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Anthem Blue Cross Blue Shield: Balanced Scorecard Analysis
Executive Summary
The initial strategy developed for Blue Shield contained the four primary objectives that required improvements. The feedback, provided by peers and colleagues highlighted some essential parts of the plan that need adjustments. Firstly, it was advised to define more accurately the scope of technological development that the company wants to achieve. In addition, lean practices were pointed out to be increasingly important in the healthcare industry. The legal aspect of developing smartphone application was part of the feedback and was included in the knowledge gaps. Finally, comments regarding the structure of the organization towards adhocracy were omitted, as those were recommendations and not compulsory aspects of the strategic development.
Focusing technology development on chronic disease care can provide a competitive advantage for Blue Shield. Lean practices can help personnel carry out their daily tasks better, which would improve patient outcomes. Financial objective of the Balanced Scorecard is reflected through the need to invest in the expansion of the company. The strategic plan would affect human resources through education and a requirement for more personnel in the newly opened branches. Financials of Blue shield would be impacted because the organization would need to invest in the execution of the plan. Technical resources would be improved through purchasing new equipment to support smartphone application development.
An alternative plan would include omission of branches expansion for Blue Shield and emphasis on cost reduction. Additionally, patient-centered care would be introduced as part of a process improvement plan. By doing so, the physicians would be able to provide better quality services because cases would be researched individually. The treatment plan would be tailored specifically to a person with regards to his or her preferences.
Introduction
It is crucial for Anthem Blue Cross Blue Shield (ABCBS) to create an appropriate strategic plan that would correspond to the opportunities from the external environment. Additionally, the ability to receive feedback or criticism from industry professionals can help improve the existing project. Some critical alterations were made that improve ABCBSs Balanced Scorecard to ensure that the company can achieve its goals.
According to Kvedar, Coye, and Everett (2014), the primary challenge that modern healthcare organizations face is the need to improve quality while providing strategies for cost reduction. The primary drivers of such alterations are the Affordable Care Act and other initiatives that aim at ensuring that most Americans can access healthcare services. Telemedicine is currently a developing industry with many opportunities for new approaches and technology in regards to patient-physician communication.
Kvedar et al. (2014) state that companies should focus on rapidly developing, testing, and implementing information technology solutions into medicine to achieve the goal. This paper aims to examine the initial Balances Scorecard in regards to the received feedback and offer alternative strategies for development.
Analysis of the Anthem Blue Cross Blue Shield
The previous report that was made for ABCBC was done with the help of the TOWS Matrix and PEST approach. In addition, the structure of the organization was examined to determine the relationship between departments and branches. Based on these components, a Balanced Scorecard was developed which reflected the goals, means to achieve them, and success measures. The main opportunities for Blue Shield are revealed in need to change the approach to health care service delivery dictated by the social and legislative changes.
Traditional ways of providing health care prove to be no longer substantial for the consumers. According to Gingrass (2015), the changing healthcare marketplace requires organizations to examine access to care in new ways and to find strategies that can increase opportunities for patients to receive their services (p. 64). With the changing external environment care providers have to adjust their operations to be able to respond to the challenge. However, apart from some difficulties these alterations provide potential long-term opportunities for Blue Shield as they encourage the organization to seek better ways of providing their clients with access to medical assistance.
The industry is functioning under a lot of pressure from both the government and patients, which proves to be difficult. According to Kvedar et al. (2014), the business aspect can be described as overburdened and extremely costly delivery system (p. 194).
Thus, the approaches from care providers such as Blue Shield have to be taken to ensure that patients receive high-quality services at affordable costs. One of the aspects that prove to be crucial in this change is the possibility of teaching patients ways to care for their chronic diseases1. Thus, focusing on a new strategy on developing a telehealth system that can provide individuals with insight on their condition and its possible interventions can be the key to the new policy of ABCBS.
Previously the scorecard focused on the provision of new technology, such as smartphone applications to enhance care. The current plan offers to aim at creating a telehealth application that would help patients manage their chronic conditions. This change would be helpful in reducing costs, as people would be more aware of their health state and approaches for its improvement; thus, the number of hospital visits or consultations would be minimized.
Medical personnel shortage is among the primary threats that the healthcare industry in the US may face. However, some companies can use the issue as an opportunity to introduce new approaches, which would not require additional staff members. To adhere to this long-term growth opportunity, Blue Shield should focus on personal development. Lean practices should be introduced as part of the educational strategy for the company.
