Community hospitals are fighting some of the biggest problems in healthcare, with little access to the resources and support they need to achieve healthy margins and drive better care for their patients. But some, like Davis Health System, are reevaluating their financial planning processes and finding opportunities to make a huge impact.
What is Dynamic Planning and Why Do It?
Dynamic Planning is a process that embodies a set of leadership and management principles that allow organizations to maximize their responsiveness to ever-changing market conditions.
For health systems, this means nurturing a continuous improvement mindset while decentralizing financial stewardship to front-line managers who control most of the cost at the organization. It also means more value-add resource allocation and real-time feedback, so leadership can remove barriers and respond to gaps to target.
Why do it?
When organizations decentralize financial stewardship, staff are incentivized to focus on maximizing the efficiency and quality of every decision. While traditional, organization-wide cost reduction initiatives can find big-dollar, low-hanging opportunities, this is rarely repeatable. By empowering managers to identify and address smaller opportunities every day that, in aggregate, make a material impact to the bottom line, organizations ensure year-over-year cost reductions.
Shifting to a continuous improvement mindset allows for more value-add resource allocation. Analysts and operators are focused on their value-add function. Operators become focused on reducing controllable costs instead of budgeting their entire P&L, and analysts focus on supporting operators in reducing costs and analyzing variances rather than consolidating or haggling over the budget.
Combine decentralized financial stewardship with a continuous improvement mindset and stakeholders get real-time feedback. Business decisions are made at time of need, not 6 months after the problem occurred. Long- and short-term strategic decisions are more informed, respond directly to gaps and ensure a more agile, strategic planning process.
Why does it make a difference?
While shifting to Dynamic Planning can feel like a daunting task, payoffs are ongoing. As an organization’s culture shifts, with team members becoming invested in financial stewardship, finding cost reduction opportunities becomes a thoughtful, strategic and iterative process. Manager satisfaction improves as they feel empowered and trusted in their day-to-day ownership of their clinic and operational responsibilities.
Without compromising quality or patient experience, Dynamic Planning provides ongoing continuous financial improvement and empowers real-time, informed decision-making at every level of the organization.
To learn more about Dynamic Planning or how organizations leverage this methodology to drive ongoing improvements, reach out to ProfessionalServices@stratadecision.com.