Running head: EXTERNAL AND INTERNAL ANALYSIS
Phase Two: External and Internal Analysis
Team Name
HSA4938
Palm Beach State College
1
EXTERNAL AND INTERNAL ANALYSIS
2
External Analysis
Issue Map
Categories of Issue
Issue Map
General
Health Care SystemEnvironmentUnited States
United States
Service AreaGadsden, AL
Economic
In 2018, education
funding increased in
three states, allowing
teachers to get a pay
raise (Kidd, 2019).
In 2019, U.S.
increases tariffs on
Chinese imports
(Weijian, 2019).
In 2019, the
employment rate in
the U.S. increased by
61 percent (Trading
Economics, 2019).
U.S. stocks fluctuate
as trade war fears
intensify (Weijian,
2019).
Several states are
suing U.S.
government over the
loosening of federal
regulations for the
Environmental
Protection Agency
(EPA) (Kidd, 2019).
Healthcare costs
continue to rise with
medical
goods/services and
higher Medicaid costs
being the main
culprits (Vogenberg,
2019).
Company mergers
begin to rise as
pressure to optimize
healthcare delivery
intensifies
(Vogenberg, 2019).
Motus Integrated
Technologies built
new manufacturing
facility and created
90 jobs (Business
Facilities, 2019).
Median household
income in Gadsden is
$30,925, a 1.41%
growth from the year
before (DataUSA,
n.d.).
84.8% of the
population of
Gadsden has health
coverage (DataUSA,
n.d.).
HIPAA violations and
data breaches
continue to rise
resulting to recordUninsured citizens
setting fines and
have declined by
settlements
6.25% from 16.2% to
(Vogenberg, 2019).
15.2% (DataUSA,
n.d.).
In 2019, the drug
market has expanded
and is expected to
bring in more than $1
billion in sales by
2025 (Vogenberg,
2019).
EXTERNAL AND INTERNAL ANALYSIS
Social/Demographic
3
The old-age
The aging population
The Gadsden, AL
dependency ratio is in the U.S. is putting a
population is
expected to rise to
greater demand on the currently at 35,832, a
about three and a half
health care system
1.11% decline
working-age adults to
when it comes to
(DataUSA, n.d.).
every retirement aged
level of care.
person by year 2020
(U.S. Census Bureau,
2018).
The ethnic
composition of the
population is
composed of 20,200
white residents,
12,400 black
residents, 2,160
Hispanic residents,
324 Asian residents,
105 American Indian
residents, and 53
other/mixed residents
(DataUSA, n.d.).
The non-Hispanic,
White population is
projected to shrink in
the coming decades
from 199 million in
2020, to 179 million
in 2060 (U.S. Census
Bureau, 2018).
Legislative/Political
The United States is
divided politically.
There is a border
crisis going on with
the current sitting
president demanding
funding to build a
wall on the Mexico
border (Williams,
2019).
States have adopted
new strategies
relating to the
accessibility,
coverage and
regulation of
substance use
treatment programs
and facilities (NCSL,
2019).
Health insurance
coverage and
affordability is still a
top concern across the
healthcare industry
(NCSL, 2019).
Alabama passed a
bill deeming it illegal
for firms to pay
different wages based
on race or sex
(Lyman, 2019).
Alabama legislature
approved a bill that
requires public
colleges to develop,
adopt, and enforce a
policy on free
expression (Lyman,
2019).
Technological
Drones are now being
utilized in delivery
companies such as
Technology has
allowed organizations
such as the World
Health Organization
Medical centers in
the Gadsden area
offer services that
EXTERNAL AND INTERNAL ANALYSIS
UPS (Premack,
2019).
Artificial Intelligence
is becoming
advanced and being
implemented in many
organizations.
4
(WHO), to create
massive databases
that holds a massive
amount of
information
(Healthcare IT, n.d.).
utilize advanced
methods of
technology.
Telehealth is a new
technology that helps
improves efficiency
of communication
between healthcare
provides, clinics, and
patients (Scherman,
2019).
Competitive
The United States is
losing ground on the
global scale when it
comes to
competitiveness but
still ranks 2nd on the
innovation capability
pillar (Bains, 2019).
Healthcare
organizations are
participating in
mergers with other
organizations
increasing the
competitive
environment in their
location.
In the Gadsden area,
there are multiple
hospitals and clinics
that offer
products/services
over one another thus
creating a highly
competitive
environment.
Validation of the Strategic Assumptions
Performance and general environment trend/issues. The trends and issues that have
adversely affected Riverview Regional Medical Center are mainly due to their close industry
competitors. The medical center is constantly trying to retain and gain patients, but it is
constantly getting overshadowed by competing hospitals such as: Gadsden Regional Medical
EXTERNAL AND INTERNAL ANALYSIS
5
Center and Mountain View Hospital who both offer resources and services that Riverview does
not.
Performance and health care system trends/issues. Riverview Medical Center is
passionate about the level of care that they give to their community. Currently, the medical
center is working to find new, innovative ways to improve their operations. One issue that is
affecting their performance is the lack of specially trained doctors for their Intensive Care Unit
(ICU) (The Leapfrog Group, n.d.). As one of the most important parts of the hospital, the ICU
requires specialized doctors who have advanced training in intensive or critical care. Currently,
Riverview is lacking in that area and it has caused their performance level to decrease.
Performance and service area trends/issues. The service area surrounding Riverview
Medical Center is made up of mostly women with gap being 7.98% (DataUSA, n.d.). As the
population continues to grow, women will be in a higher demand for obstetrics services that
Riverview does not provide. The women of the population are encouraged to go to other medical
centers that provide those services and therefore are getting their full-service care from those
organizations. This is adversely affecting Riverview because not only are they losing clientele,
they are missing out on potential gains in revenue.
Effect of new technology developments. Currently, advances in technology in the
healthcare system is at an all-time high. New surgical robotic machinery allows surgeons to be
more precise, many healthcare organizations have implemented electronic medical records to
allow easier access to patient information, telemedicine is now available to patients in most
states, and many organizations are now working under a cloud-based system that allow patients
to view their records outside of the facility (Healthcare Business Tech, n.d.). Riverview offers
state-of-the-art heart care through the use of advanced technology that allows them to properly
EXTERNAL AND INTERNAL ANALYSIS
6
diagnose and treat their patients (RRMC, n.d.). They are constantly searching for new ways to
adapt to the everchanging technological advances in the health care industry. That being said,
Riverview is limited to the amount of technology that they use due to the limited number of
services that they provide. They do not provide virtual care (telemedicine) to their patients which
can be a disadvantage for them because the virtual care industry is expected to bring in
accelerated growth over the next year (Roth, 2019). Many individuals are open to trying out
virtual care and Riverview would benefit greatly if they were to add on this service. Not only
would patients have access to their physicians outside of the hospital, they can be provided with
other options to improve their overall health.
Legislative/Political environment changes. Politically, the United States is very much
so divided. A big problem that has been ongoing since the last election is healthcare reform,
which has each side up in arms about which route to take. The Trump administration has been
working hard to repeal and replace the Affordable Care Act (ACA) but so far have been
unsuccessful in finding a new plan. However, recently President Trump signed an executive
order that requires the Department of Health and Human Services (HHS) to create regulations
that will encourage Medicare Advantage plans to offer new services and benefits. The proposals
that HHS is supposed to develop include: expanding access to Medicare medical savings
accounts, allowing plans to offer access to telehealth services, change the payment model to
allow beneficiaries to receive savings or rebates for high-quality care, and so on (Health Markets,
2019).
Effect of new local, state, or federal regulations/laws. Many hospitals are struggling
financially due to low reimbursement rates. With this problem being a concern for states such as
Alabama with the majority of their hospitals operating in the red, the Centers for Medicare and
EXTERNAL AND INTERNAL ANALYSIS
7
Medicaid Services (CMS) recently announced that the federal government will grant more funds
to hospitals who are operating in the bottom 25% of the country (Bryan, 2019). Alabama has
more hospitals in the bottom 25% than any other state in the country so this is a big deal for the
state. By doing this, Riverview Regional Medical Center will benefit some from this new
regulation and could potentially gain back the funds to re-build their Women’s Pavilion and gain
more clients.
New economic issues. Currently, tariffs and talks of a trade war with China is a growing
concern in the U.S. Placing high tariffs on goods coming from China not only would affect
companies who import goods from that country, it would affect the healthcare industry as many
healthcare products are imported from China. The U.S. Medtech company experienced about
$836 million in tariffs when the Trump administration first implemented them (Perriello, 2019).
A lot of medical supplies (MRI machines, X-ray machines, surgical instruments, etc.) are coming
in from China every year and with the new tariffs being put into place, the price for medical
equipment will increase by roughly $400 million nationwide (Varas & Hayes, 2018). These costs
will affect certain hospitals and could lead to managed care problems that will impact patients
without insurance.
Service Area Structural Analysis
Five Forces
Threat of New
Entrants
Service Area Structural Analysis
Forces Driving Service Area
Conclusion
Competition
There are several medical centers
High. The threat of new
within a 10-mile radius that, based on entrants is likely to stay high
the services they provide, have a
as the competing medical
competitive advantage over
centers are continuing to
Riverview Medical Center. Two of
service more patients and
those medical centers offer services
population and the economy
that Riverview does not and
of Gadsden, AL is no longer
ultimately takes on new patients that increasing at a steady rate.
Riverview could have had if they
offered those same services.
EXTERNAL AND INTERNAL ANALYSIS
Intensity of Rivalry
Services that are provided at the
competing medical centers have them
utilizing techniques such as process
innovation to improve the way they
are delivering services and creating
strategies to set themselves apart
from the rest.
Threat of substitutes The threat of substitutes as it pertains
to services provided is high due to the
centers retaining their patients
through patient satisfaction.
Bargaining Power of The bargaining power of the patients
Buyers (Customers) is high in regards to The Emergency
Medical Treatment and Labor Act
(EMTALA) and government health
care programs that requires patients
to receive treatment. However, the
power of choice can be limited due to
managed care restrictions.
Bargaining Power of Bargaining power of suppliers is high
Suppliers
due to new technologies that can
improve the efficiency of care
provided.
