Chat with us, powered by LiveChat Economics – SWOT Analysis: Researching Economic Legislative Changes | Abc Paper

Prompt: Using the Shapiro Library and/or your other  resources, identify one recent piece of economic legislation. Describe the legislation and determine its impact on healthcare policy and delivery. For example, you could research anti-trust laws and their impact on the healthcare industry. Using a SWOT Analysis chart, assess the strengths, weaknesses, opportunities, and threats to the healthcare industry as a whole.
Guidelines: Your SWOT analysis should include a one-paragraph description of the economic policy you have chosen, followed by a 2×2 chart with headings for Strengths, Weakness, Opportunities, and Threats. Submissions will be approximately 1–2 pages in length and should follow basic APA formatting for charts and for referencing any sources within the analysis.

C H A P T E R 5


I s k a t e w h e r e t h e p u c k i s g o i n g t o b e , n o t w h e r e i t
h a s b e e n .

— W a y n e G r e t z k y

K e y T e r m s a n d C o n C e p T s

➤➤ Force➤field➤analysis

➤➤ Opportunities

➤➤ Strengths

➤➤ SWOT➤analysis

➤➤ Threats

➤➤ Weaknesses

9 1
Excerpted from Essentials of Strategic Planning in Healthcare by Jeffrey P. Harrison

(Health Administration Press, 2010).

9 2 E s s e n t i a l s o f S t r a t e g i c P l a n n i n g i n H e a l t h c a r e

In T r o d u C T I o n
Healthcare organizations must continually make adjustments to maintain optimal func-
tion (Christiansen 2002). A number of different techniques can be used to determine
where adjustments need to be made. One essential technique involves a discussion of an
organization’s strengths, weaknesses, opportunities, and threats, commonly called SWOT
analysis. SWOT analysis has been used extensively in other industries but has not been
widely used in healthcare (Kahveci and Meads 2008).

SWOT analysis is a precursor to strategic planning and is performed by a panel of
experts who can assess the organization from a critical perspective (Gibis et al. 2001). This
panel could comprise senior leaders, board members, employees, medical staff, patients,
community leaders, and technical experts. Panel members base their assessments on utili-
zation rates, outcome measures, patient satisfaction statistics, organizational performance
measures, and financial status. While based on data and facts, the conclusions drawn from
SWOT analysis are an expert opinion of the panel.

de f I n I T I o n
SWOT analysis is an examination of an organization’s internal strengths and weaknesses,
its opportunities for growth and improvement, and the threats the external environment
presents to its survival. Originally designed for use in other industries, it is gaining in-
creased use in healthcare.

sT e p s I n sWoT an a l y s I s
The primary aim of strategic planning is to bring an organization into balance with the
external environment and to maintain that balance over time (Sackett, Jones, and Erdley
2005). Organizations accomplish this balance by evaluating new programs and services
with the intent of maximizing organizational performance. SWOT analysis is a prelimi-
nary decision-making tool that sets the stage for this work.

Step 1 of SWOT analysis involves the collection and evaluation of key data. De-
pending on the organization, these data might include population demographics, com-
munity health status, sources of healthcare funding, and/or the current status of medical
technology. Once the data have been collected and analyzed, the organization’s capabilities
in these areas are assessed.

In Step 2 of SWOT analysis, data on the organization are collected and sorted into
four categories: strengths, weaknesses, opportunities, and threats. Strengths and weak-
nesses generally stem from factors within the organization, whereas opportunities and
threats usually arise from external factors. Organizational surveys are an effective means of
gathering some of this information, such as data on an organization’s finances, operations,
and processes (Carpenter 2006).

SWOT analysis

an examination of an

organization’s internal

strengths and weak-

nesses, its opportuni-

ties for growth and

improvement, and the

threats the external

environment presents

to its survival

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C h a p t e r 5 : S t r a t e g i c P l a n n i n g a n d S W O T A n a l y s i s 9 3

Step 3 involves the development of a SWOT matrix for each business alternative
under consideration. For example, say a hospital is evaluating the development of an am-
bulatory surgery center (ASC). They are looking at two options; the first is a wholly owned
ASC, and the second is a joint venture with local physicians. The hospital’s expert panel
would complete a separate SWOT matrix for each alternative.

Step 4 involves incorporating the SWOT analysis into the decision-making process
to determine which business alternative best meets the organization’s overall strategic plan.

A practical example of Step 2 of SWOT analysis is illustrated in Exhibit 5.1.

s T r e n g T h s

Traditional SWOT analysis views strengths as current factors that have prompted outstand-
ing organizational performance. Some examples include the use of state-of-the-art medical
equipment, investments in healthcare informatics, and a focus on community healthcare im-
provement projects. Other strengths might include highly competent personnel, a clear under-
standing among employees of the organization’s goals, and a focus on quality improvement.