The previous plan focused on ensuring that employees are capable of utilizing technological solutions in their daily work. However, additional knowledge regarding lean strategy can be helpful in understanding ways to carry out the everyday tasks2. According to Mannon (2014), the aim is to teach frontline workers to identify and solve problems every day (p. 7). Within healthcare, the approach should ensure that the number of adverse outcomes for patients is minimized. In addition, staff members would be more motivated by the responsibility they have.
Specific criteria that can be used to measure success should be applied in the form of a benchmark evaluation. According to Serrador and Turner (2014) components such as meeting time, scope, and budget goals are typically regarded as essential in a projects success (p. 75). Meeting these indicators would suggest that the implementation of the plan was carried out correctly. However, Serrador and Turner (2014) emphasize the importance of stakeholder engagement and their feedback is crucial for any new process within a company. Therefore, an additional success indicator would be positive feedback from both personnel and clients of Blue Shield
The operational component consists of the current organizational structure of ABCBS. The company operates by applying a strategic business unit (SBU) composition, which allows departments to work on their individual projects without excessive control from the executives. In the strategic planning process, the opportunities and operational activity are essential as analyzing them helps one understand ways in which the company can change to develop and improve in the existing environment.
Therefore, both the TOWS matrix and PEST analysis were helpful in understanding potential growth possibilities for the company. In addition, the American Hospital Association (2018) provided valuable insight into the industrys operations and long-term opportunities. Based on the data a new strategic plan was created, which includes financial, customer experience, business processes, and learning objectives. The current plan offers to focus on building a smartphone application that could be utilized to help patients care for their chronic health conditions. Additionally, lean practices as part of the educational plan can be helpful in teaching staff members ways to respond to everyday challenges.
Proposed Strategic Plan
Strategic planning is necessary for any company in order to ensure that development and growth are carried out properly. According to Smith and Loonam (2015), the current industry environment is making it necessary for establishments to apply business techniques and approach to their operations. Additionally, it is essential to ensure that specific success measures are set to understand the successfulness of the plan. The following strategy was created with regards to the provided feedback and offers a more in-depth understanding of the ways in which the company can achieve its main objectives.
The proposed strategic plan offers a change in four crucial aspects of business operations. Those alterations are an investment strategy, which would focus on technology development, network extension to ensure more coverage for customers across the US, operational efficiency through enhancement and new technology, and staff education program. The feedback from peers and colleagues displayed that a more specified direction in the four aspects of the plan should be applied.
Therefore, the revised strategy should include an education program for personnel that focuses on teaching those lean practices, and technology usage. The investments should be made in regards to developing a smartphone application that would canter around chronic conditions care. Opening additional branches in different states should remain as part of the plan as no comments were made regarding this component.
According to the provided feedback, important information regarding the scope of operations in Anthem Blue Cross Blue Shield was added. ABCBS headquarters are located in Indianapolis, Indiana ( Anthem Blue Cross and Blue Shield , n.d.). Blue Shield is its division dedicated to telehealth, while the company primarily focuses on insurance provision. In 2017, its revenue was estimated at around ninety billion dollars ( Anthem Blue Cross and Blue Shield , n.d.).
Moreover, the company has shown a forty percent growth over the past five years. The Blue Shield program is currently available in ten states. In addition, the company states that one in eight citizens of the US uses their services. The number of employees is estimated at around one thousand two hundred. Therefore, ABCBC is a large organization, which should lead its operations with considerations for the community, employees, and patients.
The effects of strategy formulation on human resources will be displayed in the training program directed at expanding the personnels understanding and ability to use technology. In addition, new approaches to everyday tasks introduce by lean practices should improve personnels knowledge of the aspect. Balle, Morgan, and Sobek (2016) state that skilled people, not processes, that create great products (para. 1). Thus, as was reflected in the Balanced Scorecard staff members and their capabilities should be the center of attention within this strategy. The number of employees would increase according to the expansion plan. Therefore, human resources of Blue Shield would be affected through the improvement of their professional skills and an increased number of staff members.
The influence on financial resources is in the fact that Blue Shield would have to invest in the expansion and technological developments. The company will have to identify the possible ways of obtaining the required money, whether through external or internal investments. Although the current external environment requires cost reduction from healthcare companies, the objective cannot be achieved without an alteration in the existing processes. Thus, the financial recourses would be utilized to enhance current operations.