Depending on the managed care
contracts for reimbursement for the
physicians in the medical centers, the
amount of quality care given by
physicians can be affected.
8
High. Rivalry is likely to
remain intense as the
competitors are providing
diverse services, creating
more strategies, and bringing
in more patients.
High. Patients will continue to
frequent the competing
centers due to services
provided.
Medium. Patients have the
ability to demand coverage
but at times certain managed
care plans can dictate the kind
of service they will receive.
High. Due to the types of
services provided that require
upgraded technology and the
reimbursement level that
dictates the quality of care
that is given.
Internal Analysis
The Value Chain
Service Delivery.
Pre-service. Riverview Regional Medical Center has been operating within Gadsden,
Alabama, since 1917 (About Us, 2019). Throughout the years of its operation, Riverview
Regional has managed to be consistently ranked as one of the top hospitals in the Gadsden Area
along with high patient satisfaction scores and accreditations (About Us, 2019) Riverview
Regional Medical Center primarily provides services for specialized care and complimentary
services and programs. These services and programs include Wound Care, a Hyperbaric Center,
EXTERNAL AND INTERNAL ANALYSIS
9
a Heart and Vascular Center, a Sleep Lab and an Imaging Center (About Us, 2019). To help
service their patients Riverview Regional offers patients the ability to expedite their admission
process by offering the option to complete pre-registration online or over the phone (Your
Hospital Visit , 2019). This service not only helps patients to skip certain steps upon arrival, but
it also helps the hospital to service more patients quickly and efficiently. In addition, RRMC
offers patients access to an online portal, MyChart by Prime Healthcare, where they can view
their medical records (My Chart Patient Portal, 2019). This online portal gives patients the ability
to review their health summary, lab results, pay bills online, view their account summary and
view MyChart accounts from other facilities while storing all their health information in one
location (My Chart Patient Portal, 2019).
After service. Riverview Regional has become a large staple in their community, who
takes pride in offering help to those who need it. After a patient is discharged from Riverview
Regional Medical Center, they are given the option of speaking with social workers, physicians,
and the resource management department for guidance (Your Hospital Visit , 2019). If a phone
call is not sufficing, they also offer a variety of healthcare assessments ranging from Alcohol use
to Type 2 Diabetes. These free health assessments will provide patients with personalized,
confidential information that will help them to take preventive steps to prevent illness (Health
Assessments, 2019). Community events and educational seminars are offered to give current,
past, and future patients tools and information to lead a healthier, long-lasting life. Additionally,
they provide access to Nutritional counseling and education and Corporate Wellness for
companies to help improve the health of their employees (Well Being Services, 2019). All these
combined allow for Riverview Regional Medical center to offer their patients all-around service
care
EXTERNAL AND INTERNAL ANALYSIS
10
Point of service. Although healthcare is a very profitable business, most organizations
hold the importance of providing quality care to patients as more of a priority instead of
monetary gain. As part of their service to the community, Riverview Regional Medical Center
provide financial assistance to those who are underinsured or uninsured (Financial Assistance ,
2019). Financial Counselors within this program work hard to help patients find solutions to help
them cover the cost of care that was provided. For patients insured, Riverview Regional has a list
of standard pricing on their website for the patients review (Financial Assistance , 2019).
Depending on the type of insurance the patient may have, these prices can vary when the actual
bill arrives. This also applies for those who are receiving Medicaid or Medicare. Designated staff
is assigned to these patients to help them understand their pricing and eligibility for these
programs.
Support activities.
Organizational culture. Organizational culture. Organizational culture is “shared values,
norms, artifacts, and assumptions that serve as a guide for behavior; made up of cognitive and
emotional cultures” (Peter M Ginter, 2018, p. 366). At Riverview Regional Medical Center, they
pride themselves on providing compassionate and quality care to their patients. This organization
values patient safety, medical excellence and customer service above all else (Mission and
Values, 2019). All staff does their part in ensuring patients feel welcomed, respected, and cared
for.
Organizational structure. Organizational structure refers to how a business is run and
operated. There are four different organizational structures, functional, divisional, matrix, and
combination. Riverview Regional Medical Center follows a combination structure. They utilize
both a functional and matrix structure. A functional structure is based on “primary activities or
EXTERNAL AND INTERNAL ANALYSIS
11
processes required for producing the product/service of the organization” (Peter M Ginter, 2018,
p. 370). In their leadership team, aside from their CEO, it is broken up into certain department
heads. Their leadership team consists of the Chief Medical Officer, Chief Nursing Officer, and
Chief Financial officer. The people within these positions are responsible for making the large
operational decisions of the organization (Usmani, 2019). Underneath those within the leadership
team are those within Human Resources, Administration, and Finance. They are responsible for
the decisions that affect both staff and patients regarding rules, policy, pricing, and treatment
(Usmani, 2019). Staff and department heads that operate within each of their departments, would
be considered in the last level of their organizational structure. They carry out the services
provided and provide Riverview Regional Medical Center patients with exceptional and quality
care.
Additionally, Riverview Regional Medical Center operates on a matrix structure. A
matrix structure is “an organization structure based on the organization’s projects or programs
where centralized functional specialists interact with and provide services to project or program
teams” (Peter M Ginter, 2018, p. 372). This structure applies because Riverview Regional
Medical Center specializes in emergency medicine and heart and vascular care. They also branch
off into over seven other departments like neurology, wound healing, orthopedic, and sleep care.
With so many departments and each one having a department head, this can lead to the confusion
that is often associated with matrix structures. This confusion is because “employees are often
confused on priorities and who is the boss” (Peter M Ginter, 2018, p. 372). However, it is still
properly managed because they utilize a combination structure to reinforce the roles and
procedures required.
EXTERNAL AND INTERNAL ANALYSIS
12
Strategic resources. Strategic resources “include financial, human, information systems,
and technological assets of the organization” (Peter M Ginter, 2018, p. 374). Riverview Regional
Medical Center utilizes many different advanced technologies to help deliver their services to
their patients. Some of these technological advances include a new 64 slice CT Scanner,
hyperbaric oxygen therapy, and the new Impella 2.5 procedure (Medical Services, 2019). All of
which aid doctors in effectively detecting and treating life-threatening illnesses, treating difficult
wounds that threaten lives, and providing those with intensive heart problems with a potential
solution. Their technological advances also allow the use of an online chart portal for their
patients. This makes it easier for patients to access pertinent information such as bills, lab results,
and patient history. Lastly, Riverview also offers a new way of taking MRIs for their patients
without enclosing them in traditional tunnels. This system is called the Hitachi Oasis™ 1.2T
scanner (Medical Services, 2019). This scanner has an open design, therefore allowing those who
suffer from anxiety when taking an MRI can still see their surroundings and loved ones if
necessary.
Organizational Strengths and Weaknesses
Value Chain
Component
Value-Creating Strength
Value-Reducing Weakness
Service Delivery
Pre-Service 1. Patient care for over 100
years of services and
providing high quality care
2. Phone Registration for
admission process.
3. Online portal for access to
record, bills, and lab results
1. Phone registration doesn’t
eliminate everything
required before checking
in.
EXTERNAL AND INTERNAL ANALYSIS
13
Point-of-Service 1. Financial assistance is
provided to those who can’t
afford to pay their health
bills.
2. Pricing is listed on the
website for patients to
review prior to admission.
After-Service 1. Free health care
assessment for a wide range
of life-threatening
conditions.
2. Classes and seminars to
teach patients about
nutritional and health
information.
3. Counseling provided to
those who may need
guidance through after care.
NONE
1. Classes and seminars are
not provided online and may
be difficult for certain
people to attend.
Support Activities
Culture 1. Providing
compassionate and quality
care to their patients.
2. High value placed on
patient safety, medical
excellence and customer
service.
Structure
1. Creating value for
customers through
function, division,
and matrix
Strategic Resources New Technological
advances.
Online portal.
NONE
1. Can cause confusion
for employees on who is in
charge.
1. Competitors may
offer more
advanced resources
in other areas such
as partnership,
EXTERNAL AND INTERNAL ANALYSIS
14
process, and
information.
Competitive Relevant Advantages and Disadvantages
Strengths
Is the Value
of the
Strength
High or
Low? (H/L)
Is the
strength
Rare?
(Y/N)
Is the
Strength
Easy or
Difficult to
Imitate?
(E/D)
Can the
strength be
Sustained?
(Y/N)
Implications
Service Delivery
-Pre-Service
1. Patient care for
over 100 years of
services and
providing high
quality care.
2. Phone
Registration for
admission process.
H
Y
D
Y
Long term
competitive
advantage
No
competitive
advantage
H
N
E
Y
1. Online portal for
access to record,
H
bills, and lab results
N
E
N
No competitive
advantage
N
D
Y
Threshold
condition
Service Delivery
-Point-of-Service
1. Financial
assistance is
provided to those
who can’t afford to
H
EXTERNAL AND INTERNAL ANALYSIS
15
pay their health
bills.
H
Y
E
Y
2.Pricing is listed
on the website for
patients to review
prior to admission
Long term
competitive
advantage
Service Delivery
-After-Service
1.Free health care
assessment for a
wide range of lifethreatening
conditions.
2.Classes and
seminars to teach
patients about
nutritional and
health information.
3. Counseling
provided to those
who may need
guidance through
after care.
Support Activities
-Culture
1. Providing
compassionate and
quality care to their
patients.
H
N
E
Y
No
competitive
advantage
No
competitive
advantage
H
N
E
Y
H
N
E
Y
H
N
D
Y
No competitive
advantage
Threshold
Condition
EXTERNAL AND INTERNAL ANALYSIS
2. High value
placed on patient
safety, medical
excellence and
customer service.
16
H
N
D
Y
Threshold
condition
H
Y
D
Y
Long term
Competitive
Advantage
H
N
D
Y
H
N
E
Y
Threshold
Condition
No Competitive
advantage
Support Activities
-Structure
1. Creating value
for customers
through
combination
structure, using
both functional and
matrix structures.
Support Activities
-Strategic
Resources
1. New
Technological
advances.
2. Online portal
EXTERNAL AND INTERNAL ANALYSIS
Weaknesses
17
Is the
Value of
the
Weakness
High or
Low?
(H/L)
Is the
Weakness
Common (Not
Rare) Among
Competitors?
