2. Executive Summary
The goal of this report is to analyze the organizations standing, market position and
evaluate potential strategy. The changes initiated by the passage of the Affordable
Care Act has radically changed several aspects in the healthcare sector. These aspects
consisting of issues ranging from services rendered, technology and
expansion/contraction.
Key strategy points will be explored and a through review of
5. Remote
Analysis
• Healthcare Industry:
– Hospital Sector
• Hospitals are significantly
affected by the changes
precipitated by the ACA and
has made this a very fluid
market situation in recent
years.
• Unprecedented growth has
led to radical changes in
operations and is continuing
to fuel change.
Analysis Points
Economic
Social
Political
Technological
Ecological
6. Remote Environment
Economic Outlook – Improved.
- PMMC has been able to generate a profit according to internal memo
Releases from Michael Brown, CEO of PMMC. Bond rating status has
Improved according to Crain’s Business Chicago.
• Requests for this information is not available via internet or is made available to the
public. Personal requests were made to executive secretary (Elidia Vazquez) but
all request were declined.
Social – Improved
- At the local level television advertisement has begun to promote Presence’s Health
Neurology treatment service line.
- Many in roads are being into the Hispanic community by utilizing local parishes to
reach out to parishioners and improve health concerns of at risk individuals. This
demographic consists primarily of the Hispanic and Africa-American community.
Global- Non-Issue
Ecological – Fair
- According to Michael Brown, CEO of PMMC. An effort to reduce waste by improving
recycling measures is in place, and effective utilization of linen processing. The
7. Technology – Poor
- Presence Health, in general, lags behind RCMS and Rush Health. The software and
hardware is dated and not being upgraded as it should be to maintain an
operational and competitive edge.
- PMMC is using several different software programs that do not always communicate
with each other. Radiology equipment is still primarily based on cassette and film
use. Only one digital room and portable x-ray device are available.
- To become efficient and transmit information in real time, more of an investment
needs to be made in efficient diagnostic equipment and patient data recording
devices.
Political/Legal – High
- 2014 is an election year with a very unpopular President Obama in office. Political
rivals have stated that they will repeal the ACA I they regain control of the senate
and legislative branch of government. Repealing this program may once again cause
new obstacles to overcome that may affect expenses and revenue streams.
- Risk of litigation is always high, even though many reductions in the minimizing of
errors has occurred. Implementation of newer and safer practices has been
beneficial to hospital operations.
8. Hospital Comparison
• Presence Mercy
Medical Center
Licensed Beds – 293
Joint Commission Accredited
Physician's – 432
Non-for Profit hospital
Provides clinical education
opportunities for colleges
Locally recognized
• Rush-Copley Medical
Center
• 210 beds
• Joint Commission Accredited
• Physician's – 500
• Non-for Profit hospital
• Teaching/Educational Hospital
• Nationally, regionally and locally
recognized health system
9. PMMC Quality Achievements
• Key quality accolades
• Certified Primary Stroke Center by
The Joint Commission
• Accredited Chest Pain Center by the
Society of Chest Pain Centers
• Hip and Knee Joint Replacement,
Certified Gold Seal of Approval from
The Joint Commission
• Emergency Department Approved for
Pediatrics (EDAP)
• Mammography, Accredited by
American College of Radiology
• Accredited with Commendation,
American College of Surgeons’
Commission on Cancer
• "A" Hospital Safety Score
from The Leapfrog Group
• Key Line of Services
• Level II trauma center
• Behavioral health and addictions
• Maternal/Child services with level II
special care nursery
• Pediatric specialists and
neonatologists from Ann & Robert H.
Lurie Children's Hospital of Chicago
• GI care
• Cardiovascular services including
open heart surgery
• Da Vinci robotic surgery
• Joint replacement program
• Diabetes wellness center
• Occupational health and employer
services
10. RCMC Quality Achievements
• Quality Achievements
• Rated “A” Hospital Safety Score by
The Leapfrog Group
• American Heart Assoc./American
Stroke Assoc. Stroke Silver Plus
Quality Achievement Award
• Joint Commission Gold Seal of
Approval for treating;
– Joint Replacement of Hip and Knee.
– Heart Failure
– Normal Delivery and Respiratory
Distress Syndrome in the Preterm
Infant.
• American College of Radiology
designation as Breast Imaging
Center of Excellence.
• Key Service Lines
• Emergency Department Approved
for Pediatrics (EDAP).
• Cancer Treatment Center
• The only Level III Neonatal
Intensive Care Unit in the Fox Valley
• Serves as a teaching hospital to
future physicians who are attaining
Residency In Family Medicine
• Designated as a Chest Pain Center
and provides extensive cardiac
services
• Nationally recognized for
orthopedic services by The Joint
Commission and U.S. News and
World Report
11. Porter 5 Forces
Threats of New Entrants:
Several new healthcare providers have emerged who are dealing with cash paying
customers. These locations consist of same day surgical centers and walk in care
clinics. These clinics are provide service customers who have insurance that covers
this service or are cash paying customers.
