Strategic Planning in Health Care Organizations

Steps in Health Care Organization Strategic Planning

Strategic planning occurs in a number of steps. First is the development of a mission statement. This defines the organization’s intentions, targeted clients, and a justification of its existence. This is followed by strategic analysis, where there is an in-depth assessment of the factors defining the organization’s future. Strategy formulation then follows. Here, critical issues affecting its future are identified, and their strategic aspects are prioritized. the organization’s long-term objectives are then identified. There is thereafter a comparison of the present strategy and the planned one. the organization’s strategy and operations are closely examined so as to correlate them with the proposed ones. there is a scrutiny of the resource allocation, information systems, rewards systems, organizational structure, and managerial staff. Finally, an operation plan is formulated, founded on the long-term ones (OMAFRA, 2009).

Benefits of Financial Planning to Health Care Organizations

Financial Planning is important for health organizations. This is because it enables better resource management, especially finances. The organization is, therefore, able to achieve more financial security. Failure to create a working financial plan is a potentially disastrous situation. Among the dangers are having inadequate savings for restocking and infrastructural maintenance and development. A poor or lack of tax planning might also lead to the payment of excess taxes (Allscripts, 2008). Through financial planning, the organization is able to effectively coordinate all assets, liabilities, and income sources. This places them into perspective as compared to stated objectives and goals. It helps to provide better financial circumstance understanding and gives a clue of future possibilities (Reiff & Nelson, 1993).

Scenario Analysis, Scenario Planning and Traditional Planning Methods

There are a number of differences between traditional strategic planning and scenario planning. One of the major differences between scenario planning and others is that the former considers a wide range of uncertainties within each scenario. The traditional approach, on its part only considers a single uncertainty at a time. While their analysis checks on changes taking place in one variable, scenario planning expose the policy formulators to major interactions between major variables (Investopedia, 2007).

The nature of the processes involved in the two approaches also differs. The traditional approach is usually done by the top management (Zuckerman, 2000). The process entails, first of all, the higher management developing and coming into an agreement on the mission statement. There is then the selection of goals to be achieved and allocation of responsibilities for goal attainment to each department. This is followed by plan updating and monitoring where planners reflect on how well the objectives have been achieved (Anonymous, 2000).

Scenario planning involves first selecting existent external forces and consideration of related changes. With every single change, there exists a discussion of three scenario possibilities; reasonable, best case, and worst case that may arise due to change. The third stage entails suggesting some of the possible measures to be undertaken by the organization or the possible goals for the three settings so as to respond to every change (Krentz & Gish, 2000).

Planners then take note of the common expectations or considerations to be taken care of as a response to possible external changes. Finally, there is the selection of the most probable external changes that affect the organization for instance in a three to five-year period. There is also the identification of the most workable strategies that a health organization may undertake in response to change (Krentz & Gish, 2000).


Anonymous (2000). Scenario Planning: A Useful Tool for Health Care’s Uncertain Times. Health Care Strategic Management. Vol. 18 (10), 15-17.

Allscripts. (2008). Allscripts Acquires Extended Care Information Network. Hospital Business Week, 36. .

Investopedia (2007). Financial Statements: Introduction. Web.

Krentz, S. & Gish, R. (2000). Using Scenario Analysis to Determine Managed Care Strategy. Healthcare Financial Management Vol. 54 (9), 41-43.

Merger W., (2005). Religious Health Restrictions. Web.

Zuckerman, A. (2000). Leveraging Strategic Planning for Improved Financial Performance. Healthcare Financial Management. Vol. 54 (12), 54-57.

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