Environmental Analysis

External Environmental Analysis

HCA operates in a healthcare market that is undergoing major challenges and financial constraints. Plunkett (2002) noted that there are five major, interrelated external factors affecting HCA current operations. These factors are: increases in health care costs, an increase in the number of uninsured Americans, political and regulatory changes affecting health care reimbursement, the competitive environment of the healthcare industry, and changes in the America’s demographics manifested by an aging population whose longer life expectancies.

While the introduction of managed care helped to control health costs, these costs are on the rise again, and are significantly influencing health care premiums. From 1994 to 1997, health coverage premiums increased between 2% and 4% annually. In calendar year 2002, large firms found their health insurance premiums rise between 9% and 12%, while small firms had to bear increases between 15% and 20% (Plunkett 2002). As employers try to combat these increases, they find themselves in a precarious position. In order to bear the responsibility of providing health insurance, employers are attempting to trim health care expenditures by reducing the health care coverage offered to employees or by transferring some of these costs to employees. The outcry for change is evident across America. Employee unions have demanded that their members not be burdened with these increases. As reported in the Wall Street Journal (2003), Albertsons Inc., Kroger Co., and Safeway Inc. employees are currently involved in strikes over proposed cuts to employer health care coverage. Not only are health care costs increasing for employers, health care facilities must bear the costs associated with treating the growing uninsured population. In order to remain financially viable, health care organizations must shift these cost burdens to other insured or paying patients, thereby continuing the trend of raising health care costs. The recently approved Medicare Reform Act has positive financial consequence since it is the first time that Medicare payments will increase compared with previous years. Though HCA was a strong supporter of the act, like other healthcare organizations, it must still operationally manage changes in payer mix and growth in operating expenses.

In the past, health care organizations overlooked their competitors because through cost-plus Medicare and Medicaid reimbursement practices (Shi & Singh, 2001, p. 206), federal and state governments paid the majority of health care bills. Changes in Medicare and Medicaid reimbursement practices, and better audit control from the Center for Medicare and Medicaid Services (CMS) has changed the emphasis on competitor analysis. CMS now routinely audits the billing practices of health care organizations to identify potential fraud and abuse. Numerous facilities have had to reimburse and modify internal billing and accounting procedures to comply with federal and state requirements. CMS’ tighter control and monitoring of health care expenditures has encouraged health care organizations to operate in a more efficient manner. This new focus on efficiency is not only contributing to financial stewardship but also toward a more competitive environment. Though temporary, Congress’ approval of an 18-month moratorium on the opening of new physician-owned specialty hospitals helps to avoid pressure to the already existing health care organizations.

Changes in population demographics also contribute to the challenges faced by the health care industry. As reported by Plunkett, the aging baby boomer generation and the increase in life expectancy among Americans has caused an increase in the percentage of elderly Americans and therefore put a further strain on the healthcare delivery system.

Stakeholder Analysis

As the largest general hospital / clinic organization in the United States, HCA has numerous stakeholders who have varying levels of interest in the company’s success. The stakeholders of HCA are categorized into one of three groups: internal, interface, and external. (See Appendix A). HCA employees are the primary internal stakeholders. The company has reported improvements in employee satisfaction levels and a decline in employee turnover. These efforts can be attributed to leadership’s investment in their personnel through various educational and training programs, and through the acquisition of equipment and technology that improves its staff’s ability to deliver high quality care. Among the many noteworthy interface stakeholders, the United States Army and U.S. Department of Labor (DOL) partner nursing programs have a special interest in the success of HCA. HCA invests in the Army PaYS program and DOL scholarship programs in an effort to address the shortage of trained medical professionals within its organization. Other significant interface stakeholders include: MedCap, an organization that owns and leases medical office buildings to HCA, LifePoint and TRIAD Hospitals, both of which receive risk management and insurance services from HCA, Global Health Exchange which improves HCA’s supply chain processes, and finally, HealthStream, an internet-based education and training organization that provides training resources to HCA (HCA Annual Report, 2002). HCA’s external stakeholders include patients (Medicaid, Medicare and private), stockholders, governmental agencies, professional associations, third party payers, and the communities of 23 states and two foreign countries. Recent involvement with the Leapfrog Group and the National Quality Forum illustrate HCA’s efforts to support industry initiatives that are intended to improve health care satisfaction, quality, and accountability (HCA Annual Report, 2002).