(Y/N)
Is the
weakness
Easy or
Difficult to
Correct?
(E/D)
Can
Implications
competitors
Sustain their
Advantage?
(Y/N)
H
Y
E
Y
H
N
E
Y
Service Delivery
-Pre-Service
1. Phone registration
doesn’t eliminate
everything required
before checking in.
No competitive
disadvantage
Service Delivery
-Point-of-Service
NONE
Service Delivery
-After-Service
1. Classes and
seminars are
not provided
online and
may be
difficult for
certain people
to attend.
Support Activities
-Culture
NONE
Short term
competitive
disadvantage
EXTERNAL AND INTERNAL ANALYSIS
18
Support Activities
-Structure
Support Activities
-Strategic Resources
1. Competitors may
offer more advanced
resources in other
areas such as
partnership, process,
and information.
H
N
D
Y
No competitive
Disadvantage
Implications of the Competitive Advantages and Disadvantages
Competitive Relevant Strengths
1. Patient care for over 100 years of
services and providing high
quality care.
Strategic Implications
1. Brand recognition and history
2. Creating value for customers
through combination structure, using
both functional and matrix structures.
2. The combination of styles can
provide for a more coordinated system
with better communication.
Competitive Relevant Weaknesses
Strategic Implications
1. Competitors may offer more
advanced resources in other areas such
as partnership, process, and information.
1. May start receiving less amount of
patient because of lack of
competitive resources.
EXTERNAL AND INTERNAL ANALYSIS
19
Directional Strategies
Organization’s Mission Statement
At Riverview Regional Medical Center, we know the value of all human life is guided
by our commitment to excellence and quality of leadership. Riverview seeks to provide
deserving physical and emotional care for all patients and their families. They are committed to
the care of all regardless of their financial status. The mission of Riverview Regional Medical
Center is “To deliver compassionate, quality care to patients and better healthcare to
communities”, they serve (RRMC, n.d.).
Organization’s Vision Statement
Riverview Regional Medical Center will provide exceptional healthcare to inspire a
healthier community. We are always looking for new ways to improve our health care practice
and patient experience. We are known for creating a caring safe environment that is recognized
by employees, patients, families and volunteers. We realize the goal of an excellent medical
organization is to treat patients with integrity to improve the quality of care to the patients we
serve.
Organization’s Values
The values, that guide Riverview Regional Medical Center’s mission is the face of the
vision and intent of our organization. Riverview Regional Medical Center is always committed
to providing exceptional healthcare services. Their values are as follows:
•
“We deliver patient-centered healthcare with compassion, dignity and respect for every
patient and their family”.
•
“We are honored to be trusted partners who serve, give back and grow with our
communities.”
EXTERNAL AND INTERNAL ANALYSIS
•
20
“We are a uniquely physician-founded and physician-led organization that allows doctors
and clinicians to direct healthcare at every level.”
(RRMC, n.d.).
Strategic goals
The goal of all doctors and medical professionals at Riverview Regional Medical Center
is to provide a therapeutic atmosphere that exudes the principles of patient safety, medical
excellence and customer service (RRMC, n.d.). Individuals employed by Riverview Regional
Medical Center strive every day to follow the hospital’s mission, vision and values.
EXTERNAL AND INTERNAL ANALYSIS
21
References
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Bryan, S. (2019, August 11). New Alabama Hospital Rules Benefits Rural Communities.
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EXTERNAL AND INTERNAL ANALYSIS
22
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Mission and Values . (2019). Retrieved from riverviewregional.com:
https://www.riverviewregional.com/About-Us/Mission-and-Values.aspx
My Chart Patient Portal. (2019). Retrieved from riverviewregional.com:
https://www.riverviewregional.com/Patients-Visitors/MyChart-Patient-Portal.aspx
NCSL. (2019, August 26). Substance Use Disorder Treatment Enacted Legislation 2019
Postcard. Retrieved from National Conference of State Legislatures (NCSL):
http://www.ncsl.org/research/health/substance-use-disorder-treatment-enactedlegislation-2019-postcard.aspx
EXTERNAL AND INTERNAL ANALYSIS
23
Perriello, B. (2019, July 10). These Medical Devices Are Exempt From The Trump Tariffs On
China. Retrieved from Mass Device: massdevice.com/these-medical-devices-are-exemptfrom-the-trump-tariffs-on-china/
Peter M Ginter, W. J. (2018). Strategic Mangement of Health Care Organizations. Hoboken:
John Wiley & Sons Inc.
Premack, R. (2019, October 03). UPS beat out Amazon and Google to become America's first
nationwide drone airline. Retrieved from Business Insider:
https://www.businessinsider.com/ups-is-now-operating-the-first-national-drone-airline2019-9
Roth, M. (2019, January 03). 3 Predictions For Virtual Care in 2019. Retrieved from Health
Leaders: https://www.healthleadersmedia.com/innovation/3-predictions-virtual-care-2019
RRMC. (n.d.). Heart and Vascular Center. Retrieved from Riverview Regional Medical Center:
https://www.riverviewregional.com/Medical-Services/Featured-Medical-Services/HeartCare-Center.aspx
RRMC. (n.d.). Mission and Values. Retrieved from Riverview Regional Medical Center:
https://www.riverviewregional.com/About-Us/Mission-and-Values.aspx
Scherman, J. (2019, May 20). 5 Ways Technology in Healthcare Is Transforming the Way We
Approach Medical Treatment. Retrieved from Rasmussen College:
https://www.rasmussen.edu/degrees/health-sciences/blog/technology-in-healthcaretransformation/
The Leapfrog Group. (n.d.). Specially Trained Doctors Care for ICU Patients. Retrieved from
The Leapfrog Group:
EXTERNAL AND INTERNAL ANALYSIS
24
https://www.leapfroggroup.org/hospital/profile/Riverview+Regional+Medical+Center/Ga
dsden/AL
Trading Economics. (2019). United States Employment Rate. Retrieved from Trading
Economics: https://tradingeconomics.com/united-states/employment-rate
U.S. Census Bureau. (2018, March 13). Older People Projected to Outnumber Children for First
Time in U.S. History. Retrieved from U.S. Census Bureau:
https://www.census.gov/newsroom/press-releases/2018/cb18-41-populationprojections.html
Usmani, F. (2019, February 3). What is a Functional Organization Structure? Retrieved from
pmstudycircle.com: https://pmstudycircle.com/2012/08/what-is-a-functionalorganization-structure/
Varas, J., & Hayes, T. (2018, July 12). How a Trade War with China Will Impact U.S. Health
Care Costs. Retrieved from American Action Forum:
https://www.americanactionforum.org/research/how-a-trade-war-with-china-will-impactu-s-health-care-costs/
Vogenberg, R. F. (2019, February). US Healthcare Trends and Contradictions in 2019. American
Health & Drug Benefits, 12(1), 40-47. Retrieved from
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6404804/
Weijian, S. (2019, December). The Unwinnable Trade War. Retrieved from Foreign Affairs:
https://www.foreignaffairs.com/articles/asia/2019-10-08/unwinnable-trade-war
Well Being Services. (2019). Retrieved from riverviewregional.com:
https://www.riverviewregional.com/Medical-Services/Other-Services/Well-BeingServices.aspx
EXTERNAL AND INTERNAL ANALYSIS
Williams, P. (2019, October 11). Judge rules Trump violated the law on wall funding with
national emergency. Retrieved from NBC News:
https://www.nbcnews.com/politics/immigration/judge-rules-trump-violated-law-wallfunding-national-emergency-n1065216
Your Hospital Visit . (2019). Retrieved from riverviewregional.com:
https://www.riverviewregional.com/Patients-Visitors/Your-Hospital-Visit.aspx
25
CASE
Pacific Cataract
17
and Laser Institute:
Competing in
the LASIK Eye
Surgery Market
Dr. Mark Everett, clinic coordinator and optometric physician
(OP) of the Pacific Cataract and Laser Institute (PCLI) office in
Spokane, Washington, looked at the ad that Vancouver, Canadabased Lexington Laser Vision (LLV) had been running in the
Spokane papers and shook his head. This was not the first ad
This case was prepared by John J. Lawrence and Linda J. Morris, University of
ldaho, for the sole purpose of providing material for class discussion. It is not
intended to illustrate either effective or ineffective handling of a managerial situation. The authors thank Dr. Mark Everett for his cooperation and assistance with
this project. The authors also thank the anonymous Case Research Journal reviewers and the anonymous North American Case Research Association 2000 annual
meeting reviewers for their valuable input and suggestions.
Copyright © 2002 by the Case Research Journal and John J. Lawrence and Linda
J. Morris.
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nor the only clinic advertising low-priced LASIK eye surgeries. Dr. Everett just
could not believe that doctors would advertise and sell laser eye surgery based on
low price as if it were a stereo or a used car. The fact that they were advertising
based on price was bad enough, but the price they were promoting – $900 for
both eyes – was ridiculous. PCLI and its cooperating optometric physicians would
not even cover their variable cost if they performed the surgery at that price.
A typical PCLI customer paid between $1,750 and $2,000 per eye for corrective
laser surgery. Although Dr. Everett knew that firms in Canada had several inherent
cost advantages, including a favorable exchange rate and regulatory environment,
he could not understand how they could undercut PCLI’s price so much without
compromising service quality.
PCLI was a privately held company that operated a total of 11 clinics throughout the northwestern United States and provided a range of medical and surgical
eye treatments including laser vision correction. Responding to the challenge of
the Canadian competitors was one of the points that would be discussed when
Dr. Everett and the other clinic coordinators and surgeons who ran PCLI met
next month to discuss policies and strategy. Dr. Everett strongly believed that
the organization’s success was based on surgical excellence and compassioned
concern for its patients and the doctors who referred them. PCLI strived to provide the ultimate in patient care and consideration. Dr. Everett had joined PCLI
in 1993 in large part because of how impressed he had been at how PCLI treated
its patients, and he remained committed to this patient-focused value.
