What are the advantages and disadvantages of the text method? (Hint: Realism and conviction and empowerment can be criteria for identifying advantages and disadvantages.) 1.3. Henry Ford Health System (HFHS) executives estimated that only 25 percent of the proposals that were formally prepared (Step 4 of Figure 8.8, p. 314) were implemented in the first year after they installed the system. Obviously, the number of ideas (Step 1) is much larger, and the percent funded even smaller. What are the advantages and disadvantages of having such low percentages? If you were the HFHS planning director, how would you minimize the disadvantages? In fact, several years later, HFHS funded over half the formally prepared projects. The total dollar volume of funded projects remained essentially constant. What happened? 1.4. The costs of specific programmatic proposals often depend heavily on the demand, and in turn on the market share. Here is a hypothetical case: Advocates think they will achieve 50 percent market share, but opponents say 25 percent is the highest likely. An unbiased consultant who has reviewed similar projects in other communities says 33 percent is realistic. How would you present the data to review committees and the board? 2. Planning unit evaluation. The measures given in Figure 14.9 (p. 572) are difficult to implement. Some like the accuracy of forecasts of demand, cost, and profit take a long time to assess and are subject to unforeseeable changes in the environment. Others like the evaluation of the strategic plan by the governing board are highly biased, because the board must approve the plan. From the perspective of the planning unit director, you could omit some measures, or devise ways to implement them that were reliable at reasonable cost, or use less reliable measures and allow for their unreliability in application. Make a specific recommendation for each dimension. 3. Decision premises. A group of stakeholders in your health system wants to acquire a hospice The hospice has a solid market base, a capable staff, and a growth opportunity as the local community ages and attitudes toward death change. It will need capital to exploit the growth, but it has no capital-raising capability on its own. Your organization could supply capital for that expansion. Review the proposal in light of the Profile of Not-for-Profit Values (Figure 14.10, p. 581). What arguments would you foresee from proponents and opponents of the proposal? Is there any way to resolve these arguments so that the board reaches consensus? (This question can be used as a gradable exercise.) 2006 John R. Griffith and Kenneth R. White 4

5 4. Forecasting space requirements. Facilities for an emergency service that sees 70,000 visits per year (about 200 per day, or an average of eight per hour) must be renovated. The initial proposal states: Peak loads occur on weekend evenings, when an average of 70 people, and sometimes as many as 100 people, arrive between 2000 and 2400 hours. Because it takes two hours to serve the average patient, we will require 70 treatment sites. The chief operating officer says, I know that s what they want, but it would cost over $10,000,000. We have to take every step we can to reduce that number. The finance committee won t accept the project until they are totally convinced we ve done all we should to get it down. What should planning and internal consulting do to either reduce or validate the number of rooms and the cost per room? (This can be used as a gradable exercise.) Questions for Examination These questions are less ambiguous than the discussion questions. Obtain these questions and the authors answers by writing (conventional mail) on academic letterhead to: John R. Griffith School of Public Health The University of Michigan 109 Observatory St. Ann Arbor, MI (Please include an academic (dot edu) address.) 2006 John R. Griffith and Kenneth R. White 5