Business for a Physical Therapy Centre - Case Study Example

Physical Therapy Clinic – Web-based Networking Contents 1. Executive Summary 3 2. Introduction to the Project and its Objectives 4 3. Strategic Context and Relevant Background Information 6 4. Market Analysis 11 5. Identifying Appropriate Options and Option Appraisal 14 6. Preferred or Recommended Option 16 7. Health Care Funding in the United States 17 8. References 20 Executive Summary This paper will present a business case for a Physical therapy centre. Kennedy Brothers Physical Therapy is one of Boston’s premier sports medicine rehabilitation centers. The clinic specializes in treatment for a series of injuries, namely spine, shoulder, elbow, wrist, hand, knee, foot and ankle. Kennedy Brothers currently own and operate five clinics in the greater Boston area. At any point in time, the clinic is visited by athletes and non-athletes aged between 9 and 90. The business case will present a proposal for networking the five Kennedy Brothers clinics in Boston, using a Web-based Portal system, with an aim to improve communications, share and manage data, increase security and privacy of patient information and co-ordinate and rotate staff members within the five clinics. This business case will detail every aspect of the proposal such as, strategic context, market analysis, SWOT analysis, stakeholder analysis, options appraisal, benefits list with weightings, cost benefit and benefit cost analysis, details regarding preferred option and detailed project management, evaluation and timelines. The final section of the paper will also contain a short summary on how health care funding is being done in the United States of America. Part 1 1. Introduction to the Project and its Objectives 1.1. Project Description Kennedy Brothers Physical Therapy is one of Boston’s premier sports medicine rehabilitation centres. Kennedy Brothers Physical Therapy was the dream of Jake and Richard Kennedy, whose goal was to open and operate a sports medicine rehabilitation centre, with state of the art equipment and most up to date scientific treatment available. In 1991, they founded Kennedy Brothers Physical Therapy, with the single vision and aim of providing the highest quality treatment for sports and orthopedic injuries, within a highly sophisticated health care system. The clinic specializes in treatment for a series of injuries, namely spine, shoulder, elbow, wrist, hand, knee, foot and ankle. Kennedy Brothers currently own and operate five clinics in the greater Boston area. At any point in time, the clinic is visited by athletes and non-athletes aged between 9 and 90. Despite Kennedy Brothers being a privately owned chain of clinics, it has close tie ups with leading surgeons and hospitals in Boston. Some of the hospitals they have close working relationships with include, Brigham and Women’s Hospital, Massachusetts General, New England Medical Center, New England Baptist Hospital, Children’s Hospital, Beth Israel Hospital, Saint Elizabeth’s Hospital, Newton Wellesley Hospital and Mount Auburn Hospital. This close working relationship enables the therapists in the clinic to consult referring physicians in these hospitals, and this in turn ensures that the best possible diagnosis, treatment and health care is available to patients (Kennedy Brothers Physical Therapy, Online). Currently, the five clinics that the Kennedy Brothers own are connected only through phone. Co-ordination, communication etc., are all done through phone. This has resulted in many communication and co-ordination errors in many aspects of clinical practice. To resolve this issue, networking the five offices is advisable. This networking can be done either by means of customized software or through a web-based portal. 1.2. Objectives The primary objectives of this proposal are: To improve communication and connectivity between the five clinics so as to prevent increased phone usage and miscommunication To enable data sharing between clinics to facilitate sharing of patient data and cases, information on treatments etc. To facilitate easy data management and increased security of patient information. To co-ordinate staff and other services between clinics to facilitate greater customer satisfaction. To ensure that all data about the organization such as number of patients, individual clinic turnover, facilities required, feedback etc., is readily available to the management and stakeholders. To increase overall service efficiency and to enable increased customer satisfaction. A network is a collection or set of computers or hardware devices, connected together either physically or logically. Networking is the term that is used to describe the process of designing, implementing, upgrading, managing and in general working with networks and networking technology (Kozierok, 2005, p 6). Networking the five clinics of Kennedy Brothers Physical Therapy will ensure that effective communication takes place, thereby reducing phone usage. Each member of staff will be able to sign into the network with a personal identity and password. This will enable them to access and share information, feed in patient information into the network; enter clinic information for the management and co-ordinate with the other clinics. Co-ordination with other clinics will facilitate rotation of staff, namely, therapists and assistant therapists according to the need of customers in each clinic. Certain clinics may require certain specialists, who may not be available at the time of need. Networking all five clinics will enable the management to rotate and bring in therapists from other branches to satisfy the customer. This sort of personalized efforts on the part of the clinic will ensure customer satisfaction and consequently increase the number of footfalls. 