Service Area Competitor Analysis

HCA’s service area competitor analysis was conducted using the strategic thinking map illustrated in Ginter, Swayne, and Duncan’s text (2002, p. 104). Use of this thinking map defines the service categories and service area, creates a service area profile, conducts service area structure analysis and competitor analysis, and culminates with a strategic grouping and a analysis of the information obtained. HCA’s service categories include 179 hospitals, 78 surgery centers, and various ancillary centers in 23 states in both western and eastern regions of the United States. In addition, HCA also operates eight consolidating hospitals in England and Switzerland. Facilities owned and operated by HCA include hospitals, outpatient centers, and rehabilitation centers. HCA has general, acute and psychiatric hospitals, which provide medical and surgical services, including diagnostic services, emergency services, inpatient care, intensive and cardiac care. HCA’s outpatient services are found in both hospital and outpatient settings. These services include; outpatient surgery, laboratory, radiology, respiratory therapy, cardiology, and physical therapy.

HCA’s primary service area encompasses the entire United States. A profile of this service area includes health status, demographic, and economic indicators. The CDC (2002) uses the top ten leading causes of death in the United States as indicators of the nation’s health status. Of those indicators, the three leading causes of death in 2002 were chronic diseases: heart disease, cancer, and cerebro-vascular disease. Additionally, with advancements in medical technology, the elderly population continues to increase in size as American’s life expectancies continue to grow. However, there are still many health care disparities among different segments of the population that require attention (Shi & Singh, 2001). Overall, the U. S. economy is showing signs of improvement after the recessionary period of the late 1990s to early 2000s. Health care spending is still around 14% of the Gross Domestic Product and does not show signs of decreasing (Shi & Singh, 2001).

A Porter’s Analysis (Appendix C) was used to assess the service area structural analysis. Overall, HCA competes on a national health care level, but must also monitor local competition in the markets it serves. New entrants into this market would be restricted based on their ability to quickly acquire capital assets, earn name recognition, and gain alliances with HMOs and healthcare suppliers. These would be significantly difficult feats to accomplish in a short time. National-level health care market entry threats are high for potential entrants, however, local level threat of market entry is moderate. A new competitor in a local market may be able to compete with one HCA’s facilities, but would have to contend with HCA’s supply and purchasing advantages with equipment suppliers, HMOS, and employers. The intensity of rivalry among existing organizations is high. The health care industry is comprised of many organizations that strive to improve their financial standing, service image, and service mix in an effort to dominate the market. This strategic maneuver has promoted rivalry in the industry.

Threat of substitute services is moderate. The health care industry is experiencing a growth in alternate health care venues, as demonstrated by patient’s preferences to home health care, and forms of alternative medicine. Patients are demonstrating a preference to home health care. While HCA should explore the growth of this segment, the threat to their main line of business is insignificant. In addition, the government’s decision to place a moratorium on the opening of new physician-owned specialty hospitals has further reduced the threat to HCA. The bargaining power of the customers, both patients and physicians, is moderate. Managed care standards inhibit the power of physicians due to utilization controls. Patients feel the same limitations due to a lack of control over their health care choices as a result of health management organizations.

HCA’s three primary competitors in the general hospital / clinic business line are Tenet Healthcare Corporation (Tenet), Universal Health Services (UHS), and Health Management Associates (HMA). These competitors were identified and ranked based upon annual sales and profits (Plunkett, 2002). Each of these competitors utilizes different organizational strategies. Tenet is the closest operation in size and financial composition. Tenet appears to have an expansion strategy. Tenet offers a wide variety of services and is currently shifting focus to the aging baby-boomer generation. This shift has resulted in Tenet’s focusing on cardiac, orthopedic, and neurological services. UHS is the second largest HCA rivalry, which operates 100 facilities in 22 states and one hospital company in France. UHS offers comparable services, garnered net income growth for nine consecutive years, and appears to have an expansion strategy as demonstrated by its acquisition record of 10 hospitals in 2001. HCA’s third largest competitor is HMA. HMA has enjoyed double-digit profit margins since 1997 but the organization meekly holds 38 healthcare facilities in its inventory (Plunkett, 2002). Each major competitor possesses significant attributes that, over time, could potentially pose a threat to HCA’s market standing. Therefore, HCA must continually monitor its competitors in order to maintain its dominance in the market.

