Literature Week 5 – Governance and Strategy
Korne et al. (2012) Hospital benchmarking: are U.S. eye hospitals ready?
Focus on transparency and reducing costs. Competition should focus on value based on
data. This data can be obtained through tools such as benchmarking: process of continuous
measuring and comparing an org’s business against others. Usually through performance
indicators (which give an indication of quality, safety, accessibility and efficiency).
Reporting performance can lead to performance improvement. Regulation, professionalism
and market forces also drive improvement.
Though these indicators have proven to be inaccurate. Still they sparked discussion and
exchange of knowledge/best practice. Developing these indicators is already an important
part of benchmarking. To check if the benchmark was successful, 3 questions:
- Are the hospitals learning from each other?
- Does the benchmarking identify performance gaps?
- Do the hospitals implement best practice?
Examples of benchmark indicators: labor costs per surgical case, payer mix, personnel costs,
number of cases per OR. Porter: focusing on cost reductions without regard to quality limits
improvement efforts and is self-defeating. Weiner et al: Leadership from the top promotes
clinical involvement in total quality management. US eye hospitals are ready, from the
purposes perspective. Having a number of institutes providing similar services without
competition lays fertile grounds for benchmarking. What is most lacking however is feasible
methods of obtaining reliable and credible clinical outcomes data for benchmarking. Maybe
the adoption of EMD’s will help this.
Quality tools for measuring need to be the same/similar (surveys etc.) in order to
benchmark/compare results. To realize long-term efforts, broader cooperation is necessary.
Benchmarking resulted in a visualization of performance gaps and increasing utilization of
beds and production. Can support perf management if number of institutes provide similar
services w/o competition. Conditions are useful, but shouldn’t be strictly used as
preconditions. There will always be differences between compared hospitals. Even if its not
completely accurate/complete, much can be learned if representatives of diff levels of the
org’s participate and willing to discuss openly about the processes behind the data.
1
, Wijngaarden et al. (2012) Strategic analysis for health care organizations:
the suitability of the SWOT-analysis.
Strategy is becoming important in hc because of the introduction of market competition and
self-regulation. Hospitals have to think about which services they will deliver, to which
clients, with what resources, and what stakeholders expect from them.
Due to the New Public Management movement, the principles and methods of the private
sector are being introduced in the public sector in order to boost performance. This is
supported by generic management approach which sees these principles as relevant for all
and who don’t see differences between public + private anymore.
SWOT-analysis tool for strategy analysis. Consists of (set of rules for the) confrontation
between external developments and internal capabilities. External developments:
opportunities or threats for the org. Internal capabilities: strong or weak points of the org.
Based on this a strategic option/course can be identified.
SWOT is a product of the design school of strategic management. Normative approach to
management; rational as possible. Four premises:
- Strategy is leading: Tactics and operations (structure) follow strategy. It’s at the top.
Long-term more important than short-term.
o Critique: strategy in reality has no superior influence on organizational
outcomes. Strategy is interdependent with other management areas. Also
not only at top but is common at all levels of org dec-making.
- Organizations are autonomous: org’s are supposed to do their own strategic
analyses, make a decision and implement it on their own.
o Critique: organizations are interdependent on each other, they often form a
network (either internally or externally). In addition, stakeholders influence
strategy and goals of the org as well.
- Organizations have clear demarcations: clear boundaries between internal and
external factors, which makes the central part (the confrontation) possible.
o Critique: because of the interdependence on other org’s or stakeholders,
organizations are open systems, and it is hard to make clear distinctions to
what which belongs.
- Organization is a rational hierarchy: managers/CEOs should control the strategy
process by using tools to ensure rationality. Thorough analysis of alternatives.
o Critique: big limitations such as not enough relevant info, too time-
consuming to be rational, not possible because too complex bc of many
variables, vision and intuition important, social process with stakeholders w/
own interests, strategy takes place in arena/garbage can, ongoing process,
bureaucratic use of instruments for strategy should be avoided.
Design school uses machine bureaucracy as archetype for organizations. They think strategic
tools from this school shouldn’t be used in hc, because hc orgs are professional
bureaucracies instead.
Steps for SWOT:
- Formulate external developments as opportunities or threats
- Formulate internal means and capabilities as strengths or weaknesses
- Confront strengths and weaknesses with opportunities and threats
- Use the result to formulate strategic options.