W e a K n e s s e s

Weaknesses are organizational factors that will increase healthcare costs or reduce health-
care quality. Examples include aging healthcare facilities and a lack of continuity in clinical
processes, which can lead to duplication of efforts. Weaknesses can be broken down further


• Outstanding Medical Staff

• Strong Commitment to Community Mission

• Excellent Hospital Facilities

• Outstanding Healthcare Quality

• High Level of Organizational Efficiency


• Lack of Adequate Resources

• Lack of Primary Care Network

• Shortages of Critical Staff


• Growing Metropolitan Community

• Increased Managed Care Business

• Growing Community Healthcare Programs


• Reduced Government Reimbursement

• Competition for Specialty Physicians

• Increased Competition from Healthcare

Provider Networks

Helpful to Objective Harmful to Objective










exhIbIT 5.1
SWOT Matrix


current factors that

have prompted out-

standing organizational



organizational factors

that increase health-

care costs or reduce

healthcare quality

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9 4 E s s e n t i a l s o f S t r a t e g i c P l a n n i n g i n H e a l t h c a r e

to identify underlying causes. For example, disruption in the continuity of care often results
from poor communication. Weaknesses also breed other weaknesses. Poor communication
disrupts the continuity of care, and then this fragmentation leads to inefficiencies in the
entire system. Inefficiencies, in turn, deplete financial and other resources.

Other common weaknesses include poor use of healthcare informatics, insufficient
management training, a lack of financial resources, and an organizational structure that
limits collaboration with other healthcare organizations. A payer mix that includes large
numbers of uninsured patients or Medicaid patients can also negatively affect an organiza-
tion’s financial performance, and a lack of relevant and timely patient data can increase
costs and lower the quality of patient care.

o p p o r T u n I T I e s

Traditional SWOT analysis views opportunities as significant new business initiatives avail-
able to a healthcare organization. Examples include collaboration among healthcare orga-
nizations through the development of healthcare delivery networks, increased funding for
healthcare informatics, community partnering to develop new healthcare programs, and the
introduction of clinical protocols to improve quality and efficiency. Integrated healthcare
delivery networks have an opportunity to influence healthcare policy at the local, state, and
national levels. They also have an opportunity to improve patient satisfaction by increasing
public involvement and ensuring patient representation on boards and committees. Or-
ganizations that are successful at using data to improve clinical processes have lower costs
and higher-quality patient care. For example, healthcare organizations with CMS Hospital
Compare quality scores above the 90th national percentile are eligible for CMS pay-for-
performance incentives. (See Chapter 6 for information on CMS Hospital Compare). The
greater the number of organizations achieving such scores, the greater patients’ access to
quality healthcare. Such scores also enhance an organization’s reputation in the community.

T h r e a T s

Threats are factors that could negatively affect organizational performance. Examples include
political or economic instability; increasing demand by patients and physicians for expensive
medical technology that is not cost-effective; increasing state and federal budget deficits; a
growing uninsured population; and increasing pressure to reduce healthcare costs.

fo r C e fI e l d an a l y s I s
Healthcare organizations’ responsibility to implement change that is beneficial to the pa-
tient, staff, and organization is increasing. The primary areas driving change in healthcare
include quality improvement, customer satisfaction, improvement of working conditions,
and diversification of the healthcare workforce.


significant new business

initiatives available to a

healthcare organization


factors that could neg-

atively affect organiza-

tional performance

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Force field analysis (see Exhibit 5.2) takes SWOT analysis a step further by iden-
tifying the forces driving or hindering change—in other words, the forces driving its
strengths, weaknesses, opportunities, and threats. Forces that propel an organization to-
ward goal achievement are called helping forces, while those that block progress toward a
goal are called hindering forces. After identifying these positive and negative forces, organi-
zations can develop strategies to strengthen the positives and minimize the negatives. For
an organization to achieve success, the driving forces must outweigh the resisting forces
(Baulcomb 2003). When this state is reached, organizations are able to move from their
current reality to a preferred future.

