How to define a growth strategy when all drivers are fixed ?

National healthcare is completely fixing the drivers, new industry challenges are are popping up, hospital networks have to be formed and at the same you need to develop sustainable growth… How to deal with this complex game setting ?

Our hospital group is a leading multilingual hospital system serving the Brussels region and its surrounding areas. We offer comprehensive care at our 3 main sites with 709 beds. Calling on the expertise of over 300 specialist physicians and 1,800 staff members, we pride ourselves on providing highly personalised care to 2,500 patients every day. From accurate diagnostic to the most advanced forms of treatment and recovery, we combine state-of-the-art medical technology with contemporary infrastructure to deliver high-quality dedicated care with highest safety and comfort standards, for each and every patient, every day.

I’m now in charge of Strategy, Innovation and Transformation for all sites. The Board asked me to develop our growth strategy for 5 coming years.

The Belgian healthcare sector is currently undergoing major changes and many parameters are fixed, limiting possible actions to develop and stimulate our hospital growth. Some elements of this particular context in which  I need to operate:

  • The law on hospitals forces us to remain in the non profit. It is out of the question to include shareholding in our Financial model;
  • The funds allocated to hospitals come mainly from a specific closed envelope for federal government health care, central collection of physician fees, and pharmacy;
  • We have no control over prices (prices are set) and we limit the suppléments on medical fees to maximum 200%;
  • Competition is fierce and it is therefore difficult to find doctors and staff (job shopping). Taking more for medical fees is not an option;
  • Impact on volume is limited to the national growth per pathology;
  • Our hospital is merging between its different sites and the doctors are now forming real associations by specialty forcing us to reorganize ourselves at the operational level (process flow, some pathologies will only be treated on one site only, we need to cluster activities, a lot of big change management to go through, …);
  • Implementation of fixed prices fees for some pathologies (childbirth, hip replacement, etc.) with high impact on medical fees;
  • We are experiencing a severe shortage of nurses directly impacting the quality of care ;
  • A new law has just been signed forcing Belgian hospitals to group themselves into hospital networks (a maximum of 3 networks in Brussels, and university hospitals must be part of a network). We are currently negotiating to define the pathology portfolio among the various hospitals in the network according to different networking scenarios;
  • All hospitals in Brussels are “general hospitals” and are treating same kind of pathologies (even the universitary hospitals in order to maintain Financial balance !)

During the last 3 years we have worked hard to define a new strategic plan four our group and to define annual action plans to reduce costs, to stimulate activity, to launch standardization projects, to launch quality improvement projects,… But we have to admit that we are still ending at the same level…. Our result has been balanced in recent years, but it is difficult to generate more margin and we cannot invest in new projects.

I really need an ‘out of the box’ strategic reflection to imagine new parameters or reinvent the classic hospital model in our country.

Any thoughts or ideas on how to develop a real growth strategy? Which kind of drivers would you act on?

Previous:

Is there an optimal structure for leadership of a large department to better manage the normal competition between the clinical and academic missions? How to Survive in a “Highly Matrixed” Organization ?

Next:

Culture eats strategy for breakfast

5 thoughts on “How to define a growth strategy when all drivers are fixed ?

  1. this is a tough one…. not being familiar with health care outside of the United States, so maybe this is a silly suggestion. But, when we’ve had strategic challenges and needed additional support, we’ve had great success leveraging philanthropy. Disney09

  2. Definitely a tough one – perhaps instead of looking inwards to start with, ask yourself WHY the government is implementing these changes…what is the outcome they are hoping for? In other words, look at your future from the eyes of your funder, then figure out some possible scenarios and identify how your strategy would play into each of these scenarios. That may lead you to identifying some projects that could differentiate your network from others.
    So my takeaway message is, think from the perspective of your funders (talk to them, read everything they write and post, try and get underneath their strategy and it may change the way you think about your own strategy

  3. This sounds familiar, restrictions on financial side.

    Inside the restrictions the only way forward is concentrating on internal issues.

    I would embrace new technology, especially mobile health. If you do not have Lean method, take it to you – it is cost-efficient. Choose 3-4 main areas of expertise in your hospital (make an internal competition) and give them some extra resources for these 5 years, with a promise of a second competion coming at the end of the 5 years.

  4. Working in Belgium too, I do agree with previous comments stating it is very tough to work in this environment.
    I think one of the causes of the problem is the fact that historically there are too many hospitals in Belgium, especially in Brussels. Besides that, as you state all hospitals are general hospitals; and the law requires them to be general and to treat all kinds of pathologies.
    We have a federal government and regional governments, with no clear distinction between the jurisdiction of these different governments. And we see a large difference between vision of politicians of the different regions of the country. There is also too much influence of interest groups on the government. For all these reasons political decisions are made too slowly. And none of the governments wants to share savings with providers.
    In this context, I think it is quite impossible to focus on growth in a seperate hospital. Since in this constrained situation, ethically acceptable growth can only come from taking patients and activities from other hospitals, I think it is better to focus on stronger and faster cooperation with the other hospitals in the region and to use upcoming legislation (following the network legislation), to reorganise the hospital landscape in Brussels (and Flanders) to create real economies of scale.

  5. Almost working in Belgium one of the fields where one might win is content. Why are people leaving (doctors) or is there a shortage (nurses) could be turned around in why are people staying. This might be on the content side rather than on the financials. One way to get out of the trap of doing everything and for a fixed price is to encourage people to increase the fun in their work. Give them opportunity to be the best in their trade within the network by specialization of the various hospitals with cool possibilities for the staff you want to work for you. This gives financial room as you do not need to cover all in every hospital. Remember doctors and hospital: they are all in the same trap.

Leave a comment