The proposed strategic plan will have a significant impact on the technological resources of the company. This is because the primary objective is to develop a new and easy to utilize way for patients to contact their physicians. Thus, Blue Shield will develop a smartphone application that would enable such a connection. The establishment would need to create an appropriate infrastructure that would support the technology in question, which would require purchasing hardware for technical support.
Knowledge gaps are mainly focused on the amount of investment that ABCBS would have to obtain to execute the plan. The primary component that is currently unknown is the amount of spending the company has to make in order to open one telehealth division. While it is evident that the amount of money spent can wary based on the location and number of personnel required, fundamental insight into the topic would be helpful in developing the implementation strategy.
Missing information is in regards to legislative regulations regarding smartphone applications applied to patient-doctor communication. More research will be conducted on the topic to ensure that Blue Shields clients receive legal help and the establishment adheres to the laws. Unanswered questions are the current state of technical knowledge that the medical personnel has.
Alternative Strategic Plan
According to the TOWS matrix and the analysis of the environment, an alternative strategy can focus on improving the quality of the current units in the ABCBS program. Firstly, the TOWS highlighted that Blue Shield has a large number of subsidiaries within the US. Secondly, cost reduction is the primary objective for all healthcare establishments under the new law. Finally, the mission of the company is based on transforming the industry through established solutions, while introducing new technological approaches would require a change in the statement. Incorporating more patient-oriented approach and refining the current practices to ensure that the existing branches of Blue Shield maximize their profitability can be a key to the new plan.
Ensuring that Blue Shield program is profitable and bring value to its employees and patients should be the key objective. According to Balle et al. (2016), most managers focus their strategies on cost reduction and quality improvements.
Taking this approach into account, Blue Shield would need to focus on the current operational processes and improve them to achieve such a goal. Combining the information from the environmental analysis and the managerial approach, Blue Shield can focus on implementing the patient-centered approach to enhance the patient experience and ensure that its clients keep choosing the program as their healthcare provider. By doing so, ABCBS would be able to avoid excessive financial spending as no need for investment into new branches, software, and hardware, as well as Blue Shield personnel training, would be in place.
Across the US, healthcare establishments are focusing their resources on researching the needs of a particular person as a key to enhance health outcomes. Sacristan (2013) states that patient-centered medicine is developing alongside the concepts of personalized medicine and tailored therapeutics (p. 6). Such an approach emphasizes aspects that are of importance to a particular person treated in the establishment.
Thus, individual preferences, specific healthcare preferences, personal values, and financial opportunities are taken into account (Sacristan, 2013). Therefore, medical personnel would have to research and identify specific aspects that contribute to the health of an individual in question. Telehealth program has a particular advantage with such practice as a patients information required for such an in-depth examination can be stored and accessed by doctors from their computers.
Specific criteria that can be used to measure success should be incorporated into the benchmark evaluation. Those should include patient satisfaction to understand whether the chosen method and practices are suitable for people who use telehealth (Mosadeghrad, 2015). Additionally, health outcomes with such approach should be rated to give a perspective on whether patients are receiving better care. It is especially crucial to evaluate whether clients of Blue Shield feel the difference with their health state in cases whether their characteristics and preferences are taken into account.
Recommendations for Implementation
The essential aspect of strategy implementation is understanding the role of the organization in the community. For Blue Shield, it is reflected in its directional strategy, which emphasizes the importance of improving approaches to healthcare services. The role of leadership within the organization is crucial for both ensuring that an organization chooses a correct direction and executes the strategy correctly.
According to Mangelsdorf (2016), people who develop corporate strategy and their professional skills are crucial success predictors. Therefore, ensuring that people are planning and executing the development is essential. In addition, according to Sheffi (2015), the ability to predict difficulties or changes in the companys external environment is a critical component of proper strategy preparation. Therefore, adequate leadership is essential for Blue Shield as it is the basis of the companys success.
To execute the plan successfully Blue Shield should assess the missing information to minimize knowledge gaps. In addition, feedback from primary stakeholders would be helpful in understanding their thoughts regarding the proposal. Financial resources for investment in education, expansion, and technology development should be obtained. The critical aspect of the strategy is to ensure that the outcomes correspond to the success indicators and benchmark evaluation that was identified in the approach.
