The approach hospitals take to strategic planning is often fraught with problems. And many of these problems relate to physicians. In this article we will focus on three of those issues.

The first relates to physician manpower planning. Many hospitals separate physician manpower development from strategic planning. However, it should be an integral part of the strategic plan.

There are two primary reasons for this: First, recruiting and retaining physicians is expensive. Medical staff development plans often cost millions of dollars to implement, and compete with the capital needs of other strategic priorities. It is impossible to do a comprehensive financial plan without understanding the cost of the medical staff development plan.

A second issue is the relationship of the medical staff plan with the hospital’s growth strategy. The objective may be to grow into new geographic­ areas, grow new services, expand the scope of the medical staff, or any number of issues, but almost all growth strategies relate to medical staff. Developing a medical staff plan based on community need and strategic need is an essential part of any growth strategy.

The second area of concern has to do with the degree of involvement of physicians in the strategic planning process. As physician and hospital relationships become increasingly intertwined through joint ventures, employment, and other vehicles, the need for physician involvement has grown. The strategic planning process should include an active physician strategy subcommittee. This group can look at the needs analysis, help management to better understand the benefits and pitfalls of physician employment, and helped define the physician hospital relationship that will be most beneficial to both parties. Physician involvement in strategic planning will go a long way toward building the communication and trust required for each party to be successful.

The third area relates to follow up. Intricate plans are developed and put on the shelf, with management, only from time to time, evaluating progress. This is a risky strategy with any board, and regular follow up should be built into the strategic planning process. However, this follow up should not be just done with the board, but should be done with medical staff leaders, as well. This is crucial to building ongoing trust and strengthening relationships between the executives and the physicians. Failure to follow this approach will lead to problems.

Obviously, there are many other missteps that can be made during strategic planning. We commonly see hospitals fail to do good action planning or fail to do good financial planning, both of which can limit the effectiveness of the strategic plan. However, the most costly missteps are those that involve physicians. Given the increasingly complex relationship between physicians and hospitals, this area is one that should receive special focus. That focus will pay great dividends as physicians better understand and, therefore, can better support the strategic direction of the institution.


David W. Miller

Founder and Chairman