March 2000

Strategic Plan Lays Groundwork for Catholic Health Initiatives’ Future

Catholic Health Initiatives’ strategic plan for 2000 through 2002 constructs a framework for the organization’s future while remaining firmly anchored to its mission and vision. "The mission and vision of Catholic Health Initiatives articulate our role in improving the health of communities," said John DiCola, senior vice president of strategy and business development. "The strategic plan outlines how we can accomplish that with objectives such as building leadership for the future and becoming better at meeting the needs of customers and those with whom we partner. The plan calls us to achieve a level of performance that will allow Catholic Health Initiatives to not just survive, but to thrive in a very challenging health care environment." The strategic plan, which was approved by the Board of Stewardship Trustees in September 1999, includes specific objectives for each of Catholic Health Initiatives’ four core strategies. The plan evolved from the health care environmental assessment Catholic Health Initiatives created last year. The environmental assessment synthesized research findings, supporting data and opinions from a wide variety of health care resources to help leaders throughout the organization understand and cope with changes in the industry. "The conclusions and implications drawn from the environmental assessment helped to frame Catholic Health Initiatives’ four core strategies, and the objectives for each strategy form the strategic plan," said DiCola. Since the strategic plan was disseminated last fall, significant progress has been made toward several key objectives. "For example, the leadership development program has been initiated, the organization is formulating an advocacy agenda and we’ve taken a large step in performance improvement with the implementation of an integrated strategic financial planning process," said DiCola. "We also have a service excellence model that is being piloted in several market-based organizations, designed to create work environments that build employee loyalty and, in turn, strengthen our commitment to customer service." DiCola emphasizes that Catholic Health Initiatives’ strategic plan is intended to articulate national priorities and, at the same time, provide support and direction for market-based organizations’ own strategic plans. "It is not intended to be a cookbook or to give market-based organizations all the answers for issues they have to address in their local markets," he said. "The broad themes of the strategic plan certainly resonate in our market-based organizations, but their own strategic plans need to focus on local market realities and priorities. Right now, for example, certain market-based organizations are focusing on operational improvement issues, some on ambulatory strategies and some on service excellence. They are addressing the unique circumstances of their markets and using the Catholic Health Initiatives plan as a framework for their own focused strategies." Although the strategic plan has a three-year horizon, DiCola said it will be reviewed each year along with the environmental assessment. "We’ll revisit the environmental assessment, especially its conclusions and implications, to see if any element requires greater emphasis or if there are new issues that were not even on the radar screen a few months earlier," he said. "Then, just as we ask our market-based organizations to review their strategic plans, we’ll look at the Catholic Health Initiatives plan to see if it needs fine-tuning." DiCola also noted that the current strategic plan reflects Catholic Health Initiatives’ need to complete the process of building its infrastructure. "I’m not referring to bricks and mortar, but to the basic processes we use to work together as an organization," he said. "We have made great progress, but need more time to get some key operational issues under control. Once we do that, we will generate the kind of financial performance that will allow us to go after more of the strategic opportunities before us. In the long term, I think Catholic Health Initiatives and our market-based organizations will be operating in an increasingly competitive and consumer-driven environment. Our strategic plan is calling us to lay the groundwork that will enable us to thrive in that environment by connecting with those we serve and with our partners in new, different and more effective ways." Environmental Assessment Driving Forces #1 Economic Pressures Key Point: Purchasers of health care will increase efforts to control rising health care costs (again). #2 Consolidation Key Point: Increased competition for market share and new business is likely to further drive consolidation in health care. #3 Consumers Key Point: Consumers will be even more demanding regarding quality, service and choice. #4 Technology Key Point: Medical and information technology are enabling providers to adapt to changing market conditions.. #5 Public Policy Key Point: Public policy will affect the financing, delivery and quality of health care. #6 Health Management Key Point: Health management promises cost savings and improvement in the quality of patient care. Conclusions The following summarizes the key conclusions drawn from the Catholic Health Initiatives Environmental Assessment:
  • Advancing the Ministry The Catholic health care ministry faces significant challenges to its mission and values as the environmental forces reshaping health care converge. Economic pressures, advances in both information and medical technologies, new business partnerships – let alone the growing numbers of vulnerable and underserved – are converging forces that will seriously test the Catholic health care ministry and the resolve of its leaders.
