Mendocino Coast Health care District
Strategic Plan: 2000 - 2005
Executive Summary

Mendocino Coast Health Care District's (MCHCD) mission, combined with the difficult challenges in healthcare, prompted the Board to undertake a strategic planning process to chart the hospital's course for the next 3 to 5 years. It is understood that unforeseeable events in the external and internal environment will make it necessary to modify the plan; however, the document provides a basis from which to make changes. Similarly the planning process helped to articulate the leadership's values and the organization's role; these provide a context for making adaptations to the plan as necessary.

The active participation of the board, management and community during the planning process shaped the content of the plan and created a foundation of uniform understanding from which progress can be monitored.

This Executive Summary presents the strategic headlines - - the driving forces, goals and key initiatives of the plan.

1. Pressures on healthcare providers for performance in terms of cost, quality and service - will only escalate over the next several years.
   
   • Governmental payers, primarily Medicare and Medi-Cal, are expected to continue holding down reimbursement levels to hospitals and physicians. Providers, like MCHCD who are dependent on governmental payers, will face continuing pressure to keep expenses within revenue.
   • Regulations, such as California SB 1953 related to earthquake retrofitting of hospitals or the attempted legislation to regulate staffing ratios, will place demands on hospitalsí capital and operations.
   • Public expectations for quality, service, access and affordability will remain high; consumers demand for, and access to, information will increase their ability to measure and compare performance
   • These factors will require on-going efforts to improve efficiency while maintaining quality and service; they also imply there will be limited ability to generate funds internally to invest in equipment, facilities and service development
     
     
2. MCHCD serves a community of 25,000 people who are dependent on local health care professionals for acute care. The demographic characteristics signal expectations for MCHCD's scope of services.
   
   • Eighty-five percent of MCHCD's patients reside within a 15-mile radius of the hospital. This primary service area has almost 20,000 people with population growth of less than 0.4% per year during the 1990s.
     
   • The demographic trends show increases in the Hispanic population (over 14% of the county population) and a growing number of elderly (17% of the primary service area compared to 14% of the county population).
     
   • These characteristics indicate that MCHCD can expect continuing demand for obstetrical care from the younger, Hispanic populations as well as for conditions such as diabetes and cervical cancer, which have higher incidence in Hispanic groups. The older population will require cancer and cardiac care particularly, as well as ophthalmology and general primary care.
     
   • The community has limited health insurance coverage and almost no managed care coverage. Seniors are enrolled in traditional Medicare and 19% of the county is enrolled in Medi-Cal. Without many large employers to provide group insurance, the population tends to have limited coverage through individual plans or is without healthcare coverage at all.
     
   • The relative geographic isolation of the coast towns highlights the communityís reliance on MCHCD for emergency services particularly.
     
     
3. MCHCD's role and market position point to the opportunities for program development
   
   • The MCHCD leadership and community participants describe the organization's roles and priorities as 85% direct provider of acute care services, 10% healthcare resource and 5% catalyst for a healthy community.
   • MCHCD's market share of the primary service area has been 68% for the last several years demonstrating the reliance that the community places on the hospital. In specific services, notably General Surgery, Gynecology and Orthopedics, MCHCD has lost market share; there is an opportunity to regain position in these services. MCHCD's market share of the secondary service area is 26%.
   • MCHCD's goals for growth are to increase service to the primary service area by expanding the range of services, to increase market share in General Surgery and Orthopedics and to increase use of MCHCD by the secondary service area.
   • Near-term initiatives to meet these goals are to implement telemedicine for Dermatology, promote Caring for Women, and promote ambulatory surgery. Mid-term initiatives include expanding telemedicine to Otolaryngology, Allergy and Cardiology, expanding the diabetes program (including bi-lingual availability) and assessing feasibility of offering cardiac rehabilitation. By the third year of the plan, other initiatives are to evaluate complementary medicine and extending services in Gynecology and Oncology.
     
     
4. Operations need to be competitive in terms of price, quality and service.
   
   • Even though the community is dependent on MCHCD for emergency services, it has choices for acute care.
     
   • MCHCD's productivity improvement initiative use quantitative benchmarks from the MECON company and patient satisfaction survey scores. Management uses the benchmarks to set targets for improving practices within the hospital.
     
   • A core strategy for the hospital is to develop approaches that set standards for quality inpatient care and also improve efficiency of inpatient episodes. A Hospitalist Service is one approach that is being evaluated. Alternatively, a task force of physicians, management and employees would be charged with evaluating clinical care methodologies.
     
   • Major initiatives in operations are to design and implement clinical pathways and clinical protocols. These tools are used to establish clinical standards, monitor costs, when shared with patients, increase patientís understanding of their treatment regimen.
     
   • As necessary, approaches will be designed and implemented to reinforce or improve customer service orientation among employees and professional staff.
     
     
5. The interdependencies of hospital and medical community are especially critical in less urban areas and need to be cultivated in the Mendocino Coast Health Care District to enhance value for all stakeholders.
   
   • Overall, the medical staff's qualifications are good. Among community leaders, board members, hospital personnel and physicians themselves, there is a range of perceptions regarding some physiciansí work ethic and approach to service.
     
   • As part of its role as health care resource, MCHCD will work with the medical community to assure availability of services in those specialties that the size of the population can support.
     
   • As opportunities arise, a Business Oversight Committee will be formed to evaluate, design and oversee activities of mutual interest to physicians and the hospital. Similar to the group that is overseeing evaluation of a Hospitalist Service, the Business Oversight Committee may include a majority of physicians who are interested in and committed to development of opportunities.
     
     
6. Multiple financial strategies need to be initiated now to ensure long-term viability
   
   • Planning participants recognized the fragility of the hospital's financial situation as the most important strategic issue.
     
   • MCHCD's dependence on governmental payers combined with the limited private coverage in the community indicates that margins will continue to be thin.
     
   • Yet achieving excess of revenues over expenses is necessary to be able to invest in equipment and development of services. All net income of the hospital is reinvested to maintain and advance the hospitalís facilities and services.
     
   • Investment in facilities are required over the next several years not only to comply with state earthquake standards, but also to improve functionality for current clinical care approaches and to increase patient and visitor comfort.
     
   • To meet the goal of a net operating margin of 1%, the hospital will re-engineer processes for optimum efficiency and develop approaches to maximize collection of payments from third-party payers.
     
   • Grants are a source of funding that will be pursued as often as possible. Preferably, grants will be used for capital investments or feasibility studies rather than routine operating expenses. Near term grants should be pursued for telemedicine. At the same time, a process will be developed and implemented with routine scanning for grants availability, identification of resources for grant writing and design of processes for grant administration.
     
     
7. Communications in general and information technology in particular are requirements for long-term and on-going development of all stakeholders in the organizationís future.
   
   • As a publicly funded institution, MCHCD has an obligation to its local community for open board meetings. The board and management leadership expresses a deep commitment to open and candid exchange of information.
     
   • Routine mechanisms and forums will be developed, in addition to taping of the board meetings, to facilitate communications. A series of events (health fairs, open houses), a speakers bureau, communication through the media and public interactions through newsletters will be developed.
     
   • Information technology is an important aspect of the hospital's infrastructure that enhances communications. Information systems are used for management (performance reporting, purchasing, and inventory control), and exchange of clinical information (test ordering and result reporting). Electronic communications can be an effective way to link physicians to the hospital and each other. The Internet is a way to get health information to consumers and, eventually, to interact with patients regarding personal health advise and even scheduling. MCHCD needs to develop a long-range plan for information technology. Funding may be available through grants for the design and evaluation of alternative systems.