The Strategic Management In The Healthcare Industry

The short essay aims to address the impact of various payment methods on strategic management in the healthcare industry. The report tries to provide insights into some of the actions healthcare organizations have taken in response to these twenty-first century threats. Strategic management in the current healthcare climate entails an aging population, high levels of uninsured citizens, high operational costs and shortages in key areas.

“Studies have tried to elicit and predict reasons for high staff turnover in order to limit cost and adverse effects on morale, enthusiasm and organizational reputation. ” (Joshua-Amadi) The last thing healthcare administrators’ need is more associated headaches and concerns in the payment processes or systems. Federal and State Health Plans as well as private insurers and HMO’s pay physicians, hospitals and healthcare facilities on discounted fees for service.

Enrollees who hold these plans have no problems getting necessary tests or procedures done but the healthcare providers may not get fully paid for those services. Hospitals and individual healthcare providers therefore have been put in a position where it may make sense to cut back on certain things whether patients require them or not. These cut backs are not the same as a physicians having to manage a budget – this is more in line with literally neglecting certain services in the interest of breaking even as per payment.

The concepts of capitation, withholds, bonuses and utilization targets are all methods used by payment sources to dictate if and when hospitals or individual providers such as health clinics or doctor’s offices skimp to save a buck. Consider for example the referral or gatekeeper process. When a gatekeeper decides to pass on certain tests or decides that a patient may not need to see specialists or need inpatient hospital services, he may or may not be motivated by the actual scenario because other incentives drive those referrals.

In conclusion, this report aimed to point out that existing payment processes or systems encourage hospitals, doctors and other health facilities to systematically cut back whenever possible. The administrative arms therefore must be constantly vigilant and prepared to alter the overall strategic management approach for a facility. New payment process models have had to be created and put in place. “Models have been used since the beginning of mankind to represent complex structures, systems and procedures.

Models allow alternative scenarios to be tested through simulation, emulation or inspection before large sums of money and large amounts of time are expended. A model-based approach to change management avoids experimentation that can hurt people and waste resources. ” (Wizdom Systems, Inc. Announces available Healthcare Industry Process Models) Process models provide the healthcare industry and individual doctors, facilities and hospitals a way to review each function of the payment process and then fix only those areas considered to be broken or completely in need of overhaul.

Bibliography : Joshua-Amadi, Mabel. “Recommendations: A Study In Motivation: Recruitment And Retention In The NHS; In The December Issue Of Nursing Management, Mabel Joshua-Amadi Examined What Is Sometimes Needed To Keep Staff In The NHS” Nursing Management (Harrow). February (2003). Wizdom Systems, Inc. Announces available Healthcare Industry Process Models. Ed. Jeannine Stehlin. Wizdom Systems. Retrieved on 18 May 2005 from http://www. wizdom. com/hcmodelspr. htm.