Internal Environmental Analysis

The mission of HCA is “Above all else, we are committed to the care and improvement of human life. In recognition of this commitment, we will strive to deliver high quality, cost effective healthcare in the communities we serve. In pursuit of our mission, we believe the following value statements are essential and timeless:

· We recognize and affirm the unique and intrinsic worth of

each individual.

· We treat all those we serve with compassion and kindness.

· We act with absolute honesty, integrity, and fairness in the

way we conduct our business and they way we live our lives.

· We trust our colleagues as valuable members of our

healthcare team and pledge to treat one another with loyalty, respect, and dignity.”

A comparison of HCA’s mission statement to the components identified in Ginter, Swayne, and Duncan’s textbook reveals the following:

Target customers and markets – The mission statement identifies a commitment to improving human life in communities in which it serves. Neither “human life” nor “communities in which we serve” clearly articulates the target customer or the market.

Principle services delivered – HCA does not clearly articulate the services it offers to its communities. Being a national-level organization, however, this could be somewhat difficult.

Geographical area where the organization intends to concentrate – HCA is an international organization, but makes no reference to this in the mission statement.

Organizational philosophy – The mission statement makes reference to delivering high quality, cost effective healthcare, but does identify any unique beliefs, values, aspirations, or priorities. Similar language could easily be used by one of HCA‘s competitors.

Organization’s desired self-image – HCA does establish any particular self-image.

Organization’s desired public image – As with the self-image, HCA does not specify a particular public image.

HCA’s competitive advantage is that it is one of the largest health care providers with sales in 2001 of nearly $19 billion, and profits of nearly $886 million (Plunkett, 2002). A better mission statement might help HCA reinforce its uniqueness amongst competition and further legitimize its presence in the health care environment.

Revised Mission - A proposed revision to HCA’s mission statement is:

“Above all else, we are committed to the care and improvement of human life. In recognition of this commitment, we will deliver the highest quality, cost-effective health care across the entire continuum of care. As a global leader in health care, we are sensitive to the communities we serve. In pursuit of our mission, we believe the following value statements are essential and timeless...”

HCA does not have a vision statement to describe what the organization will be like or and look like when it is carrying out its mission. In lieu of a vision, HCA uses a set of strong values statements, which are integrated into the mission statement. As guides for ethical and responsible decision-making, organizational values represent the ideals that the organization and its employees stand for. They are the “guideposts” for the organization and provide a sense of meaning to establish and carry out the mission, vision, and goals of an organization. HCA’s value statements were listed previously.

Each of HCA’s values is well developed and clearly articulates a set of organizational beliefs that supports the current and revised mission statements. Key values that stand out are compassion, kindness, honesty, integrity, fairness, loyalty, respect, and dignity. These are noble and appropriate values for a health care organization. As long as HCA remains committed to and charges its employees with carrying out these values, it will continue to provide valuable, quality care for its patients. A proposed vision for HCA is: “HCA proudly carries on its international role of providing the highest quality health care to the communities we serve, and will become the first choice of care for the citizens in these communities. HCA will accomplish this by providing the best, most responsive, and compassionate care possible, and will empower its employees to ensure effective and equitable care for each and every patient we treat.”

Strengths, Weaknesses, Opportunities, and Threats

HCA has several key strengths, weaknesses, opportunities, and threats that provide a framework for evaluation (see Appendix D). HCA has long been an innovator and was one of the first national hospital chains. This organization is the current industry leader in the general hospital / clinic delivery of health care as seen by the number of facilities it operates and its widespread reach across America. As stated in its 2002 Annual Report, “...our goal [is] to serve as a leading provider in large urban and suburban communities throughout the United States” (2002, p. 5). According to Plunkett’s Health Care Industry almanac latest report, HCA ranked first in sales and profit in 2001. HCA has consistently reinvested heavily into itself as an organization. In 2001, the organization reinvested $1.7 billion into existing facilities, infrastructure, capital equipment, medical and information technology, and leadership and training programs (Plunkett, 2002). Additionally, HCA has holdings in several outside businesses, which aids in diversifying its financial base, and strengthens its financial position.

