Strategy Case HCA- AppleTree Consulting

AppleTree Consulting

Team Members: Timothy TeoRay YeoNg Soo HweeLiu Jing

1

Question 1

Why did Dr Akhileswaran (Dr. A.) consider Hospice Care Association (HCA) as lacking in strategic direction

and leadership after three months joining it?

2

Question 1

Why did Dr Akhileswaran (Dr. A.) consider Hospice Care Association (HCA) as lacking in strategic direction

and leadership after three months joining it?

3

Strategic Leadership - Definition

“Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic

change as necessary.”

Source: Hitt, Ireland, & Hoskisson (2007). Strategic Management:Competitiveness and Globalization (7th ed.) Thomson South-Western 4

Strategic Leadership - Facts and Inferences

Important to understand that Dr. A is the strategic leader in this case

He believes that he is “supposed to be looking after the

organization…in fact the CEO’s job” [p.6 para.3]

The board hired him partly for that reason “…they had no option” [p.8 para.3]

The case confirms it“his responsibilities...increasingly

included those of a CEO”[p.1 para.3]

5


“Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary.”

Anticipate

To foresee

The case provides nothing in particular about this, so we don’t know if Dr. A has

the ability to anticipate or not

6



To mentally picture the future

He lacks the ability to envision, which will be elaborated later under

Strategic Direction

Envision

7



Maintain Flexibility

To ensure the organization can respond to change

When change came in the form of the means test, Dr. A evidently could not get the

organization to respond effectively, with the result that HCA was still floundering after “more than 9 months to prepare for it” [p.14 para.1]

8



Empower others

To enable others to contribute to strategic change

During the means-test crisis, “without a leader to turn to, staff became increasingly disillusioned, with

doctors and nurses losing confidence in HCA’s ability to survive the turmoil”[p.7 para.6]. Dr. A failed at even

being visible and inspiring confidence to his followers,let alone empower them to contribute to strategic

change

9



Create strategic change as necessary

As the case stands currently, the strategic change required to adapt to the new

circumstances has not been reached as “the very existence of the centre” is under threat

10

Strategic Leadership - Conclusion

Anticipate

Envision

Empower others

Create strategic change as necessary

Don’t know

No, see strategic direction

No

No

We conclude that Dr. A probably did not display

effective strategic leadership as he did not create the

strategic change necessary to bring HCA through the

means-test crisis

11

Definition of Strategic Direction

“Determining the strategic direction of a firm involves developing a long-term vision of the firm’s

strategic intent”

Core Ideology

Envisioned Future

12

Strategic Direction - Facts and Inferences

Exists, a main part of which is “spending quality time with the

patients”[p.7 para.6]

But “strained by…additional visits…additional demands of conducting the means tests”

Dr A’s mentality is wondering about the future instead of

planning how to make it happen (p1para6)

Core Ideology

Envisioned Future

13

Strategic Direction - Conclusion

Core Ideology

Envisioned Future

Weak

Weak

We conclude that there is no

evidence to show that there

is strategic direction in HCA

14

Link between Leadership & Strategic Direction

“As strategic leaders, top-level managers must guide the firm in ways that result in the

formation of a strategic intent and mission” (Source: Hitt, Ireland, & Hoskisson (2007). Strategic

Management:Competitiveness and Globalization (7th ed.))

“Creating a compelling vision and developing a strategy to achieve it, is one of leadership’s primary functions. “ (Source: Quality Management Forum, Winter 2004)

15

Link between Leadership & Strategic DirectionLink between Leadership & Strategic Direction

Causal relationship

“Driver drives the car”

LeadershipStrategicDirection

16

Can there be Strategic Direction without Leadership?

Former is already in place from previous management

Intended strategy -> emergent strategy (L1 card game)

Hinge: No; still needs a change catalyst

LeadershipStrategicDirection

17

Limitations

Lack of information with regards to Dr A’s thoughts

Infer from case facts

18

Punchline

In Dr A’s opinion, there was no strategic direction and leadership, as there was a lack of effective leadership.

19

Question 2

Discuss options to improve the financial status in HCA. What more can MOH do to help the sustainability of such Voluntary Welfare Organization in Singapore.