He was concerned, however, about his organization’s ability to attract laser
vision correction patients. He knew that many prospective PCLI customers would
be swayed by the low prices and would travel to Canada to have the procedure
performed, especially because most medical insurance programs covered only
a small portion of the cost of this procedure. Dr. Everett believed strongly that
PCLI achieved better results and provided a higher quality service experience
than the clinics in Canada offering low-priced LASIK procedures. He also felt
PCLI did a much better job of helping potential customers determine which
of several procedures, if any, best met the customers’ long-term vision needs.
Dr. Everett wondered what PCLI should do to win over these potential customers –
both for the good of the customers and for the good of PCLI.
Pacific Cataract and Laser Institute
Pacific Cataract and Laser Institute (PCLI) was founded in 1985 by Dr. Robert Ford
and specialized in medical and surgical eye treatment. The company was headquartered in Chehalis, Washington, and operated clinics in Washington, Oregon,
Idaho, and Alaska. (Exhibit 17/1 shows a map of PCLI locations.) In addition to
laser vision correction, PCLI provided cataract surgery, glaucoma consultation
and surgery, corneal transplants, retinal care and surgery, and eyelid surgery.
Dr. Ford founded PCLI on the principle that doctors must go beyond science and
technology to practice the art of healing through the Christian principles of love,
kindness, and compassion. The organization had defined eight core values that
were based on these principles. These core values, shown in Exhibit 17/2, guided
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765
Exhibit 17/1: Map Showing PCLI Clinic Locations (Clinics designated by a♦; Anchorage,
Alaska, clinic not shown)
PCLI’s decision making as it attempted to fulfill its stated mission of providing
the best possible “co-managed” services to the profession of optometry.
Co-management involved PCLI working closely with a patient’s optometrists,
or OD (for doctor of optometry). In co-managed eye care, family ODs were the
primary care eye doctors who diagnosed, treated, and managed certain diseases
of the eye that did not require surgery. When surgery was needed, the family
OD referred patients to ophthalmologists (e.g., PCLI’s eye surgeons) for specialized treatment and surgery. Successful co-management, according to PCLI,
depended upon a relationship of mutual trust and respect built through shared
learning, constant communication and commitment to providing quality patient
care. PCLI’s co-management arrangements did not restrict ODs to work with
just PCLI, although PCLI sought out ODs who would use PCLI as their primary
surgery partner and who shared PCLI’s values. Many ODs did work exclusively
with PCLI unless a specific patient requested otherwise. PCLI – Spokane had
developed a network of 150 family ODs in its region.
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Exhibit 17/2: Pacific Cataract and Laser Institute’s Core Values
• We believe patients’ families and friends provide important support, and we encourage them to
be as involved as possible in our care of their loved ones.
• We believe patients and their families have a right to honest and forthright medical information
presented in a manner they can understand.
• We believe that a calm, caring, and cheerful environment minimizes patient stress and the need
for artifcial sedation.
• We believe that all our actions should be guided by integrity, honesty, and courage.
• We believe that true success comes from doing the right things for the right reasons.
• We believe that effcient, quality eye care is provided best by professionals practicing at the
highest level of their expertise.
• We believe that communicating openly and sharing knowledge with our optometric colleagues
is crucial to providing outstanding patient care.
• We believe that the ultimate measure of our success is the complete satisfaction of the doctors
who entrust us with the care of their patients.
PCLI operated its 11 clinics in a very coordinated manner. It had seven surgeons that specialized in the various forms of eye surgery. These surgeons, each
accompanied by several surgical assistants, traveled from center to center to
perform specific surgeries. The company owned two aircraft that were used to
fly the surgical teams between the centers. Each clinic had a resident optometric
physician who served as that clinic’s coordinator and essentially managed the
day-to-day operations of the clinic. Each clinic also employed its own office support staff. PCLI’s main office in Chehalis, Washington, also employed patient
counselors who worked with the referring family ODs for scheduling the patient’s
surgery and a finance team to help patients with medical insurance claims and
any financing arrangements (which were made through third-party sources).
Dr. Everett was the Spokane clinic’s resident optometric physician and managed the day-to-day activities of that clinic. Actual surgeries were performed
in the Spokane clinic only one or two days a week, depending upon demand
and the surgeons’ availability.
Laser Eye Surgery and LASIK
Laser eye surgery was performed on the eye to create better focus and lessen
the patient’s dependence on glasses and contact lenses. Excimer lasers were the
main means of performing this type of surgery. Although research on the excimer
laser began in 1973, it was not until 1985 that excimer lasers were introduced to
the ophthalmology community in the United States. The FDA approved the use
of excimer lasers for photorefractive keratectomy (PRK) in October 1995 for the
purpose of correcting nearsightedness. PRK entailed using computer-controlled
beams of laser light to permanently resculpt the curvature of the eye by selectively
removing a small portion on the outer top surface of the cornea (called epithelium).
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767
The epithelium naturally regenerated itself, although eye medication was required
for 3 to 4 months after the procedure.
In the late 1990s, laser in-situ keratomileusis, or LASIK, replaced PRK as the
preferred method to correct or reduce moderate to high levels of nearsightedness
(i.e., myopia). The procedure required the surgeon to create a flap in the cornea
using a surgical instrument called a microkeratome. This instrument used vacuum
suction to hold and position the cornea and a motorized cutting blade to make the
necessary incision. The surgeon then used an excimer laser to remove a microthin
layer of tissue from the exposed, interior corneal surface (as opposed to removing a thin layer of tissue on the outer surface of the cornea as was the case with
PRK). The excimer laser released a precisely focused beam of low temperature,
invisible light. Each laser pulse removed less than one hundred-thousandth of
an inch. After the cornea had been reshaped, the flap was replaced. The actual
surgical procedure took only about 5 minutes per eye. LASIK surgery allowed
a patient to eliminate the regular use of glasses or contact lenses although many
patients still required reading glasses.
Although LASIK used the same excimer laser that had been approved for other
eye surgeries in the United States by the Ophthalmic Devices Panel of the FDA,
it was not an approved procedure in the United States, but was under study.
LASIK was offered by clinics in the United States, but was considered an “off-label”
use of the laser. “Off label” was a phrase given to medical services and supplies
that had not been thoroughly tested by the FDA, but which the FDA permitted
to be performed and provided by a licensed medical professional. Prescribing
aspirin as a blood thinner to reduce the risk of stroke was another example of
an off-label use of a medical product – the prescribing of aspirin for this purpose
did not have formal FDA approval but was permitted by the FDA.
The LASIK procedure was not without some risks. Complications arose in about
5 percent of all cases, although experienced surgeons had complication rates of
less than 2 percent. According to the American Academy of Ophthalmology,
complications and side effects included irregular astigmatism, resulting in a
decrease in best corrected vision; glare; corneal haze; overcorrection; undercorrection; inability to wear contact lenses; loss of the corneal cap, requiring a corneal
graft; corneal scarring and infection; and in an extremely rare number of cases,
loss of vision. If lasering were not perfect, a patient might develop haze in the
cornea. This could make it impossible to achieve 20/20 vision, even with glasses.
The flap could also heal improperly, causing fuzzy vision. Infections were also
occasionally an issue.
Although PRK and LASIK were the main types of eye surgery currently performed to reduce a patient’s dependence on glasses or contact lenses, there were
new surgical procedures and technologies that were in the test stage that could
receive approval in the United States within the next 3 to 10 years. These included
intraocular lenses that were implanted behind a patient’s cornea, laser thermokeratoplasty (LTK) and conductive keratoplasty (CK) that used heat to reshape the
cornea, and “custom” LASIK technologies that could better measure and correct
the total optics of the eye. These newer methods had the potential to improve
vision even more than LASIK, and some of these new processes also might allow
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additional corrections to be made to the eye as the patient aged. Intraocular lenses
were already widely available in Europe.
LASIK Market Potential
The market potential for LASIK procedures was very significant, and the market
was just beginning to take off. According to officials of the American Academy
of Ophthalmology, over 150 million people wore glasses or contact lenses in the
United States. About 12 million of these people were candidates for current forms
of refractive surgery. As procedures were refined to cover a wider range of vision
conditions, and as the FDA approved new procedures, the number of people who
could have their vision improved surgically was expected to grow to over 60 million.
As many as 1.7 million people in the United States were expected to have some form
of laser eye surgery during 2000, compared to 500,000 in 1999 and 250,000 in 1998.
Laser eye repair was the most frequently performed surgery in all of medicine.
Referrals were increasingly playing a key role in the industry’s growth. Surgeons
estimated that the typical patient referred five friends and that as many as 75
percent of new patients had been referred by a friend. A few employers were
also beginning to offer laser eye surgery benefits through managed care vision
plans. These plans offered discounts from list prices of participating surgeons and
clinics to employees. Vision Service Plan’s (VSP) partners, for example, gave such
discounts and guaranteed a maximum price of $1,800 per eye for VSP members.
The number of people eligible for such benefits was expected to grow significantly
in the coming years. PCLI did not participate in these plans and did not offer
such discounts.
LASIK at PCLI
The process of providing LASIK surgery to patients at PCLI began with the
partnering OD. The OD provided the patient with information about LASIK and
PCLI, reviewed the treatment options available, and answered any questions
the patient might have concerning LASIK or PCLI. If a patient was interested in
having the surgery performed, the OD performed a pre-exam to make sure the
patient was a suitable candidate for the surgery. Assuming the patient was able
to have the surgery, the OD made an appointment for the patient with PCLI and
forwarded the results of the pre-exam to Dr. Everett. PCLI had a standard surgical fee of $1,400 per eye for LASIK. Each family OD added on additional fees for
pre- and postoperative exams depending on the number of visits per patient and
the OD’s costs. Most of the ODs charged $700 to $1,200, making the total price
of laser surgery to the patient between $3,500 and $4,000. This total price rather
than two separate service fees was presented to the patient.
Once a patient arrived at PCLI, an ophthalmic assistant measured the patient’s
range of vision and took a topographical reading of the eyes. Dr. Everett would
then explain the entire process to the patient, discuss the possible risks, and have
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769
the patient read and sign an informed consent form. The patient would then
meet the surgeon and have any final questions answered. The meeting with the
surgeon was also intended to reduce any anxiety that the patient might have
regarding the procedure. The surgical procedure itself took less than 15 minutes
to perform. After the surgery was completed, the patient was told to rest his/her
eyes for a few hours and was given dark glasses and eyedrops. The patient was
required to either return to PCLI or to his or her family OD 24 hours after their
surgery for a follow-up exam. Additional follow-up exams were required at
1 week, 1 month, 3 months, 6 months, and 1 year to make sure the eyes healed
properly and to insure that any problems were caught quickly. The patient’s
family OD performed all of these follow-up exams.