HCA certainly has solid infrastructure and financial strengths, yet the organization does have weaknesses. HCA recently announced a tentative agreement to settle several shareholder class action lawsuits for $49.5 million, and is still under scrutiny by the federal government for its business practices. Further tarnishing its image, HCA has been accused by advocacy groups of overcharging uninsured patients $2.1 billion last year, and an investigation is sure to result from these accusations (Srimedia, 2003). There are also several threats HCA must address. As the cost of health care increases and the nation tackles unemployment, the number of uninsured patients continues to increase. This increase in uninsured impacts HCA’s bottom line. HCA self-pay patient accounts have increased and in the last three years the organization’s bad debt expense has steadily increased (HCA Annual Report, 2002). Additional threats include the national nurse shortage, changing landscape of healthcare delivery, and continued increase in health care costs.

In light of these external threats, several opportunities promise HCA a strong future. Nationwide trends toward sub-acute facilities and home health care provide HCA substantial opportunities for future growth and expansion. The recently approved Medicare Reform Act also serves as an opportunity for HCA. The act increases governmental reimbursements to facilities and 49% of HCA’s revenue comes from Medicare patients. Finally, the 18-month federally mandated moratorium of new physician- owned hospitals gives HCA time to improve working relations with physicians serving within the geographical areas of their facilities.

Strategic Formation

Strategy formulation encompasses the development of strategic alternatives, evaluation of those alternatives, and strategic choice. A comprehensive situational analysis sets the stage for strategic formulation. Once an organization conducts its environmental analysis, it can establish its directional strategies. It is critical that an organization develops solid directional strategies, as these are the foundation for the other strategies: adaptive, market entry, competitive, and implementation strategies (Ginter, Swayne, and Duncan 2002).

As noted earlier, HCA possesses an adequate mission that is supported by its value statements. HCA’s current position in the health care industry indicates the directional strategies are adequate, for continued success. However, revising or adopting the proposed mission, vision, and values will strengthen its current directional strategy and enhance its future success. A review of HCA’s current operations indicates that it is executing adaptive strategies and moderately executing market entry and competitive strategies. Ginter, Swayne, and Duncan (2002), indicated the sequential nature of strategy formulation, and how the different strategies build upon each other (p. 215). HCA’s strategies appear to fall in accordance with this process.

Adaptive Strategies

Adaptive strategies suggest three course of action for an organization: expansion of scope, contraction of scope, or maintenance of scope (Ginter, Swayne, & Duncan, 2002, p. 217). HCA is primarily engaged in expansion and maintenance of scope strategies. Vertical integration and diversification strategies are being employed by HCA to build integrated health care networks, increase patient volume, and increase the number of services and capabilities available in highly concentrated communities. With the intent of guiding patients to its services, HCA is utilizing a backward vertical integration strategy by providing a broad range of services in order to establish a comprehensive local health care network. The acquisition of select new services and an expansion of current specialty and emergency room services facilitate the growth of the integrated health care network. An overall increase in patient demand or volume through vertical integration will enable to HCA realize its goal of growing as a health care provider. HCA employs a related diversification strategy because it is adding new, but similar products. One current example is HCA’s decision to support two disaster medical teams. Such support utilizes many of its existing resources and is not profitable, but helps strengthen HCA’s position in the local communities and legitimacy with the federal government (HCA Annual Report, 2002).

The maintenance of scope strategy, in particular the enhancement strategy, appears to be the focus of HCA’s efforts. HCA emphasizes a “patient first” strategy, and wishes to be recognized as the employer of choice by maintaining positive relationships with physicians and other medical providers. An enhancement strategy is the best way for HCA to realize these goals. Enhancement focuses on improving operational efficiency and reducing costs. HCA executes the following business strategies, which relate to enhancement (HCA Annual Report, 2002, p. 14).