2. Strategic Context and Relevant Background Information 2.1. Current Organizational Needs The primary objectives of the company are to provide cutting edge health care services with the latest scientific technology and achieve increased customer satisfaction. The basic underlying belief of the organization is to ensure the well-being of the patients, by placing their needs above everything else. The therapy clinic is also governed by the rules and regulations set by the United States Department of Health and Human Services (HHS), whose main objective is to protect the civil rights of citizens. The OCR puts forth regulations regarding civil rights, privacy rights and safety of patients with a view of safeguarding them. The Civil Rights regulation aims to protect citizens from discrimination based on race, religion, gender, colour, origin etc. The Privacy Act’s main objective is to protect patient information and the Patient Safety Act aims to resolve patient health care issues (HHS, Online). Kennedy Brothers Therapy Clinic has certain policies and strategies to implement its objectives. Careful staff selection is the primary strategy. Kennedy Brothers ensures that the staff members they employ are well-trained and qualified. The therapists at the clinic go through a series of examinations and educational tests, conducted by the American Physical Therapy Association and get certifies as Sports Specialists (SCS). Other staff members are certified Strength and Conditioning Specialists (CSCS). Apart from this all staff members attend monthly educational meetings. Kennedy Brother Clinic makes sure that its members are all well-qualified in order to meet the standards set by the HHS. Additionally in order to ensure customer satisfaction, state of the art equipment and latest scientific methods are used to treat patients. Furthermore, in order to follow the regulations set by the Privacy Act, the clinic has its own privacy policy, assuring the clients that their information and all details concerning them will be kept private and safeguarded. The detailed policy statement also contains the rights of patients with respect to maintaining confidentiality. Networking the five clinics will only add to and strengthen the existing objectives, beliefs, policies and targets of the company. Since the benefits of networking include better communication, reduced phone usage and miscommunication, easier co-ordination, managing information, increased security with reference to patient information and increase of overall efficiency, it would be the most viable option, which would in turn support company policy and beliefs. Reduced miscommunication, increased co-ordination, better information management etc., will all directly and indirectly contribute towards better service provision, which will consequently result in increased customer satisfaction. 2.2. Background Information Currently Kennedy Brothers Physical Therapy clinics provide treatment for a series of injuries to shoulder, spine, elbow, arm, writs, hip, knee, ankle and foot. They have ten main therapists on their staff list who are in charge of providing treatment to their patients. They also have a number of assistant therapists on board, to help the senior therapists to cope with and manage the number of patients visiting the clinic each day. The Physical Therapists look to the major treatments and do the primary consulting, while the Assistant Therapists cater to a smaller level of consulting and are in charge of all the tests and reviews for patients. They report to the Physical Therapists. The average length of stay of each patient ranges between 3 months to a year or more depending on the extent of damage and the level of treatment to be provided. Each sitting takes close to two hours and the clinic is filled with patients from morning to night each coming in for their sessions. The patients from children to adults, from athletes to non-athletes. There are five clinics in Boston greater area, namely in Downtown Crossing, Copley Square, Needham, Braintree and Watertown all of which are currently connected only through phones. 2.3 Stakeholder Analysis Any group or individual who can affect or is affected by a firm’s performance, the decisions it takes, and its achievement of its objectives is a stakeholder (iSix Sigma, 2003). PWASET (2008, Vol. 34) defines Stakeholder Analysis as a “method of systematically gathering and analyzing data on stakeholders (individuals, groups and organizations) in order to identify stakeholders and the key actors in a system, assess their respective interests (stakes), and predict the potential to influence policy development and implementation.” The Stakeholder Analysis assists in identifying who the key players are in the business and which other players have to convinced and won over in order to benefit the business. The first step of the stakeholder analysis is to identify who the stakeholders are. Kennedy Brothers Physical Therapy clinic has five key stakeholders, with varying levels of interest and influence in the organization. The five stakeholders include, Physical Therapy Patients, Surgeons and Physicians, Hospitals and Private Clinics, Insurance Providers, Technical Providers. Each of these stakeholders holds a certain amount of influence and interest in the actions of the organization. The following stakeholder analysis map will highlight the levels of influence and interest each of them have. Technical Providers are the primary stakeholders since they are high power, high interest people. They provide all the technical equipment and services to the clinics and most often are very influential when the organization makes decisions to invest in new technical equipment. The