Strategies to reinvent Australia’s health sector

Health industry administrators internationally face constant pressure to reduce operating costs, while at the same time they are pressed to meet significant increases in demand for services, as well as the facilitation of ongoing investment in infrastructure.

Externally, operational problems are compounded by the need to provide increasingly complex services within an environment of an ageing population, scarcity of skilled staff and a continual rise in the incidence of drug and alcohol abuse.

The solution that offers long-term relief from the toxic mix described above is well recognised, but is extremely difficult to implement. That solution is realised by a dramatic reversal of growth in demand, driven by the transformation of health service offerings altogether; from a protocol of treatments and cures towards a far more proactive agenda of avoidance and prevention. As the most visible and greatest mass of health care service providers, hospitals are the natural leaders in the execution of this solution.

In most states in Australia regionally grouped hospitals are responsible for their own destiny and by definition, their own business strategy. A review of the background research contributing to the content of strategic plans produced by these groups reveals a recognition and acceptance of the need for change as described above. There is however a high propensity for many hospital plans to include content that places a greater emphasis on pressing operational issues, over an agenda prescribing the urgency for a mandate of change (eg. from “investing in research and learning” to “rapidly introduce obesity reduction programs”).

An organisation facing a similar need for reinvention was Zoos Victoria, who in 2009 identified an imperative to introduce a strategy that would radically transform their entire business model. In that case, Zoos Victoria was responding to a global call for reform, starting with the fundamental values and beliefs that had been at the core of everything Zoos had traditionally stood for.

Rather than the continuation of a model that saw animals being used as “actors” in recreation and entertainment activities, Zoos Victoria sought to reinvent itself into a business entity whose primary focus was on animal conservation. The reinvented purpose for Zoos Victoria was described as being an “animal-based recreation destination with conservation as its main focus; that included educational programs, involvement in conservation projects and the conduct of research projects that support operations”.

In order to articulate and then communicate its overarching transformational agenda, Zoos Victoria devised a 20 year strategic plan which allowed its managers to rise above everyday operational issues. That strategy became the blueprint for reinvention; it included an articulation of an envisioned future based on a new vision, mission and a succinct suite of strategic priorities. Current and more operationally oriented demands and the management of the inevitable emergence of strategic issues created by the transformation journey are dealt with in five year corporate plans; these are reviewed and revised on an annual basis.

An added bonus for the health industry when dealing with transformation of the type undertaken at Zoos Victoria would be the inevitability that content described in a 20 year strategy could be readily split into more manageable “chunks”. At one level we could expect to see issues that would be of interest into operatives working within the domain of Federal and State Governments; another level could be of greatest interest to participants working within the domain of operational/patient interface. A third could be in between, of interest to chief executives and senior managers of specific hospitals located within a region.

There are of course many other factors that must be considered in the delivery of transformation initiatives; these could include assessments of strategic risk, use of analytical tools, a capacity to respond to unforeseen consequences of transformation and the articulation of a pathway to implementation. Benefits though would be significant; they would include a vast reduction in costs, the freeing up of scarce resources and major improvements in the quality of individual lives.

Paul Hunter is the chief executive of the SMI, a membership organisation that administers the Certified Strategy Practitioner (CSP) accreditation program. The Strategic Management Institute (SMI) is launching a series of strategy related education seminars and courses for participants in the health industry commencing mid July.