2
Korne et al. (2012) Hospital benchmarking: are U.S. eye hospitals ready?
Focus on transparency and reducing costs. Competition should focus on value based on
data. This data can be obtained through tools such as benchmarking: process of continuous
measuring and comparing an org’s business against others. Usually through performance
indicators (which give an indication of quality, safety, accessibility and efficiency).
Reporting performance can lead to performance improvement. Regulation, professionalism
and market forces also drive improvement.
Though these indicators have proven to be inaccurate. Still they sparked discussion and
exchange of knowledge/best practice. Developing these indicators is already an important
part of benchmarking. To check if the benchmark was successful, 3 questions:
- Are the hospitals learning from each other?
- Does the benchmarking identify performance gaps?
- Do the hospitals implement best practice?
Examples of benchmark indicators: labor costs per surgical case, payer mix, personnel costs,
number of cases per OR. Porter: focusing on cost reductions without regard to quality limits
improvement efforts and is self-defeating. Weiner et al: Leadership from the top promotes
clinical involvement in total quality management. US eye hospitals are ready, from the
purposes perspective. Having a number of institutes providing similar services without
competition lays fertile grounds for benchmarking. What is most lacking however is feasible
methods of obtaining reliable and credible clinical outcomes data for benchmarking. Maybe
the adoption of EMD’s will help this.
Quality tools for measuring need to be the same/similar (surveys etc.) in order to
benchmark/compare results. To realize long-term efforts, broader cooperation is necessary.
Benchmarking resulted in a visualization of performance gaps and increasing utilization of
beds and production. Can support perf management if number of institutes provide similar
services w/o competition. Conditions are useful, but shouldn’t be strictly used as
preconditions. There will always be differences between compared hospitals. Even if its not
completely accurate/complete, much can be learned if representatives of diff levels of the
org’s participate and willing to discuss openly about the processes behind the data.
1
, Wijngaarden et al. (2012) Strategic analysis for health care organizations:
the suitability of the SWOT-analysis.
Strategy is becoming important in hc because of the introduction of market competition and
self-regulation. Hospitals have to think about which services they will deliver, to which
clients, with what resources, and what stakeholders expect from them.
Due to the New Public Management movement, the principles and methods of the private
sector are being introduced in the public sector in order to boost performance. This is
supported by generic management approach which sees these principles as relevant for all
and who don’t see differences between public + private anymore.
SWOT-analysis tool for strategy analysis. Consists of (set of rules for the) confrontation
between external developments and internal capabilities. External developments:
opportunities or threats for the org. Internal capabilities: strong or weak points of the org.
Based on this a strategic option/course can be identified.
SWOT is a product of the design school of strategic management. Normative approach to
management; rational as possible. Four premises:
- Strategy is leading: Tactics and operations (structure) follow strategy. It’s at the top.
Long-term more important than short-term.
o Critique: strategy in reality has no superior influence on organizational
outcomes. Strategy is interdependent with other management areas. Also
not only at top but is common at all levels of org dec-making.
- Organizations are autonomous: org’s are supposed to do their own strategic
analyses, make a decision and implement it on their own.
o Critique: organizations are interdependent on each other, they often form a
network (either internally or externally). In addition, stakeholders influence
strategy and goals of the org as well.
- Organizations have clear demarcations: clear boundaries between internal and
external factors, which makes the central part (the confrontation) possible.
o Critique: because of the interdependence on other org’s or stakeholders,
organizations are open systems, and it is hard to make clear distinctions to
what which belongs.
- Organization is a rational hierarchy: managers/CEOs should control the strategy
process by using tools to ensure rationality. Thorough analysis of alternatives.
o Critique: big limitations such as not enough relevant info, too time-
consuming to be rational, not possible because too complex bc of many
variables, vision and intuition important, social process with stakeholders w/
own interests, strategy takes place in arena/garbage can, ongoing process,
bureaucratic use of instruments for strategy should be avoided.
Design school uses machine bureaucracy as archetype for organizations. They think strategic
tools from this school shouldn’t be used in hc, because hc orgs are professional
bureaucracies instead.
Steps for SWOT:
- Formulate external developments as opportunities or threats
- Formulate internal means and capabilities as strengths or weaknesses
- Confront strengths and weaknesses with opportunities and threats
- Use the result to formulate strategic options.
2