Three of PCLI’s seven surgeons specialized in LASIK and related procedures.
The company’s founder, Dr. Robert Ford, had performed over 16,000 LASIK
procedures during his career, more than any other surgeon in the Northwest. His
early training was as a physicist, and he was very interested in and knowledgeable about the laser technology used to perform LASIK procedures. Because of
this interest and understanding, Dr. Ford was an industry innovator and had
developed a number of procedural enhancements that were unique to PCLI.
Dr. Ford had developed an enhanced software calibration system for PCLI’s lasers
that was better than the system provided by the laser manufacturers.
More significantly, Dr. Ford had also developed a system to track eye movements. Using superimposed live and saved computer images of the eye, PCLI
surgeons could achieve improved eye alignment to provide more accurate laser
resculpting of the eye. Dr. Ford was working with Laser Sight, a laser equipment manufacturer developing what PCLI and many others viewed as the next
big technological step in corrective eye surgery – custom LASIK. Custom LASIK
involved developing more detailed corneal maps and then using special software
to convert these maps into a program that would run a spot laser to achieve
theoretically perfect corrections of the cornea. This technology was currently in
clinical trials in an effort to gain FDA approval of the technology, and Dr. Ford
and PCLI were participating in these trials. Although Dr. Ford was on the leading
edge of technology and had vast LASIK surgical experience, very few of PCLI’s
patients were aware of his achievements.
Competition
PCLI in Spokane faced stiff competition from clinics in both the United States
and Canada. There were basically three types of competitors. There were general
ophthalmology practices that also provided LASIK surgeries, surgery centers like
PCLI that provided a range of eye surgeries, and specialized LASIK clinics that
focused solely on LASIK surgeries.
General ophthalmology practices provided a range of services covering a patient’s
basic eye care needs. They performed general eye exams, monitored the health of
patients’ eyes, and wrote prescriptions for glasses and contact lenses. Most general
ophthalmology practices did not perform LASIK surgeries (or any other types
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Exhibit 17/3: Eye Consultant’s Advertisement
of surgeries) because of the high cost of the equipment and the special training
needed to perform the surgery, but a few did. These clinics were able to offer
patients a continuity of care that surgery centers and centers specializing solely
in LASIK surgeries could not. Customers could have all pre- and postoperative
exams performed at the same location by the same doctor. In the Spokane market,
a clinic called Eye Consultants was the most aggressive competitor of this type.
This organization advertised heavily in the local newspaper, promoting an $1,195
per eye price (Exhibit 17/3). The current newspaper promotion invited potential customers to a free LASIK seminar put on by the clinic’s staff, and seminar
attendees who chose to have the procedure qualified for the $1,195 per eye price,
which was a $300 per eye discount from the clinic’s regular price.
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Surgery centers did not provide for patients’ basic eye care needs, but rather
specialized in performing eye surgeries. These centers provided a variety of eye
surgeries, including such procedures as cataract surgeries and LASIK surgeries in
addition to other specialty eye surgeries. PCLI was this type of clinic. The other
surgery center of this type in the Spokane area was Empire Eye. PCLI viewed
Empire Eye as its most formidable competitor in the immediate geographic area.
Empire Eye operated in a similar way as PCLI. It relied heavily on referrals from
independent optometric physicians, did not advertise aggressively, and did not
attempt to win customers with low prices. It did employ a locally based surgeon
who performed its LASIK procedures, although this surgeon was not nearly as
experienced as Dr. Ford at PCLI.
LASIK clinics provided only LASIK or LASIK and PRK procedures. They did
not provide for general eye care needs nor did they provide a range of eye surgeries like surgery centers. These clinics generally had much higher volumes of
LASIK patients than general ophthalmology or surgery centers, allowing them
to achieve much higher utilization of the expensive capital equipment required to
perform the surgeries. The capital cost of the equipment to perform the LASIK
procedure was about US$500,000.
The largest of these firms specializing in LASIK surgeries was TLC Laser Eye
Centers, Inc. TLC was based in Mississauga, Ontario, and had 56 clinics in the
United States and 7 in Canada. During the first quarter of 2000, TLC generated
revenues of US$49.3 million by performing 33,000 surgeries. This compared with
first quarter of 1999 when the company had revenues of US$41.4 million on 25,600
procedures. TLC was the largest LASIK eye surgery company in North America
and performed more LASIK surgeries in the United States than any other company.
The closest TLC centers to Spokane were in Seattle, Washington, and Vancouver,
British Columbia. The second largest provider of LASIK surgeries in the United
States was Laser Vision Centers (LVC), based in St. Louis, Missouri. Its closest
center to Spokane was also in Seattle.
Almost all of the Canadian competitors that had been successful at attracting
US customers were clinics that specialized solely in LASIK surgeries. The largest
Canadian competitor was Lasik Vision Corporation (LVC), based in Vancouver,
British Columbia. LVC operated 15 clinics in Canada and 14 in the United States,
and was growing rapidly. LVC had plans to add another 21 clinics by the end of
2000. During the first quarter of 2000, LVC generated revenues of US$20.1 million
by performing 26,673 procedures. This compared to first quarter of 1999, when
the company had revenues of only US$4.3 million on 6,300 procedures.
In total, there were 13 companies specializing in providing LASIK surgeries
in British Columbia, mostly in the Vancouver area. One of the British Columbia
firms that advertised most aggressively in the Spokane area was Lexington Laser
Vision (LLV). LLV operated a single clinic staffed by nine surgeons and equipped
with four lasers. The clinic scheduled surgeries 6 days a week and typically had
a 2-month wait for an appointment.
The service design process at LLV was structured to accommodate many patients
and differed significantly from PCLI’s service process. To begin the process, a
patient simply called a toll-free number for LLV to schedule a time to have the
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surgery performed. Once the patient arrived at the LLV clinic, he or she received
a preoperative examination to assess the patient’s current vision and to scan the
topography of the patient’s eyes. The next day, the patient returned to the clinic
for the scheduled surgery. The typical sequence was to first meet with a patient
counselor who reviewed with the patient all pages of a LASIK information booklet that had been sent to the patient following the scheduled surgery date. The
patient counselor answered any questions the patient had regarding the information in the booklet and ensured that the patient had signed all necessary surgical
consent forms. Following this step, a medical assistant surgically prepped the
patient and explained the postcare treatment of the eyes. After this preparation,
the surgeon greeted the patient, reviewed the topographical eye charts with the
patient, explained the recommended eye adjustments for the patient, and reiterated the surgical procedure once again. The patient would then be transferred
to the surgery room, where two surgical assistants were available to help the
doctor with the 5- to 10-minute operation. Once the surgery was completed, a
surgical assistant led the patient to a dark, unlit room so that the patient’s eyes
could adjust. After a 15-minute waiting period, the surgical assistant checked the
patient for any discomfort and repeated the instructions for postcare treatment.
Barring no problems or discomfort, the surgical assistant would hand the patient
a pair of dark, wraparound sunglasses with instructions to avoid bright lights for
the next 24 hours. At the scheduled postoperative exam the next day, a medical
technician measured the patient’s corrected vision and scheduled any additional
postoperative exams. If desired, the patient could return to the clinic for the
1-week, 1-month, and 3-month postoperative exams at either the LLV clinic or one
of the US – based partner clinics of LLV. In some cases, the patient might opt to
have these postoperative exams performed by his or her family OD.
US patients traveling to LLV or the other clinics in British Columbia to have
the surgery performed needed to allow for 3 days and 2 nights for the surgery.
A pre-exam to insure the patient was a suitable candidate for the surgery was
performed the first day, the surgery itself was performed the second day, and the
24-hour postexam was performed on the third day. Two nights in a hotel near LLV
cost approximately US$100, and airfare to Vancouver, British Columbia, Canada cost
approximately US$150 from Spokane, Washington. Lexington Laser Vision had a
sister clinic in the Seattle area where patients could go for postoperative exams.
LLV requested patients to undergo follow-up exams at 1 week, 1 month, and
3 months. These exams were included in the price as long as the patient came
to either the Seattle or Vancouver clinics. Some patients outside of the Seattle/
Vancouver area arranged with their family ODs to perform these follow-ups at
their own expense to avoid the time and cost of traveling to Seattle or Vancouver,
British Columbia.
A breakdown of the estimated cost structure for each of these different competitors is shown in Exhibit 17/4. Dr. Everett believed that both Eye Consultants and
LLV were probably incurring losses. Both were believed to be offering belowcost pricing in response to the significant price competition going on in the
industry. Eye Consultants was also believed to be offering below-cost pricing in
order to build volume and gain surgeon experience. PCLI’s own cost structure
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773
Exhibit 17/4: LASIK-Related Revenue and Cost Estimates for PCLI’s, Competitors
(All Figures Are in US$)a
Competitor
Type of Operation
Location of Operation
Number of Procedures/Year
Price to Customer, per Eye
Estimated Revenues
Estimated Expenses
Payments for Pre- and
Postoperative Carec
Royalties
Surgeon’s Fees/Salary
Medical Supplies
Laser Service
Depreciation
Marketing
Overhead
Total Annual Expenses
Eye Consultants
Empire Eye
TLC Clinic
Lexington Laser
Visionb
General
Ophthalmology
Practice
Eye Surgery
Center
Specialized
LASIK
Clinic
Specialized
LASIK
Clinic
Spokane, WA
Spokane, WA
Seattle, WA
Vancouver, BC
600
$1,195
1,000
$1,900
4,000
$1,600
10,000
$500
717,000
$1,900,000
$6,400,000
$5,000,000
120,000
150,000
120,000
30,000
100,000
125,000
75,000
200,000
$925,000
450,000
250,000
300,000
50,000
100,000
125,000
75,000
350,000
$1,700,000
1,400,000
1,000,000
1,200,000
200,000
200,000
250,000
400,000
500,000
$5,150,000
1,500,000
0
1,500,000
500,000
400,000
500,000
500,000
600,000
$5,500,000
a
This table was developed based on a variety of public sources on both the LASIK industry in general and on
individual competitors. In a number of cases, the figures represent aggregated “estimates” of data from several
sources. Estimated expenses are based largely, but not entirely, on discussion of the LASIK industry cost structure
provided in “Eyeing the Bottom Line: Just Who Profits from Your Laser Eye Surgery May Surprise You,” by James
Pethokoukis, U.S. News & World Report, March 30, 1998, pp. 80–82.
b
This cost structure was thought to be typical of all of the specialized LASIK clinics located in British Columbia,
Canada, that competed with PCLI.
c
ln some cases, these costs are paid directly by the patient to the postoperative care provider; they have been included
here because they represent a part of the total price paid by the customer.
was fairly similar to Empire Eye’s cost structure, as both operated in a similar
fashion.