Effective force field analysis considers not only organizational values but also the
needs, goals, ideals, and concerns of individual stakeholders. A case can be made that
individuals who promote change are driving forces, whereas those who resist change are
restraining forces. As a result, it is important to understand individuals, their attitudes, and
the culture of the organization. It is also important to identify the key stakeholders in an
issue and to develop a plan to gain their support. Kurt Lewin, the renowned psychologist
often recognized as the founder of social psychology, stressed the importance of counter-
acting organizational inertia to maintain the status quo (the resisting forces) and creating

C h a p t e r 5 : S t r a t e g i c P l a n n i n g a n d S W O T A n a l y s i s 9 5

Limited Financial Resources

Poor Payer Mix with
Low Reimbursement

Marginal Patient Safety





Low Healthcare Quality

Lack of Motivated and
Skilled Personnel

Culture Opposed to Change

Patient Perception of Quality

Driving Forces Restraining Forces

Culture of Innovation

Adequate Financial Resources


Highly Skilled Personnel

Transformational Leadership

High Low

5 4 3 2 1

exhIbIT 5.2
Healthcare Model
for Force Field

Force field analysis

an examination of the

forces driving or hin-

dering organizational


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9 6 E s s e n t i a l s o f S t r a t e g i c P l a n n i n g i n H e a l t h c a r e

an environment that proactively supports future change (the driving forces) (Lewin 1951).
Such change is accomplished by modifying current attitudes (“unfreezing” an organiza-
tion’s perspective on a particular issue), emphasizing the positive aspects of change, and
then incorporating the new attitudes in the organization’s processes (“refreezing” the new
attitudes so that they and their associated behavior patterns become entrenched in the

Many believe that a participative management style that solicits input from
within the organization is important in implementing change. It also fosters the devel-
opment of consensus within work groups, which helps to refreeze the new behaviors in
the organization.

ga p an a l y s I s
To further refine planning decisions, SWOT analysis can be supplemented by gap analysis
(see Chapter 4). Research shows there are significant gaps in healthcare practice and that
these gaps cause providers to make inaccurate assessments of patients’ conditions and
provide the wrong types of care. The result is poor clinical outcomes. Gaps in healthcare
include lack of knowledge, lack of motivation, poor access to information, variations in
patient culture and education, lack of resources, and system barriers that limit teamwork.
In one study, Robert Fleetcroft, honorary senior lecturer in primary care for the School of
Medicine at the University of East Anglia, and his colleagues used gap analysis to measure
the quality of healthcare services at 8,407 medical practices in England. Their research
found significant gaps in clinical practice, quality indicators, and patient satisfaction across
a wide range of outcome measures. Their research was important because the United
Kingdom provides pay-for-performance payments to providers based on these critical in-
dicators. In many cases, performance gaps exceeded 25 percent, and there was evidence to
support increased mortality as a result of poor performance among some of the outcome
measures (Fleetcroft et al. 2008).

Gaps also exist between the public’s expectation of high-quality care and situations
in which they receive low-quality healthcare. Characteristics of low-quality healthcare
include lack of responsiveness, marginal competence, unreliability, weak communication
skills, and breaches of confidentiality. Performance variations also result from trade-offs
in the allocation of healthcare resources (Wicks and Chin 2008). For example, some
healthcare organizations may lack the financial resources to purchase new equipment or
hire additional staff when experiencing increased demand because they have allocated
their resources for another purpose; as a result, patients experience excessive waiting times.

The complex nature of the healthcare industry necessitates a unified, systems ap-
proach to performance enhancement. For example, many patients receive only episodic
care during periods of acute illness because they do not have a primary care physician. A
system that requires patients to have a primary care provider would coordinate and give
continuity to a patient’s healthcare services. Other recommended changes include the
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implementation of evidence-based medicine in clinical processes (see Highlight 1.10), the
creation of multidisciplinary healthcare teams, and the implementation of a continuous
quality improvement process (Braithwaite et al. 2007).

su m m a r y
SWOT analysis is a precursor to the strategic planning process. Ideally, SWOT analy-
sis includes a comprehensive review of the healthcare literature, in-depth data analysis,
and input from a panel of SWOT analysis experts. Findings from the analysis are sorted
into four categories: strengths, weaknesses, opportunities, and threats. Force field analysis
supplements SWOT analysis by identifying the forces driving the strengths, weaknesses,
opportunities, and threats. To refine these analyses even further, gap analysis may be per-
formed to determine where deficiencies exist in an organization’s delivery of care. Such
analyses promote (1) a better understanding of barriers to change, innovation, and the
transfer of knowledge to practice; (2) improved outcomes; and (3) more efficient alloca-
tion of healthcare resources.





Co a s T a l me d I C a l Ce n T e r Ca s e: ex e r C I s e 5


perform➤ a➤ SWOT➤ analysis➤ for➤ Coastal➤ Medical➤ Center.➤ Use➤ SWOT➤ analysis➤ to➤ identify➤ key➤



C h a p t e r 5 : S t r a t e g i c P l a n n i n g a n d S W O T A n a l y s i s 9 7

r e v I e W Q u e s T I o n s

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