  • Increasing Margin Pressure Pressures on providers to contain costs will intensify as margins continue to erode. A new round of health inflation is now underway, driven by rising medical and pharmacy costs. Increasing constraints on payments by managed care organizations and governmental payers will result in decreasing margins for providers – certainly over the short term.
  • Strategic Growth The search for new business models and strategic partnerships that produce better market value and more profitable revenue streams will accelerate. Although business models (i.e. integrated networks) that developed throughout the 1990s have not lived up to expectations, a period of unprecedented business opportunity and complexity is unfolding as dramatic changes in technology, financing and consumer power begin to converge.
  • Service Excellence Rising consumer and employee expectations will challenge our performance standards, as well as our ability to create an attractive work environment, while managing an increasingly complex set of relationships across the delivery system. Satisfying consumers will require a pervasive, highly developed culture of service excellence. Service excellence will have to extend beyond our own employees into our complex network of relationships: physicians and other practitioners, business partners, advocates and community stakeholders.
  • Harnessing New Technology Satisfying consumers, assuring quality, and producing market value will become more dependent upon effective, efficient use of new medical and information technologies. Accelerating changes in medical and information technologies is reshaping both the balance of (information) power and the exchange of goods and services across the continuum. Effective adoption of these technologies – based always on the consumer’s fundamental desires for "better, faster, less expensive" – will be the key to health care providers’ future success.
  • Transforming Health Care Delivery The health care delivery system will continue to evolve as it responds to meet the demands of consumers and purchasers. As economic rewards of the 1990s model of "managed care" become more and more elusive, new business models will seek competitive advantages and economic opportunity across the complete continuum of care.
Strategic Plan 2000 Core Strategy #1 Extend the creative expression of Catholic Health Initiatives’ ministry.
  • Integrate Catholic Health Initiatives’ mission and values to create and sustain a distinctive culture of service excellence, spirituality and relationship.
  • Implement an organization-wide leadership development program for Catholic Health Initiatives’ governance and management designed to advance Catholic Health Initiatives’ mission and vision.
  • Implement a national advocacy agenda that promotes social justice, health care reform and systemic change in building healthier communities.
  • Collaborate with other Church ministries and values-based organizations to enhance Catholic Health Initiatives’ efforts to create new ministries and improve the health of the communities we serve.
  • Engage Church leaders in addressing the challenges facing Catholic health care to reach a broader understanding of the health ministry.
Core Strategy #2 Improve clinical, operational and financial performance.
  • Develop a comprehensive plan for required infrastructure to improve Catholic Health Initiatives-wide decision support and performance management capabilities.
  • Improve clinical quality/outcomes and cost performance across the organization by establishing clinical quality and resource utilization benchmarks and sharing knowledge/best practices.
  • Strengthen Catholic Health Initiatives’ current operating performance and long-term financial position:
    • Improve balance sheet strength sufficient to assure continued access to capital.
    • Improve operating margins sufficient to assure ongoing reinvestment and growth.
  • Implement a Catholic Health Initiatives-wide strategic/financial planning process to assure appropriate investment in future business growth, improve investment performance and align Catholic Health Initiatives’ strategic/financial goals.
  • Evaluate current and potential service/support integration and consolidation strategies to maximize value to market-based organizations.
  • Strengthen market-based organization/physician partnerships and relationships through:
    • Physician leadership development.
    • Improved clinical operations, service and quality.
    • Delivery system re-configuration.
    • New models/structures for service delivery.
Core Strategy #3 Build a commitment to service excellence.
  • Create work environments that value, support, develop and reward employees in the achievement of Catholic Health Initiatives’ service and performance goals.
  • Improve understanding of customer needs and increase customer loyalty by meeting or exceeding quality and service expectations for patients, families, physicians, payers and purchasers.
  • Carefully assess and appropriately apply medical and information technology and other resources to strengthen existing/build new relationships with all customers, and improve service to communities.
  • Strengthen physician commitment to Catholic Health Initiatives by communicating our values and providing high quality clinical resources, increased patient care efficiency and outstanding service excellence.
Core Strategy #4 Promote development/growth in areas of highest strategic opportunity.
  • Develop appropriate criteria and conduct an ongoing assessment to ensure continued mission appropriateness, value and/or financial viability of market-based organizations, business models, key service lines and Catholic Health Initiatives’ support services.
  • Develop national and market-based organization strategic partnerships to pursue business growth and operational improvement opportunities.
  • Selectively pursue expansion of Catholic Health Initiatives’ health ministry through development of new markets and service opportunities.