· Improve operating efficiencies through enhanced cost

management, better resource utilization, and the implementation of shared services and other initiatives.

· Effectively allocate capital to maximize return on

investments.

· Streamline and decentralize management, consistent with

HCA’s local focus.

Using these strategies, HCA has implemented best practice initiatives, leadership development programs, and formed a group purchasing organization to control costs. HCA expects to experience economies of scale as it continues to expand and gain market share. A longer-term cost-reduction strategy involves increasing and improving working relationships with health maintenance organizations, preferred provider organizations, and employers. To improve employee relations and maintain a highly qualified and experienced staff, HCA establishes competitive compensation and benefits packages for its employees (HCA Annual Report, 2002).

HCA has also engaged in a number of external programs to improve internal operations. To address the shortage of qualified and trained medical personnel, especially nurses, HCA implements the Army PaYS program. This program targets and recruits military personnel who are leaving active duty and are seeking employment in the health care industry. HCA Cares is another program that offers national scholarships to lower-income individuals who desire a career in the health care field. The program is unique and provides a competitive advantage by providing support to the local communities, while allowing HCA to overcome its own staffing shortages. As HCA’s competitors struggle to fill nursing positions by typical recruitment methods, HCA has its own internal pool of trained nursing personnel, and can focus its efforts in other strategic areas. All of the programs that HCA participates in are excellent opportunities to control their work force supply pool, reduce medical professional shortages, and control health care costs (HCA Annual Report, 2002).

Market Entry Strategies

To execute its adaptive strategies, HCA engages in two main market entry strategies: acquisition and internal development. In 2002, HCA received an invitation to purchase a group of hospitals is Kansas City. This opportunity provides HCA the opportunity to expand, and meets its goal to be the top health care provider in both urban and suburban communities throughout the United States. The acquisition of other select health care services, such as its Shared Services initiative, will also support the vertical integration strategy. To support the internal development strategy, HCA has reinvested $1.7 billion on it existing facilities. Such a large reinvestment provides new patient care beds, emergency departments, and diagnostic and treatment technology to produce new services. HCA expects capital spending to grow to $2 billion. A continued application of these market entry strategies will accomplish HCA’s identified adaptive strategies (HCA Annual Report, 2002).

Competitive Strategies

Although HCA is recognized as a leader of health care services within the United States, its operations are primarily focused on three types of businesses: general hospitals, outpatient clinics, and sub-acute care facilities (Plunkett, 2002). Other nationally oriented competitors have taken measures to adjust their services in order to remain competitive. Comparing Tenet Healthcare and Universal Health Services to HCA, these other health care organizations have exchanged some of their national presence for a wider range of services (Plunkett, 2002). One possible reason HCA has not taken significant expansion of services is that it appears to be employing the analyzer competitive strategy. An analyzer competitive strategy balances market defense with innovation and growth. HCA’s past legal matters with the Center for Medicare and Medicaid Services and the presence of local community competition may be the reason this organization has not implemented a prospector strategy. Examples of HCA’s analyzer strategy include the introduction of the Electronic Medication Administration Record (EMAR) and the Electronic Physician Order Management (EPOM) system. Overall, these two systems are meant to streamline and improve HCA’s internal business processes. EMAR implements bar code technology to reduce medication errors and EPOM employs information management and technology systems to eliminate confusion and time lags in patient care. Once these systems are completely on line, they will improve patient care and help HCA maintain its competitive advantage (HCA Annual Report, 2002).

Evaluation of Strategic Alternatives

The TOWS matrix was used to evaluate HCA’s strategic alternatives (see Appendix E). HCA’s dominance in the general hospital / clinic business in terms of sales and profits and its other identified internal strengths clearly indicate that this organization should operate in the “future” quadrant. HCA’s largest competitor in this business is Tenet Healthcare Corporation. Fortunately for HCA, Tenet is undergoing leadership, legal, and regulatory woes that HCA weathered nearly six years ago. As a result, HCA is in a power position within the general hospital / clinic business.