Feedback from Stakeholders and Colleagues
Lean practices in healthcare are becoming increasingly important as they ensure cost reduction and better outcomes. Thus, it was suggested that this aspect is included as part of the strategic plan to ensure that the direction of Blue Shield is proper. According to Mannon (2014), the method is a set of principles and a quality improvement ideology (p. 7). The basic principle of the approach is that managers coach their employees to deal with everyday issues they may encounter.
The policy applies to healthcare as it combines patient-oriented practices and cost efficiency. This results in each medical staff member approaching a case as an individual scenario and investigating it. Lean can be helpful as part of the teachings strategy for Blue Shield as it can ensure that employees are capable of making their own decisions and carrying them out.
As was pointed out by one of the peers, merely focusing on developing a smartphone application can be a broad scope for a strategic plan. Thus, choosing a smaller aspect of health care and developing a solution tailored to it may be a better approach. This offer was substantiated by research from Kevdar et al. (2014), as the need for such a strategy was pointed out by the authors. Therefore, the plan was changed to ensuring that patients with chronic conditions receive a technological solution that would help them take care of their state without additional visits to medical establishments.
Stakeholders engagement was pointed out to be crucial to any organizations development planning. Thus, this part was incorporated into the analysis as a component of the success indicators. In addition, the aspect of engaging both personnel and patients into the process of strategic evolvement was added. This is crucial, as stakeholders are the ones that will be carrying out the plan, as medical professionals would be the ones receiving education and providing new services to patients. Additionally, patients will be receiving health care with the new approach; thus, their health outcomes are essential indicators of whether the program reached its objective or not.
One of the comments emphasized the importance of current legislative initiatives and aspects of cost reduction. While the original TOWS matrix mentioned the element among the external threats when discussing to the Affordable Care Act, no statement of legal regulation regarding smartphone applications and their use in healthcare was made in the initial report. Therefore, this information was added as a knowledge gap in this analysis.
Another part of the peer feedback was connected to the change in organizational structure from flat matrix SBU to adhocracy. The advice was based on the fact that healthcare organizations may require an easier to understand structure with less ability to rely on an individuals decisions. This claim is connected to a need for control and a clear structure for healthcare organizations as they deal with serious matters such as peoples health. This part of the feedback was omitted as the organizational structure change was offered as advice and not a mandatory aspect of the plan. In addition, the strategy aims to ensure innovation, which can be better carried out with the approach of adhocracy.
Conclusion
Overall, the proposed strategy contains changes that were made in accordance with the received feedback. It is evident that healthcare as an industry is undergoing crucial changes that present opportunities for expanding the number of branches, offering service delivery at reduced costs, and responding to the medical personnel shortage problem. To use the opportunities, Blue Shield should focus on personal education on the subject of information technology and lean practices. In addition, the company should develop a smartphone application that would respond to a need for chronic diseases care.
References
American Hospital Association. (2018). 2018 environmental scan.
Anthem Blue Cross and Blue Shield. (n.d.). Web.
Balle, M., Morgan, J., & Sobek, D. K. (2016). Why learning is central to sustained innovation. MIT Sloan Management Review, 57(3), 63-71.
Gingrass, J. (2015). Changing the channel: Strategies for expanding patient access. Healthcare Financial Management, 69(4), 64-68.
Kvedar, J., Coye, M. J., Everett, W. (2014). Connected health: A review of technologies and strategies to improve patient care with telemedicine and telehealth. Health Affairs, 33(2), 194-199. Web.
Mangelsdorf, M. E. (2016). Mastering strategy. MIT Sloan Management Review, 57(2), 67-71.
Mannon, M. (2014). Lean healthcare and quality management: The experience of ThedaCare. Quality Management Journal, 21(1), 7-10. Web.
Mosadeghrad, A. M. (2015). Developing and validating a total quality management model for healthcare organisations. TQM Journal, 27(5), 544-564.
Sacristan, J. A. (2013). Patient-centered medicine and patient-oriented research: Improving health outcomes for individual patients. BMC Medical Informatics and Decision Making, 13, 6. Web.
Serrador, P., & Turner, R. (2014). The relationship between project success and project efficiency. Procedia Social and Behavioral Sciences, 119, 75-84. Web.
Sheffi, Y. (2015). Preparing for disruptions through early detection. MIT Sloan Management Review, 57(1), 31-42.
Smith, M., & Loonam, J. (2015). Exploring strategic execution: A case study on the use of the balanced scorecard within an Irish hospital. Journal of Strategy and Management, 9(4), 406-428. Web.
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