The Canadian Advantage
LASIK clinics operating in Canada had a number of advantages that allowed
them to charge significantly less than competitors in the United States. First, the
Canadian dollar had been relatively weak compared to the US dollar for some
time, fluctuating between C$1.45 per US dollar and C$1.50 per US dollar. This
exchange rate compared to rates in the early 1990s that fluctuated between C$1.15
per US dollar and C$1.20 per US dollar. On top of this, the inflation rate in Canada
averaged only 1.5 percent during the 1990s compared to 2.5 percent in the United
States. This dual effect of a weakened Canadian dollar combined with somewhat
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higher inflation in the United States meant that Canadian providers had, over
time, acquired a significant exchange rate cost advantage.
Second, laser surgery equipment manufacturers charged a $250 patent royalty fee
for each surgery (i.e., each eye) performed in the United States. The legal system in
Canada prevented equipment manufacturers from charging such a royalty every
time a surgery was performed, amounting to a $500 cost savings per patient for
Canadian clinics. Competitive pressure among surgery equipment manufacturers had caused this fee to drop in recent months to as low as $100 for certain
procedures performed on some older equipment in the United States, giving US
clinics some hope that this cost disadvantage might decrease over time.
Third, clinics in the United States generally paid higher salaries or fees to surgeons and support staff than did their Canadian rivals. The nationalized health
system in Canada tended to limit what doctors in Canada could earn compared
to their peers in the United States. LASIK clinics themselves were not part of the
Canadian national health system because they represented elective surgeries.
However, Canadian LASIK clinics could pay their surgeons a large premium over
what they could make in the nationalized system, but this was still significantly
less than a comparable surgeon’s earnings in the United States. This cost differential extended to the referring optometrists who provided pre- and postoperative
exams and whose fees were typically included in the price quoted to customers.
Many Canadian clinics relied more heavily on advertising and word-of-mouth
customer referral rather than referrals from optometrists and de-emphasized preand postoperative exams.
Fourth, there was some speculation among US clinics that some low-priced
Canadian clinics were making a variety of care-compromising quality trade-offs,
such as not performing equipment calibration and maintenance as frequently as
recommended by the equipment manufacturers and reusing the microkeratome
blades used to make the initial incision in the cornea. Canadian clinics denied
that the choices that they made compromised the quality of care received by the
patient. Finally, it seemed clear to Dr. Everett that Canadian providers were in
the midst of a price war and that at least some of the clinics were not generating
any profit at the prices they were charging.
Canadian providers also had significant noncost advantages. Because of differences in the approval process of medical equipment and procedures, laser eye
surgery technologies were often available in Canada before they became readily
available in the United States. Approval of new medical technologies in Canada
was often based on evidence from other countries that the technology was safe,
whereas approval of new medical technologies in the United States required
equipment manufacturers to start from scratch with a series of studies. As a result
of this, and combined with the volume that the Canadian clinics’ low prices generated, many Canadian clinics had more experience with laser eye surgery than
comparable clinics in the United States. Experience was a critical factor in a clinic
or specific surgeon having low rates of complications. Further, the differences in
the approval processes between the countries allowed Canadian providers the
ability to offer advanced equipment not yet available in the United States. For
example, the FDA approved the first generation of excimer laser for use in the
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US COMPETITORS’ RESPONSES TO THE CANADIAN CHALLENGE
775
United States in October 1995. No centers in Canada, however, had purchased this
particular laser since 1995 because more advanced versions of the technology had
become available for use in Canada. Although some of these equipment advances
have had minimal impact on the results for the average patient, they have, at the
very least, provided Canadian clinics a marketing advantage.
US Competitors’ Responses to the Canadian Challenge
The surgeons and staff at PCLI knew from reading a variety of sources and from
following changes in the industry that most US-based clinics were experiencing
some loss of customers to Canadian competitors. These companies were responding in a variety of ways in an attempt to keep more patients in the United States.
One company in the industry, LCA, had created a low-priced subsidiary, LasikPlus,
as a way to compete with lower priced competitors in Canada. LasikPlus had
facilities in Maryland and California and charged $2,995 compared to the $5,000
price charged by the parent company’s LCA Vision Centers. One way that the
LasikPlus subsidiary had cut cost was by employing its own surgeons. Regular
LCA Vision Centers provided only the facilities and equipment, and contracted
out with independent surgeons to perform the procedures.
Another strategy that US firms were using to compete was to partner with
managed care vision benefits firms, HMOs, and large businesses. TLC Laser Eye
Centers had been the most aggressive at using this strategy. It had partnered
with Vision Service Plan (VSP) to provide the surgery to VSP members at a $600
discount and had partnered with HMO Kaiser Permanente to provide Kaiser
members a $200 discount. TLC was also attempting to get employers to cover
part of the cost for their employees and was letting participating companies offer
a $200 discount on the procedure to their employees. Over 40 businesses had
signed up by late 1999, including Southern California Edison, Ernst & Young,
and Office Depot. TLC was not the only provider pursuing this strategy. LCA
Vision centers had partnered with Cole Managed Vision to provide the surgery
to Cole members at a 15 percent discount.
One of the significant advantages that US providers had over their Canadian
competitors was convenience, because patients did not have to travel to Canada to
have the procedure performed. Most facilities providing the surgery in the United
States, however, were located in major metropolitan areas, which may not be seen
as being all that much more convenient for potential patients living in smaller
communities and rural areas. One competitor had taken this convenience a step
further. Laser Vision Centers was using mobile lasers to bring greater convenience
to patients living in these smaller communities. It used a patented cart to transport
the laser to ophthalmologists’ offices, where it could be used for a day or two
by local surgeons. LVC could also provide a surgery team in locations where no
surgeons were qualified to perform the procedure. The company was serving
patients in over 100 locations in this manner and was expanding its efforts.
Technological or procedural advances offered clinics another basis upon which to
compete. For example, during the summer of 1999, Dr. Barrie Soloway’s clinic was the
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first in the United States to get an Autonomous laser. This laser was designed to overcome a major problem in eye surgery, the tendency for the eye to move while the procedure was being performed. In an interview with Fortune magazine, Autonomous’s
founder, Randy Frey, described the advantages of this new technology.
At present, doctors stabilize the eye merely by asking the patient to stare at a blinking red
light. But, says Frey, aiming a laser at the eye is “a very precise thing. I couldn’t imagine that
you could make optics for the human eye while the eye was moving.” The eye, he explains,
makes barely perceptible, involuntary movements about five times a second. This “saccadic”
motion can make it difficult to get a perfectly smooth correction. “The doctor can compensate
for the big, noticeable movements,” Frey says, “but not the little ones.”
Frey’s machine uses radar to check the position of the eye 4,000 times a second. He’s
coupled this with an excimer laser whose beam is less than 1 millimeter in diameter versus
6 millimeters for the standard beam. Guided by the tracker, this laser ablates the cornea in
a pattern of small overlapping dots. (Murray, 1999)
There were a number of technological advances under development like the
autonomous laser system that could have a significant impact on this industry.
With approvals for new procedures generally coming more quickly in Canada than
the United States, however, it was unclear whether technological advances could
help US providers differentiate themselves from their Canadian competitors.
The Upcoming Strategy and Policy Meeting
Every time Dr. Everett saw an exuberant patient after surgery, or read a letter of
gratitude from a patient, he knew in his heart that they were doing something
special. He was energized by the fact that the laser vision corrections they were
performing were changing people’s lives. He was also proud of the fact that they
continued to treat all of their customers as special guests. However, he knew that
for every LASIK patient they saw at PCLI, there was another potential PCLI patient
who went to Canada to have the surgery performed. PCLI had the capacity to do
more laser vision correction surgeries in Spokane than they were currently doing,
and he wanted to make use of that capacity. He felt both PCLI and prospective
patients from Spokane and the surrounding communities would be better off if
more of these patients chose PCLI for laser vision correction surgeries.
However, Dr. Everett was not sure what, if anything, should change at PCLI to
attract these potential customers. PCLI had already begun to advertise. Advertising,
in general, was not a commonly used practice in the US medical community, and
some in the medical profession considered much of the existing advertising in the
industry to be ethically questionable. Although Dr. Everett was comfortable with
the advertisements they had started running three months ago (Exhibit 17/5), he
was still unsure whether PCLI should be advertising at all. More importantly,
he felt that advertising represented only a partial solution, at best. What was
needed was a clear strategic focus for the organization that would help it to
respond to the Canadian challenge.
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T H E U P C O M I N G S T R AT E G Y A N D P O L I C Y M E E T I N G
777
Exhibit 17/5: Pacific Cataract and Laser Institute Advertisement
One obvious answer was to also compete on price; however, he simply could
not conceive of PCLI treating eye surgery like a commodity and competing solely
on price. Such a strategy seemed inconsistent with PCLI’s core values, unwise
from a business standpoint because PCLI’s operating costs were much higher
than its Canadian competitors, and simply wrong from an ethical standpoint. The
problem was, he was not sure what strategic focus PCLI should pursue in order
to retain its strong position in the Pacific Northwest LASIK market. What he did
know was that whatever this strategy was to be, it needed to emerge from next
month’s meeting, and he wanted to be prepared to help to make that happen.
He wanted to have a clear plan to bring to the table at this meeting to share with
his colleagues, even if it was simply a reaffirmation to continue doing what they
were currently doing.