organization is heavily dependent on technical support for all its activities. Physical therapy patients come next. They have high power and low interest levels. The organization is heavily dependent on their inflow. Through their feedback and the government regulations protection they have, patients wield the greatest amount of power over the organization, next to technical support. Insurance providers are people with medium power and low interest in the organization. They operate closely with patients and the clinic, with reference to financial parameters. They have a certain level of power as they deal with the payment part of the process. Their interest levels are medium as they get business through patients through insurance policies. Surgeons and Physicians are medium power and medium interest stakeholders. Physical Therapists and assistant therapists are dependent on surgeons and physicians for consultation from time to time regarding patient cases. Maintaining goodwill with them is of considerable importance. Hence they have medium power over the actions and decisions of the organization. Similarly, they also have vested interests in the organization as it benefits them to be tied up with the clinic. Hence they have medium interest. Hospitals are low power, low interest stakeholders. While a mutual working relationship exists between the hospital and the therapy clinic, both interest and power levels are significantly low. All the above stakeholders will give a positive response to the proposal of networking the office because of the number of benefits it offers. Technical support, being the primary stakeholder, has to be managed closely. Greatest amount of effort must be made in order to win them over. Physical Therapy patients will have to be kept satisfied. They must be reassured of the benefits of networking and must be assured of maintaining privacy regarding their personal details. Insurance providers and Surgeons and physicians will be much easier to convince and win over. Lastly, but by no means least, it is important to convince the company staff of the importance of this proposal. They should be given a detailed explanation regarding the benefits it holds. Actively involving all the important stakeholders in designing and executing the proposal could be the key factor in winning them over to support this idea of networking the five clinics of Kennedy Brothers Physical Therapy. 3. Market Analysis 3.1. Potential Demand Market demand for physical therapy and the healthcare offered in it is growing. The increasing pressure to excel in sports among youngsters, and awareness about a correct training regime for sports and the general increase in physical activities has resulted in a lot of injuries. This in turn has given rise to an increase in the need for physical therapists. Additionally with people becoming more and more health conscious and with the realization of the importance of exercise, middle aged athletic population is also on the rise (Jeter, L, 2005). Chris Bourn in Jeter (2005), who is the director of in-patient rehabilitation services at St. Dominic Health Services, is of the view that, apart from working with patients when they get injured, he says that they also condition them to maintain lifelong wellness. He also says that integrating the concept of wellness for people suffering from injuries is one of the causes for an increasing market demand for physical therapy. According to the American Physical Therapy Association, there is an estimated 71,780 full time physical therapists and 18,430 part time therapists in the United States alone. However, the demand for physical therapists exceeds the available supply of therapists by 11,790 (ProTrax, 1994-2009). 3.2. Competitors Providing the Service The physical therapy market has been in existence for many years. Currently it is a growing market which has seen and is still seeing enormous progress and development. The market already has a few well established players who all offer more or less similar healthcare and rehabilitation services to their patients. The other key players in the market include, Select Medical Corporation, Concentra Inc., Kindred Healthcare, Inc. and Genesis HealthCare Corporation. All these players have a significant market share in the physical therapy services market in the United States (IBIS World, 2009). Apart from these key players there are many other upcoming players trying to meet the increasing demand for good physical therapy services. Hence it can be said that there is a significant level of competition and specialized strategies and extra efforts from the organization is required to manage the existing competition and gain considerable market share and goodwill from available and future clients. 3.3. SWOT Analysis SWOT Analysis is a strategic planning method that is used to assess the Strengths, Weakness, Opportunities and Threats of a business venture or proposal. It is often used in businesses to ascertain the areas of vulnerability and to identify the areas of opportunity (Komarinski, 2005, p 121). It helps recognize the positive and negative aspects of the business (Stone, 2001, p 24). Lastly it works well because it matches the strengths of the organization’s internal environment with the opportunities in the organization’s external environment and helps identify its primary capability (King, 2003, p 17). Strengths Highly skilled and qualified physical therapists and assistant therapists in the staff High quality physical therapy treatment with state of the art equipment and latest scientific technology Five different clinics to cater to growing demand Experienced office staff to manage the other aspects of the business Weaknesses Limited staff members to match the growing demand Increased