Managing Survival Strategies in Healthcare

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Managing Survival Strategies in Healthcare
Lawrence J. Hasenour
Senior Project: HSA 459
Instructor: Timothy Pinkerton MBA/MHA
March 19, 2011

Managing Survival Strategies in Healthcare

It is survival of the organization that is the most fundamental of all organizational goals which Bertram Gross, renowned social scientist, described as “the iron law” and “the unwritten law of every organization.” (Liebler & McConnell, 2008, p.12).

Survival demands vigilant and perceptive managers that will diligently stay abreast of sociocultural, technologic, economic and the demographic trends that develop throughout the expansive and far-reaching organizational community. It will demand discriminating managers who can successfully analyze and apply the myriads of incoming data to continue the organization’s competitive edge. He or she must also possess an accurate foreknowledge of trends, always discerning and staying abreast of the environmental forces that come to bear on the organization. The manager must recognize new opportunities when they present themselves while accepting calculated risks and boldly apply new approaches and courses of action to maintain their “sustainable competitive advantage” (Moseley, 2009).

In the ever more competitive and challenging world of medicine the art of survival will entail extremely savvy and strategically minded managers who must give even greater attention to trends, regulations, rulings and revisions in a fierce and constantly changing environment of extreme turbulence with looming economic repercussions within the private sector and on both the state and federal levels.

Constraints and restrictions to CMS reimbursements, decreased third-party payer reimbursements, Joint Commission rulings, required new technologies accompanied by increased operating costs and higher unemployment, are all factors leading managers in supporting aggressive cut-back strategies. Who have seen their revenue potential diminish at an unprecedented rate, and have begun a consolidation trend of mergers and acquisitions leading to the total restructuring of healthcare in the fight to stay alive (Zuckerman, 2009).

This paper is an attempt to address key challenges concerning the trends currently affecting healthcare, especially those which have far-reaching implications on healthcare’s future and overall survival. It will present an analysis of the impact that healthcare regulations have on exacerbating these challenges, it will also explore and analyze key organizational survival strategies for maintaining continued competitiveness and securing future survival.

The Affordable Care Act which was signed by President Barack Obama on March 23, 2010 is another powerful force bringing sweeping changes to the face of America’s Healthcare system, it will forever change how the medical community will view and dispense healthcare. In its effort to ensure more quality care it will replace most fee-for-service reimbursements by a system that instead rewards value; a more accountable pay-by- performance system, or value-based reimbursement (Kocher, Emanuel and Deparle, 2010). Healthcare organizations will also see dramatic decreases in reimbursement by private third party payers faced with new restrictions for raising rates and rescinding coverage will find new ways of cutting costs. Facilities will have to incorporate new innovations for increasing bottom lines without relying on third party reimbursements as their first line of income, no longer the greater percentage of their revenues.

An even greater challenge facing the United States Healthcare system today is the implementation of the newly required CMS compliant Electronic Medical Record (EMR) system. A recent study has shown that the first-year average cost of...
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