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Published on: February 16, 2011
Strategic planning processes and hospital financial performance
1Department of Health Care Administration, Trinity University, San Antonio, Texas, USA. amer.kaissi@trinity.edu
Summary
Hospital strategic planning is common, with 87% of Texas hospitals having a plan. Key planning elements like CEO responsibility and board involvement are linked to better financial performance.
Area of Science:
- Healthcare Management
- Health Services Research
- Organizational Behavior
Background:
- Empirical research on common healthcare management practices, such as strategic planning, is limited.
- Evidence-based management requires rigorous evaluation of prevalent organizational strategies.
- Strategic planning is a widespread practice in healthcare organizations.
Purpose of the Study:
- To assess the prevalence of strategic planning practices in Texas hospitals.
- To examine the association between hospital strategic planning processes and financial performance.
- To provide empirical evidence on the effectiveness of strategic planning in healthcare settings.
Main Methods:
- Survey of 138 hospital chief executive officers (CEOs) in Texas regarding strategic planning practices in 2006.
- Collection of financial performance data for the sampled hospitals from 2003.
- Statistical analysis to test the association between strategic planning characteristics and financial performance.
Main Results:
- 87% of surveyed hospitals reported having a strategic plan.
- Common practices like comprehensive planning, physician and board involvement, and plan implementation were widely reported.
- Having a strategic plan, CEO responsibility for the plan, and board involvement were positively associated with earlier financial performance.
Conclusions:
- Strategic planning is prevalent among Texas hospitals, with many adopting recommended practices.
- Specific strategic planning dimensions, including CEO and board involvement, show a positive association with financial performance.
- Further longitudinal research is necessary to establish causality between strategic planning and financial outcomes in healthcare organizations.
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