Analyzing the “future” quadrant, HCA should employ expansion, vertical integration, related diversification, and penetration strategies. HCA should focus its efforts in this quadrant. As mentioned earlier, one of HCA’s goals is to be the leading provider in large urban and suburban areas. An analysis of the location of current HCA’s facilities (see Figure 1), indicates that HCA has not ventured into the urban population-dense states such as New York, the New England states, Pennsylvania, Ohio, Maryland, and New Jersey. HCA should seriously consider moving into these markets after a thorough analysis of these particular markets. Additionally, HCA operates within a fairly specific niche of the health care market. To capitalize on the aging population of Americans, HCA might consider vertical integration and diversification of product lines that will care for patients from “cradle to grave.” Due to its prevalence across the United States, HCA can also capitalize on a providing care to people in its facilities even as they move.

An analysis of the “internal fix-it” quadrant indicates that HCA should utilize some of the same strategies used in the “future” quadrant; namely, vertical integration and related diversification. Furthermore, HCA already executes an aggressive and well-planned enhancement strategy, and should continue this strategy to maintain future growth and sustain its competitive advantage. HCA’s enhancement strategy focuses heavily on developing leadership and educational skills of its personnel, and also focuses on the infrastructure and capital investment projects so critical to sustain a modern, safe environment for patient care. The educational programs help offset the national provider shortage and help mitigate this external threat.

Concerning the “external fix-it” quadrant, the new Medicare bill and the internal efforts towards developing its personnel allows HCA to effectively deal with many of the external threats. The growing uninsured population is still a concern, as well as the continuing rise in health care costs. HCA cannot affect the uninsured population, however, it can use its sheer size and volume purchasing opportunities to reduce the cost of supplies and equipment obtained. Furthermore, by offering educational scholarships and maintaining a high employee satisfaction, HCA is poised to keep its talent in-house, and reduce employee turnover. This too helps to reduce health care costs.

Lastly, the only serious consideration in the “survival” quadrant involves potential suits or investigations resulting from business practices. HCA has settled its legal matters with the Federal government from 1997 issues, and has a plan to pay these fines. If HCA truly instills its organizational values, and operates in an ethical manner, it can reduce its risk from investigations of these types. HCA established a comprehensive Ethics and Compliance Program which helps ensure ethical and legal business practices are followed.

Implementation Strategies

Service Delivery

In order to support the expansion, vertical integration, and penetration strategies discussed above, HCA must aggressively pursue well-thought out and well-managed implementation strategies. Much of the implementation strategy should be focused on the service delivery aspect of the implementation strategy. As part of the pre-service strategy, HCA should first embark on a market research survey of potential new markets to determine the feasibility of entering these new markets. With its strong financial footing, HCA might be able to buy out existing hospitals or regional chains to gain a foothold in these new markets. An example of this is HCA’s expansion into the Kansas City market by the acquisition of the Health Midwest Network of hospitals (HCA Annual Report, 2002). Another pre-service marketing strategy would involve a marketing campaign that touts the “portability” aspect of HCA. With facilities in 23 states focused on urban and suburban areas, HCA can address the mobility of many Americans. As people move around the country, they could remain with HCA facilities, ensuring better continuity of care. Advancements in information technology medical systems, such as the electronic patient record, would facilitate this.

HCA’s investments in medical technology and employee education are part of developing its support activities (strategic resources). These investments ensure that point-of-service care is thorough and effective. The use of the improved IT systems and clinical pathways would also provide mass customization of health care delivery, and help reduce cost and medical errors. High employee satisfaction is also an indicator that the care provided is done in a positive manner, and probably results in positive patient satisfaction survey scores.

HCA must maintain its high quality patient care. This is one of its definite benefits, and the quality care provided will help attract and maintain new patients.

After-service strategies should focus on preventive treatment and timely follow-up for services as required. Expanding its product line to accommodate primary care and other alternative medical treatment allows HCA facilities to provide preventive care in order to avoid more expensive, catastrophic care later. The use of IT systems to track patient’s conditions and schedule appropriate follow-up appointments will allow HCA to maintain the health and well-being of its patients, and also provide a more steady revenue stream.