waiting time per patient Lack of precise communication within the five clinics Opportunities Large Client base Increased goodwill among clients Potential to improve communication and co-ordinate staff members to meet growing demand Scope for better data management and increased security of organization information Threats Multiple competitors, each with a significant market share Insufficient exposure to modern methods of networking and communication Unwillingness by some stakeholders to change 3.4. Suggestion of SWOT Analysis with regards to the Proposal From the SWOT Analysis it can be said that the proposal to network the five clinics of Kennedy Brothers Physical Therapy would be most advantageous. There is large potential to better communications between the clinics. This would only contribute to the overall efficiency of the clinics. Coordinating and rotating staff members can also be done easily, in accordance with the needs of the clients. Data management and data privacy can be handled better. There is greater scope to reduce the waiting time of patients and this in turn will result in increased footfall and customer satisfaction. Easy recruitment of new staff is also possible with the help of a networked system in the organization. 4. Identifying Appropriate Options and Option Appraisal 4.1. Potential Approaches to Address the Issues A brief description and listing of the available options to network the five clinics of Kennedy Brothers Physical Therapy is essential to choose the appropriate option. Options Title Description Option 1 Do Nothing Maintain the current communication system using phone Option 2 Web-Based Portal Solution Cost is medium with high customization Option 3 Off the Shelf SAP Software Cost is high with reasonable customization Option 4 Customized SAP Software Cost is high with high customization 4.2. Option Assessment Criteria There are certain criteria that the options must satisfy, in order to come to a decision about the most appropriate option. These criteria are heavily based on the objectives of the proposal. The assessment criteria for this networking proposal includes, effective communication, data sharing, data management, security of patient information and co-ordination of staff members among the five clinics. The option must contribute towards effective communication, easy sharing of all data, easy management of available data, high security to ensure privacy of patient information and better coordination among staff members to enable rotation based on the needs of the client in each of the five locations. If all of these criteria are met by any of the options, then it will be the most appropriate option for the proposal. Since Option 1 which is Do Nothing and does not match any of the above criteria it is being discarded and will not be considered in the Option analysis section of the Business case. The decision regarding the best option will be made by the stakeholders of the organization and the management after thorough examination of the costs and the cost benefit and benefit cost analysis. 4.3. Options and Benefits Analysis Option 1 Web-based Portal Option 2 Off the shelf SAP software Option 3 Customized SAP software Benefit criteria weights Score Weight X Score Score Weight X Score Score Weight X Score Communication 30 10 300 10 300 9 270 Data Sharing 20 8 160 6 120 10 200 Data Management 15 12 180 4 60 10 150 Security and Privacy 15 6 90 8 120 6 90 Co-ordination 10 8 80 6 60 5 50 Totals 100 810 660 760 4.3. Cost of Options Description US Dollars Option 1 $175,000 Option 2 $350,000 Option 3 $500,000 4.4. Cost Benefit Analysis Cost Benefit Analysis, “estimates and totals up the equivalent money value of the benefits and costs to the community of projects to establish whether they are worthwhile” (Watkins, Online). It is a method commonly used to examine and evaluate public policies (Nas, 1996, p 4) (MindTools, online). Option 1 Option 2 Option 3 Benefit 810 660 760 Cost 175,000 350,000 500,000 Cost/benefit 216.05 530.3 657.9 Benefit/cost 0.0046 0.0001 0.0015 5. Preferred or Recommended Option 5.1. Title of Preferred or Recommended Option From the Option analysis and the Cost benefit analysis it can be concluded that the most feasible option for implementing the networking proposal would be Option 1, i.e., a Web-based Portal, that will ensure better communication, cut down on phone costs, enable data sharing and management, ensure privacy and security and co-ordinate staff members. Option 1 provides the greatest value for the amount on money spent at $216.05, when compared to Option 2 and 3 which stand at $530.3 and $657.9 respectively. Hence a Web-based portal to network the five clinics is the most viable, cost effective solution. The implementation of this solution will see 9% increase in the number of footfalls, i.e., the number of patients visiting the clinic. Increased coordination of staff members will give room for rotation of staff members. Implementation will ensure that the primary objectives are realized within the context of beliefs and strategies of the organization. 