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Running head: PACIFIC CATARACT AND LASER INSTITUTE
Phase Two: External and Internal Analysis
HSA4938
Palm Beach State College
The External Analysis and its Process
1
PACIFIC CATARACT AND LASER INSTITUTE
2
Pacific Cataract and Laser Institute (PCLI) is an eye center that specializes in eye
treatment. A six-step process called an external analysis reveals that the organization has an
opportunity to thrive in the state of Washington. Lawrence and Morris (2002) argue that the
clinic is dealing with a rising number of patients that are experiencing different eye issues. The
clinic has continued to offer various surgical operations and services to these patients. However,
in some situations, the organization experienced various problems that emanated from the
organization's environment. These factors are contributed by the independent variable and which
affects the organization's operations (Khan & Khalique, 2014). This case study analysis
illustrates the different concepts and issues that cloud the organization.
The six-step process is proposed by Ginter et al. (2018). The first step for assessing
PCLI’s environment involves organizing the assessment process and creating an issue map
template. The second process involves scanning the general situation, the healthcare system, and
the service area. The third step entailed monitoring and confirming external issues. In the fourth
and fifth steps, forecasting and assessing, respectively, of external issues was conducted. Finally,
the following issue map was generated.
Issue Map
Categories of Issue
Economic
Issue Map
General
Health Care
EnvironmentSystem-United
United States
States
Interest rates are high Healthcare products
(Austin et al., 2016).
and services are
expensive.
US experiencing a
poor financial state.
2017 Tax Cuts and
Cost of living
Jobs Act (Siwicki, B
increasing (The
2019).
USAonline.com,
Service AreaWashington State
Services are lost
because of the high
unemployment rate
(Austin et al., 2016).
Washington State
have very few
avenues open for
PACIFIC CATARACT AND LASER INSTITUTE
2020).
Social/Demographic
Legislative/Political
Technological
Decrease of College
graduates (The
USAonline.com,
2020)
Average standard of
living will rise (The
USAonline.com
2020).
Demand for medical
care and long-term
care facilities will
increase (The
USAonline, 2020).
Tax, consumer
protection, and
subsidies policies are
stringent.
Patients are turning to
natural remedies.
Medicare and
Medicaid promote
subsidies (Austin et
al., 2016).
Rising level of
international trade
(The
USAonline.com,
2020)
Some ACA revenueraising provisions
have been delayed or
eliminated (Siwicki,
2019).
High technological
advancement
There is high
innovation and
technology adoption
such as the Health
Information System
(Austin et al., 2016).
New manufacturing
technologies are
rapidly reducing the
number of production
jobs (Chao, Pham, &
Seregine, 2000).
Competitive
People are more
health-conscious
(Austin et al., 2016).
High competition
within the health
organizations.
By 2022, 20% of
workers are expected
to rely on artificial
intelligence to do
their jobs (Siwicki,
2019).
The healthcare
system is highly
competitive
US remains the
Lacking a "value
3
direct participation in
private economic
development projects
(MRSC 2017)
Washington residents
have a high literacy
level.
Carbon Dioxide from
fossil fuel use and
deforestation is
making the Pacific
Ocean and Puget
Sound more acidic
(Hart, 2020).
Professional bodies
play a significant role
in controlling
healthcare services
(Austin et al., 2016).
Washington State
may not loan or gift
public funds to a
private business due
to state laws. (MRSC
2017).
Eye services adopt
technologies such as
laser (Lawless &
Hodge, 2012).
Controversial use of
facial recognition
technology (Santos,
2020).
Eye products and
services are highly
competitive (Lawless
& Hodge, 2012).
PACIFIC CATARACT AND LASER INSTITUTE
world’s largest
recipient of foreign
direct investments
(Porter & Rivkin,
2012).
line" of products and
services (Siwicki,
2019).
4
Competitive prices
and high-quality
products need to be at
its best to lure
consumers away from
the black market
(Pistilli, 2019).
Validation of the Strategic Assumptions
Performance and general environment trend/issues. General issues that PCLI is likely
to face involve the increasing population in the US, especially regarding people who are aged 65
years and older. As the population increases, it is estimated that the demand for eye health
services will rise by 47%, which is an equivalent of having 15 million new patients eye-related
issues by the year 2020 (Alldredge, 2014). As a result, this presents as both an opportunity and a
crisis for the PCLI. Also, the organization's performance has been affected significantly by the
trends in the environment like the change in the technology that is used in the health care
industry. The costs of operations have increased significantly.
Performance and health care system trends/issues. PCLI focuses on customer care
rather than how cheap it will cost to have corrective eye surgery. The trends in the healthcare
system have affected the organizations adversely more so when it comes to the policies and the
regulations governing the healthcare system. The trends call for the organization to adjust their
strategies. For example, in the ophthalmology world, the high cost of necessary equipment and
special training is needed so that surgery can be performed properly. Keeping up with the trends
can be challenging because you want to make sure that your organization is up to speed on what
is required to maintain your facility.
Performance and service area trends/issues. The service area trends like the behavior
of the suppliers and the customers have also had adverse effect on the organization’s
PACIFIC CATARACT AND LASER INSTITUTE
performance. Some suppliers have been relatively unreliable making it quite challenging for the
organizations to come up with an effective and profitable operations strategy in the industry.
Canada is very near to the Washington State area. As previous stated, clinics in Canada such as
Lexington Laser Vision (Lawrence & Morris, 2002) will offer services at such a cheaper rate that
customers will prefer to travel to another country just to have eye surgery. While offering cheap
prices is easy to attract new customers, you need to make sure that it is the right thing to do for
your organization. It may not be ideal to offer cheaper services if it costs you more to run your
actual clinic or equipment.
Effect of new technology developments. There are several technological developments
in the industry which will have significant implication on the organization. The technological
advancements have been embraced on the operations and right now, the business organizations
find it easy to carry out different activities. The operations costs and the quality of services will
reduce significantly in the healthcare, hence increasing the profits. Another issue is as medical
technology advances and equipment such as optical coherence topographers, corneal
topographers, nerve fiber analyzers, and pachymeters continue evolving, it is important for PCLI
to keep up with any and all changes (Johnson, 2010). Keeping track of medical technological
advancements will improve their reimbursement and revenue aspects and increase the patients’
confidence in their doctors. As a result, the patients will keep coming back and enjoying value in
their services.
Legislative/Political environment changes. There have been changes in the political
environment on issues like the policies guiding the activities of the healthcare organizations.
Most of the laws guiding the insurance policies and issues like alternative medications have
changed over the years. Changes in policies such as the Affordable Care Act, Medicaid, and
5
PACIFIC CATARACT AND LASER INSTITUTE
Medicare, are likely to influence PCLI’s pricing strategies, financial alliances, and investment
options. For example, some insurance companies might opt to limit access to physicians they
deem expensive, and employ restrictive formularies, or pre-authorizations to enable them to
contract with inexpensive doctors. However, since eye care is not hospital-based and is not a
large part of commercial insurance portfolios, it is likely to escape such financial and policy
influences (Stuart, 2020).
Effect of new local, state, or federal regulations/laws. The new laws that were
previously mentioned in the issue map will affect the operations because they will change the
manner customers are treated by the various professionals and the organizations. They will also
adjust on the manner the service is priced. The performance and the operations will therefore be
affected significantly. From what is shown in the issue map, , there is also enough evidence that
there is a need to understand and leverage the proper grasp of the clinic with a higher obligation
to attract external customers. The clinic needs to align itself with the legal requirements of the
United States and other countries that the company is situated.
New economic issues. There are new economic issues like the changes in the currency
values and the inflation rates that will affect the customers and suppliers’ powers and behavior.
Within the current headquarters of the clinic, the country experiences a rather poor financial state
as there is a continued increase in inflation, and which has adversely affected the clinic's
operations. Comparing the economic conditions in competing nations like Canada, there is
limited inflation, and which has led to improved pricing of surgery services by Canadian based
clinics.
Service Area Structural Analysis
Service Area Structural Analysis
6
PACIFIC CATARACT AND LASER INSTITUTE
Five Forces
Forces Driving Service Area
Conclusion
Competition
Threat of New
There are several LASIK clinics
High. The threat of new
Entrants
surrounding the Washington State
entrants will stay high due to
and Canada area. TLC Laser Eye
the growing trend of Lasik
Centers is one of those organizations eye surgery being done on an
that has 56 clinics in the United
increased number of patients
States and 7 clinics in Canada.
in their local area.
Intensity of Rivalry PCLI focuses more on the quality of
High. PCLI may not offer
care and compassion for their patients better prices such as other eye
while providing excellent skills on
centers do in Canada, but they
eye treatments that include laser
do a much better job of
vision correction surgery.
helping patients determine
which eye procedure is best
for them to meet the longterm vision needs.
Threat of substitutes
The threat of substitutes as far as
High. New surgical
procedures goes is that currently,
procedures and technologies
PRK and LASIK are the main types
are becoming more advanced
of corrective eye surgery available
such as laser
that is approved by the FDA. In
thermokeratoplasty (LTK)
conclusion, the threat is high.
and conductive keratoplasty
(CK).
Bargaining Power of Vision Service Plan’s (VSP) partners
High. More people will
Buyers (Customers)
offers discounts and guaranteed
become eligible for this
maximum payout price of $1,800 per benefit in the coming years so
eye for VSP members,
PCLI may want to consider
accepting this plan since they
currently do not participate in
these plans.
Bargaining Power of Bargaining power of suppliers is high
High. Due to the new
Suppliers
because Dr. Ford worked closely
developments that were
with Laser Sight, a laser equipment
discovered by Dr. Ford and
manufacturer that helped develop
Laser Sight, an enhanced
procedural enhancements that are
software calibration system
unique to PCLI.
was made along with eye
movement tracker that helps
to improve eye alignment and
help provide a more accurate
laser re-sculpting of the eye.
Internal Analysis
The Value Chain
Service Delivery.