Support Activities

Concerning strategic resources, HCA has dedicated employees and dedicated patients. HCA must capitalize on its domination in its market niche, while expanding its product lines to attract other types of patients. This organization reinvests heavily in its strategic resources as mentioned in previous areas of this case analysis. Specifically, HCA focuses on developing and improving its human, information, and technological resources. This is one reason HCA has been so successful. HCA adapts to the market with dynamic and current resources. HCA’s overall organization is based on a divisional structure. This structure allows for better responsiveness in local markets, and allows for decentralized leadership and executions. Some of the limitations of this structure, however, are the difficulty for HCA to maintain its reputation, and it requires well-thought out organization-wide policies and decision-making guidelines. This type of structure is complicated to run. Concerning its organizational culture, HCA appears to foster this through inculcating its organizational values to its employees, and the leader training and education programs help foster a positive employee climate. HCA’s mission and value statements recognize the organization’s true purpose; that is, to provide the best health care possible.

Unit Action Plans

HCA must clearly identify unit action plans with distinct, attainable objectives, timelines, and responsibilities so that it can manage its vast operations, and ensure that its subordinate facilities are on the right track. HCA’s objectives should be focused on becoming a leading provider in large urban and suburban communities. It is readily apparent where large population centers are located in the United States. In order to attain its goal, HCA must have a plan with measurable objectives, and means to evaluate its success. Obviously, expanding into new markets entails a significant financial expenditure and utilization of resources. HCA must identify the financial costs associated with any expansion plans, and determine the sources of funding; whether with internal funds, or obtaining loans for this purpose. Budgets must be prepared to measure the progress of these endeavors. CEOs and COOs of other HCA facilities in neighboring states should be consulted to obtain an assessment of these new markets. Once all the research has been completed, and resources identified, HCA must clearly assign the responsibilities of meeting these objectives to individuals / teams that are empowered with the information and resources necessary to accomplish these goals. Without a well-thought out plan, it is nearly impossible for HCA to determine if it is meeting its strategic goals, or provide a feedback mechanism to assist in attainment of these goals when challenges are met, or capitalize on opportunities that present themselves.

Strategic Control

As HCA continues to implement or alter its strategies, it is imperative that certain control and feedback mechanisms are in place. Such mechanisms will help maintain focus and initiate timely actions when needed. The demands of the health care market continue to increase as competitors vie for valuable market share and health maintenance organizations continue to broker new deals. HCA cannot afford to lose its competitive advantage to these environmental forces. Therefore, HCA must establish a timeline to review its mission, vision, values, goals, adaptive, market, competitive, and implementation strategies. Whether reviewed as a whole annually, or by components quarterly, a review will help HCA remain competitive. If during any of the reviews, components are identified as outdated or no longer applicable, they must be changed as soon as possible (Ginter, Swayne, and Duncan 2002).

HCA’s continued growth, whether within the United States or worldwide, must be closely managed. It is imperative that internal controls are built into organizational polices and procedures at all levels of the organization. These control measures will allow local management to assess performance and recognize unidentified variations in the strategies being employed. Utilizing current technology and information systems will improve communication throughout the organization and allow HCA immediate access to its subordinate facilities. Rapid collection and analysis of data and reports from these subordinates will allow upper-level management to assess the overall organizational strategy, and determine what is working and what adjustments need to be made. Regulatory constraints and guidelines, such as the Health Information Portability Accountability Act (HIPAA) will also add strategic controls for the organization. One final control is the HCA stakeholders (both internal and external). The stakeholders have a vested interest in HCA’s success; therefore, they too will provide essential feedback. This feedback will aid in assessing current organizational success, and identify potential changes to improve business processes and maintain the competitive advantage (Ginter, Swayne, and Duncan 2002).

Conclusion

HCA has the opportunity to continue dominating in its niche of the health care industry, and also to expand its services to take advantage of external market opportunities. It appears that HCA is being led by a competent, forward-thinking, and dedicated team of professionals. HCA must maintain its competitive advantage by using its resources (human, information, and technological) to shape the health care environment, and respond to changes in the complex health care market. Utilizing strategic planning and execution processes will allow HCA to continue to lead in this challenging market.

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