5.2. Project Management Arrangement and Timelines Role of Project Sponsor – Managing budget and allocation of funds at each stage, review of the project progress at major milestones and project course correction when required. Role of Project Manager – Responsible for overseeing the project according to schedule, implementing the plan at each stage, coordinating resources and project risk mitigation and contingency planning. Project Timeline Quarter 1 (January – March): Evaluation and Feasibility of project Quarter 2 (April – June): Narrowing down of Selections Quarter 3 (July – September): Select Vendor and Initiate Contract Quarter 4 (October – December): Begin Implementation and Testing Part 2 Health Care Funding in the United States The health care segment in the United States is highly varied and is a mixture of public and private funding. The total public spending on healthcare is about 45.9% and private funding is about 54%. In 2002, public spending on health care came up to 6.8% of the United States’ GDP. Therefore, Americans spend about 15% of their national wealth on health care, both public and private funding put together (Le Goff, P, 2005). However the American healthcare system is extremely complex to govern and fund. A study conducted in 2003 revealed that the administrative costs paid by insurers, employers and health care providers was almost 24% of all the health care expenditures put together (Woolhandler, S and Campbell, T and Himmelstein, D U, 2003). Seventy two percent of the population, roughly 200 million people in America have private insurance. Out of this 177 million receive their insurance coverage through their employers. A majority of the employers pay for most of their employees’ health care insurance. But most individuals have very little incentive to economize apart from their co-payments and deductibles. In recent years employers have become more aware of the high cost of health benefits and so have taken to introducing managed care. Managed care is where a third part payer and provider are integrated to provide funding. Recent innovations such as the Defined Contributions Plan and Medical Savings Account etc., have been introduced with a view to encourage consumers to take decisions regarding their health coverage and also provide them incentives to use the provided service wisely. This is because in practice many consumers are unable to actively seek out health coverage plans that will suit them (Health Policy Consensus Group). However those who wish to extend their health care services are entitled to enroll in private insurance plan and pay higher premium. The United States government provides a generous tax benefit worth more than $130 billion a year for those who are covered by health insurance (Bodenheimer and Grumbach, 1992). However low paid workers, whose employers do not provide insurance as a workplace benefit find it difficult to obtain other means of health cover and hence are unable to avail of the tax saving benefits (Arrow, 1963). In order to combat this condition, a strong safety net is which assures of access to hospital and health care facilities are available for everyone irrespective of their inability to pay for the healthcare expenses. Private, non-profit organizations and community based health centers provide high quality and cost effective medical services, both primary and preventive to the uninsured and medically underprivileged in a comprehensive way. Patient cost sharing is means tested on a fee scale according to the income of the patient availing of this type of health care funding. More than 11 million Americans use this safety net as an option in times of need (Turner, 2002). Apart from this the government has many programs and grants that funds healthcare. Federal grants, Medicaid and Medicare payments, state and local grants, private insurance payments, patient fees, foundation grants, and private donations fund community health centers etc are some of the funding systems offered by the government (Stone, 2000). The state of Massachusetts offers a Medicaid program for low income people under the age of 65, living in the state of Massachusetts and not in a nursing home or any other long term care facility. This program aids the low income group by offering them health care benefits, which directly or partly or fully pay their insurance premiums (United States Government). While the poor are eligible to get the benefits of the Medicaid program, separate tax payer systems are available for poor children, namely, SCHIP and the elderly which is Medicare. Recipients of the benefits of these health funding programs are eligible to receive outpatient care and hospital care from the same physicians and medical professionals, who provide outpatient and hospital care to patients who possess private insurance. There are several people in the United States who are in favour of adopting a universal public health care system. This would be the best option because the savings obtained from this will gives room and allowance for health coverage to be extended to all American citizens, 40 million of whom do not have any form of medical coverage. Public as well as Private sector providers in the United States, generally offer high quality and standard of care as they are subject to selection by insurance companies and providers. The American health care segment does not have one specific quality control department. Instead it depends on a combination of public and private entities and committees such as National Committee for Quality Assurance, Agency for Healthcare research and Quality and Joint Commission for Accreditation of Healthcare Organizations. United States health care is the most expensive in the world. The only way to bring down this level of expenditure is to rely universally on public schemes to enable coverage for all citizens and also cut down on spending substantially. References Arrow, K (1963). Uncertainty and the Welfare Economics of Medical Care. The American Economic Review, Vol LIII, No. 5 Bodenheimer, T. and Grumbach, K (1992). Financing Universal Health Insurance: Taxes, Premiums and the Lessons of Social Insurance. Journal of Health Politics, Policy and Law, Vol. 17, No.3, pp. 439-462. Health Policy Consensus Group. Options for Health care Funding. Civitas. Retrieved June 12, 2009. http://www.civitas.org.uk/pdf/hpcgSystems.pdf IBIS World (2009). 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