7
PACIFIC CATARACT AND LASER INSTITUTE
Pre-Service. Pacific Cataract and Laser Institute (PCLI) was founded by Dr. Robert Ford
in 1985. PCLI started in the small town of Chehalis, Washington where their headquarters
remains today (Pacific Cataract and Laser Institute, 2020a). In addition to the Washington
location, they also served Oregon, Idaho, and Alaska. Now PCLI has a foothold in other states
that include Montana and New Mexico. They have 17 locations within the 6 states and their
mission is consistent in all locations which is to provide the best possible co-managed care to
their patients. PCLI could improve its market share by expanding services beyond the 6 states
they currently serve. PLCI is a leader in eye care services providing quality care in cataract
surgery, glaucoma consultations and surgery, corneal transplants, retina care, and surgery, eyelid
surgery and Lasik vision correction. PCLI has an established and comprehensive patient portal
where patients can correspond with their doctor(s) or the practice, view and update personal
health records, access education information, and view and schedule appointment. The patient
portal is also accessible on most mobile devices making it convenient for patients to utilize.
Point of Service. At the core value of how patients receive services at PCLI is through a
group approach known as co-managing. From its inception, PCLI realized that the best way to
provide quality care to their patients is by working closely with their optometrists or Doctor of
Optometry. The specialist at PCLI works closely with the patient’s primary care eye doctors to
ensure the best result for their patients. PCLI recognizes the financial implications for a patient to
receive treatment and therefore; they participate with a wide range of insurance plans and are
continually being added as providers to additional plans. At PCLI they also offer flexible
payment options to ease the burden for services not covered under a patient’s plan. The Point of
Service plan at PCLI is to go beyond the scope of the treatment they provide by partnering with
8
PACIFIC CATARACT AND LASER INSTITUTE
the primary care provider and to provide several financial options to their patient to ensure they
receive the services needed.
After service. In addition to the interactive patient portal where new and existing patients
have access to a tremendous amount of information, PCLI also provides other services to their
patients when they leave the office so they can receive additional information and education.
Among the resources available at PCLI is their Video Eye Library. In this library, patients can
explore a wide range of medical conditions and treatment options. The library may even cover
areas that PCLI does not specifically provide but thought would be helpful to their patient. PCLI
working together with a patient’s primary care eye doctor will also assist in referring patients if
their condition is outside the scope services provided. PCLI has a Find an Optometrist tool
available for their patient’s convenience. Another resource available at PCLI is their newsletter
which has been provided over to 60,000 patients (Pacific Cataract and Laser Institute, 2019).
Support activities.
Organizational culture. “Organizational culture is unique and exerts a powerful
influence on how people function and act as a key factor in how well the organization performs
(Ginter, Duncan & Swayne, 2018 p.366). The culture at PCLI is based on the Christian
principles of love. As founder and president of PCLI, Dr. Robert Ford has a strong Christian
belief that is shared by many doctors, staff, and management team members (Pacific Cataract
and Laser Institute, 2020b). At PCLI, the care given to their patients goes beyond the science and
technology of the services they provide to include the art of healing with kindness and
compassion.
9
PACIFIC CATARACT AND LASER INSTITUTE
Organizational structure. PCLI is recognized as one of North America’s most
experienced eye care facilities. It has achieved this success by adhering to a strategic
organizational structure of consistency throughout the organization. PCLI openly seeks the
assistance of the patient’s primary eye care doctor to ensure all the patients’ needs are being met.
At PCLI there is a team approach to providing excellent care to their patients and therefore
among the different organizational structures the best one to describe how PCLI operates is
through the functional structure. Each member of the PCLI team has a specific role to meet the
patient’s needs. PCLI has experts in each functional area including finance, human resources,
marketing, information services, and clinical operations each focused on a specific area of
patient care.
Strategic Resources. “Effective development and use of key organizational resources are
critical in carrying out the selected strategies” (Ginter et al, 2018 p.374). There are many areas to
consider in the discussion of strategic resources which include finance, human resources,
information and technology. At PCLI Chip Deitrich, CPA is the Director of Finance and
oversees a team of experts in accounting, patient finance, purchasing and receiving and managed
care. Robert Jasa is the Director of Healthcare and Informatics and his role is to oversee the
electronic processing of patient financial data, medical records and real-time monitoring of
patient flow. PCLI are in search of a better way to capture data found on a digital pen and paper
technology resulting in more efficient operations (Eyewire News (2012). This pen and paper
technology interpret with handwriting with high accuracy and at first, Jasa was skeptical but now
is implementing the technology in all PCLI locations. In addition, Dr. Ford has been credited
with many innovations in cataract surgery and the doctors at PCLI often participate in clinical
studies in search of improving the quality of care provided at PCLI.
10
PACIFIC CATARACT AND LASER INSTITUTE
11
Organizational Strengths and Weaknesses
Value Chain Component
Value-Creating Strength
Value-Reducing Weakness
1. Services are offered in 17
locations across 6 states.
2. A leader in eye care
services.
3. Comprehensive patient
portal.
3. Offering a co-management
approach to health services.
4. Participation in a wide
range of insurance plans.
5. Offering flexible payment
options.
6. Offering patients a Video
library.
7. Providing patients with the
Find an Optometrist tool.
8. Reaching over 60,000
patients with the newsletter.
1. Have not branch out
beyond the 6 states they
currently serve.
Service Delivery
Pre-Service
Point-of-Service
After-Service
None
2. They don’t provide all
services listed in the video
library so patients will have
to seek some services
elsewhere.
3. Losing market share by not
providing primary optometry
care.
Support Activities
Culture 9. Christian principles of
love.
10. Emphasis on kindness and
compassion as part of
providing health services.
Structure 11. Maintaining a consistent
organizational functional
structure.
12. A team approach to
providing services.
Strategic Resources 13. Digital pen and paper
technology.
14. Innovations in cataract
surgery.
15. Participation in clinical
studies.
1. Openly identifying with a
specific religion may limit the
patient demographic who will
seek services.
1. A team approach can
sometimes cause delays in
services if when there is a
disagreement in managing the
patient’s protocol.
1. Technological advances
happen so quickly is may not
be financially feasible to stay
competitive.
PACIFIC CATARACT AND LASER INSTITUTE
12
Competitive Relevant Advantages and Disadvantages
Strengths
Is the Value
of the
Strength
High or
Low? (H/L)
Is the
strength
Rare? (Y/N)
Can the
strength be
Sustained?
(Y/N)
N
Is the
Strength
Easy or
Difficult to
Imitate?
(E/D)
E
Service
Delivery
-Pre-Service
Service
Delivery
-Point-ofService
Service
Delivery
-AfterService
Support
Activities
-Culture
Support
Activities
-Structure
Support
Activities
-Strategic
Resources
H
H
N
E
Y
H
N
D
N
H
N
D
N
H
N
E
N
H
N
D
N
Weaknesses
Is the Value
of the
Weakness
High or
Low? (H/L)
Is the
weakness
Easy or
Difficult to
Imitate?
(E/D)
Can
competitors
Sustain their
Advantage?
(Y/N)
Service
Delivery
-Pre-Service
Service
Delivery
-Point-ofService
Service
Delivery
H
Is the
Weakness
Common
(Not Rare)
Among
Competitors?
(Y/N)
Y
E
Y
H
Y
E
N
H
Y
D
Y
Implications
Y
Implications
PACIFIC CATARACT AND LASER INSTITUTE
-AfterService
Support
Activities
-Culture
Support
Activities
-Structure
Support
Activities
-Strategic
Resources
13
H
Y
D
N
H
N
E
Y
H
N
E
N
Implications of the Competitive Advantages and Disadvantages
Competitive Relevant Strengths
1. Individuals that have gone or will go
through Lasik surgery will have
improved vision and will not have to
wear glasses.
2. With Lasik, all adverse effects from
contacts and glasses will be gone,
instead patients will experience
healthier eyes.
Strategic Implications
1. Lasik has a competitive industry
regarding safety and pricing regarding
the laser eye surgery.
2. Healing time is anywhere where from
24-36 hours. Individuals can return to
their everyday lives with minimal
downtime.
Competitive Relevant Weaknesses
1. Dry eye can occur and can last for
days or in severe cases, months.
Strategic Implications
A prescribed dry eye medication, oral flax
seed, and a possible punctual occlusion will
be used to strategically fix the problem.
Very low complication that can occur percent
rate is anywhere from 3% to 5.7%. A second
surgical correction is needed, and a second
laser procedure is needed to correct the issue.
2. Flap becoming displaced, flap breaks,
and possible debris becoming trapped
under the eye.
Directional Strategies
Organization’s Mission Statement
PACIFIC CATARACT AND LASER INSTITUTE
The mission statement that PCLI adheres by is to "provide the best possible comanagement services to the profession of Optometry" (Pacific Cataract & Laser Institute, 2020).
Their characteristics are well written and are communicated to their patients. It describes what
kind of organization they are. The mission statement does show the uniqueness of the
organization. Co -management is when different optometrists work with PCLI in referring their
patients to their organization and perform any eye procedure that is necessary for the patient. In
order to have a successful co management relationship, PCLI believes that mutual trust and
respect needs to be established through shared learning, constant communication and sharing the
same commitment of providing quality patient care (Lawrence & Morris, 2002).
Organization’s Vision Statement
The vision statement that PCLI believe in is earning the patient's and referring physician's
trust in their care and caring for their patients. The vision statement correlates with their mission
statement. It is clear and consistent. It demonstrates what the organization ultimately wants to do.
It gives the patients that sense of hope that this organization is right for them. Co management
with building trustful relationships with other physicians and sharing their skills and knowledge
with them is one of their vision statements. And lastly, to help patients realize the benefits of co
management (Pacific Cataract & Laser Institute, 2020).
Organization’s Values
The values that PCLI strictly follow is that they believe that the support of family and
friends will help with recovery and care of their patients. They believe that giving honest medical
information matters and making sure that they understand that information is important. They
feel that setting the right stress-free environment will help reduce the usage of artificial sedation
(Lawrence & Morris, 2002). All actions will be guided by integrity, honesty, and courage. Doing
14
PACIFIC CATARACT AND LASER INSTITUTE
the right thing for the right reason is another value that they go by. They also believe that getting
the efficient quality eye care can only come from professionals that practice at the highest level
of their expertise. Communication and sharing knowledge with their optometric colleagues are
critical to help provide excellent patient care. And lastly, is that the organization has the ultimate
success of earning the trust of the referring physicians of their patients (Lawrence & Morris,
20...
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