RCMC opened the only hospital located within Kendall County and may now begin
to build satellite clinics to divert patients to that facility or the primary hospital in
Aurora.
12. Suppliers:
Outside contracting services have been secured to bring down operating costs by not
having to provide benefit packages to that particular employee demographic.
Financial constraints are present with the allotted budgets that have been determined
to department managers. Capital budgets are limiting the amount of vendors to
approach to receive the best service for the limited amount of money made available to
them.
Depth of specialty independent physicians is shallow. The largest and most diverse
medical group is that of Dreyer Medical Group (Advocate Health System).
Threat of Substitution:
Substitution of services is high with many options available to to insured and cash
paying customers. Similar if not better services are available to the community if they
chose to use RCMC for their care.
13. Customers:
• According to the PMMC Community Health Needs Assessment Report, the
poverty status is at 13.9%. Currently, the US Census Bureau estimates the
poverty level to be at 14.4% and with anonymous internal sources stating that
the percentage is more like 15% plus. PMMC provides a considerable amount of
care to this demographic and the Emergency Department is the primary point of
care this demographic. This repeat group of nonpaying customers is
economically taxing on the system.
• RCMC has employed two key physician groups consisting of Fox Valley
Cardiology Consultants and two longtime Pulmonary Medicine physicians.
Competitors:
• Rush-Copley Medical Center
• Cadence Delnor Hospital
• Dreyer Medical Group
• Walgreens Pharmacy
• ATI Physical Therapy Services
14. Competitor Profile
Status/Type: Non for profit teaching hospital
Financial: Rated A+ by Moody’s Financial Services. Income/debt ratio is improved
even after the completion of the newly constructed medical facility in Chicago.
Services: RCMC announced that they will be investing in a$52.7 million dollar
renovation and expansion project that will be completed in 2018.
Effective Market: RCMC provides services primarily to Kendall County and the city of
Aurora. Other cities that benefit are Plainfield and Naperville.
Technology: It has been a a key tactic for their strategy is to maintain a strong
technology foundation.
15. Competitor Summary
RUMC/RCMC
Asset Summary 2014 March 31, 2014
Cash and Cash Equivalents $ 190.2
Fixed Income Securities $ 500.0
Equity Securities, U.S. and
International
$105.4
World Asset Allocation Mutual
Funds
$69.9
Moderate
Allocation(Balanced) Mutual
Funds
$49.9
Unrestricted Endowment $50.9
TOTAL $966.3 (millions)
16. SWOT
Strength – Long-time history and commitment to the community. Recent leadership has
shown initiative to change and pursue long term goals.
Weakness – Payer mix is poor and revenue streams are limited as competition for market
share has become more intense with RCMC.
Opportunities – There are 8 MUA’s that are within PMMC’s areas and these areas could
Improve revenue streams.
Threats – RCMC could continue to expand into territory that was once traditionally
dominated by PMMC and completely lose there market share.
17. Key Drivers
The ACA is mandating policy and compliance with best practices as well as
communication and data retrieval.
Technology and digital platforms are dominating the healthcare landscape.
Expanding services and aligning with other groups and organizations are leaving very
little room for smaller competitors.
18. Strategy
Phase one
• Critical Success Factors
Controlling Costs:
• Establish a list of potential vendors for data
analytics and healthcare ERP vendors.
Existing software and hardware is dated and
a uniform upgrade needs to be implemented
to the most productive facilities first, such as
PMMC. The goal is to implement one
integrated system to improve accounting
procedures, billing accuracy, data storage
capability, and improved real time
communication.
• Integration of ERP with existing and
expanding LEAN /RIE processes.
• Customer Relationship Management
• Develop the Presence Medical Group:
• Conflict of interest is present with
maintaining relationships with
independent physicians who are
technically employees of rival
healthcare systems, principally, Rush-
Copley and Dreyer Advocate.
– Strategically eliminate and
minimize the relationships with
physicians who do not refer their
patients to PMMC for services.
– Retain and employ services of
independent physician’ that
specialize in the following areas.
• Cardiac
• Renal
• Interventional Radiology
• Obstetrics and Gynecology
• Primary Care Services
19. Sustainability and Expansion:
Phase Two
• RCMC made a strategic move to build and operate a freestanding
hospital while only providing emergency services. This action also
translated to them being the only hospital facility in Kendall County.
As population continues to grow this population base will seek out
their medical services at RCMC.
• PMMC needs to open one walk in care clinic in Kendall County to
obtain some of this market share and another clinic west of Sugar
Grove, IL to serve the rural communities that do not have easy
access to hospital services.
20. Strategy Phase TWO cont.
• PMMC needs to establish a facility on the western part of the I-
88 corridor west of DeKalb, IL to provide services that can be
performed at PMMC. Significant portions of cardiac thoracic
surgical procedures are being performed on individuals from
the Sterling, Illinois area.
Rural Communities face the burden of not having access to
healthcare services, let alone quality healthcare services.
• The strategic placement of a small facility with an available
transport team that can transfer patients to PMMC will help
increase visibility within the community and assist in capturing
more of the market. A transport team is already in place at
PMMC but it is under utilized because service area needs to be
expanded