20

Question 2

Discuss options to improve the financial status in HCA.

The existing amount of liquid assets HCA has on hand that can allow them to sustain their existing operations for 2 years at any point

of time.

21

Current Financial Status – Case Details

Year 2000Profit of $1.06 Million

Year 2001Loss of $1.75 Million

Deficit of $690,000

Current funds will last HCA for approximately 18-24 months

Assumption: They have a reserve due to deficit

funding by NCSS

“They only return some of the money to NCSS”22

Possible causes of HCA’s current financial status

Means Testing

Per Visits

23

Is means testing per visit a problem?

Assumptions

Total referrals remain at current level

Number of visits per referrals remain at current level

Distribution of untested visits follow the same distribution of tested visits

24

Total Visits

Number of visits

Types of visits

25

0"

2000"

4000"

6000"

8000"

10000"

12000"

14000"

16000"

Total"Nurse"Visits" Total"Doctor"Visit"

Untested"

Tested"

10"visits"per"untested"

4"visits"per"tested"2"visits"per"untested"

1"visits"per"tested"

Distribution of Visits

0"

500"

1000"

1500"

2000"

2500"

3000"

3500"

4000"

4500"

75%" 50%" 25%" 0%"

Nurse"Visit"

Doctor"Visit"

Number of visits

Subsidy rates for different

means testing bands 26

Funding contribution by different banding

$0##

$50,000##

$100,000##

$150,000##

$200,000##

$250,000##

$300,000##

$350,000##

$400,000##

75%# 50%# 25%#

Nurse$#

Doc$#

Amount of funds received

Subsidy rates for different

means testing bands 27

Conclusion

The current rate of work could actually sustain HCA.

$1,017,620 $1,016,089 vsProjected new funding Old annual funding

Means testing model per visit is not the problem

28

What caused HCA’s current financial status?

Ineffective implementation of means testing

HCA projected there will be a lack of funding due to partial/

lack of documentation

Full documentation is required (Pg 15):-Income tax statements-Pay slips-Employer’s letter-Statutory declaration-Self-declaration-Social Report by MSWs

29

First Solution

Uncooperative patients

Adopt a standardized

policy of proper documentation

Increase the number of trained social workers

Only patients who provide documentation will be

subsidized

Why was implementation ineffective in the first

place?

Nurses were unwilling to ask for documentation from

patients

There was only one medical social worker

30

Second Solution

Doing means testing in an efficient way

Emphasis of a work flow to increase efficiency

Encourage patients to apply for Public Assistance, Medical Fee exemption Card

or Medifund(Shift the burden to other organizations

and increase 75% patients)

Filter out patients under Public Assistance, those who hold a medical fee exemption

card, Medifund recipients and provide priority clearance

31

What is missing?

You need a CEO/finance officer to implement these solutions.

Adopt a standardized policy of proper documentation

Doing means testing in an efficient way

Both solutions are equally important.

32

Implemented together to achieve the optimal effect of improving HCA’s financial status

The ‘Hinge’

What if even after proper documentation, HCA still does not receive sufficient funding as a majority are in higher

bands that are no or little subsidy?

33

Contingency Plans

Patients within the higher bands to pay/pay more for

treatment

Dr A does not want patients to payHe is “adamant that care giving

should continue to be free of charge”

Direct increase in funds

There is a need for a compromise.

34

Unknowns Knowns

Why is HCA sticking with MOH?

NCSS is changing to programme funding. What is the impact on HCA?

LimitationsWe do not know how will this affect the solutions

intended to improve HCA’s financial status

35

How efficient is MOH in funding HCA? Will any time lags lead to liquidity problems?

Question 2

What more can MOH do to help the sustainability of such Voluntary Welfare

Organization in Singapore.

Ensure that VWOs are able to maintain or increase net cash

flows. This includes timing issues.

36

Common Issue facing VMO under MOH

MOH had stated that all funding will be done through means testing and this will require more manpower

across different VWO.

Assumption: Same type of information needed by all VWO and it is logical that a patient visited one of the medical

VWO is likely to visit another VWO.

37

Cooperative Strategy

COOPERATIVE STRATEGY

Joint Ventures Minority Equity

Consortia

Simple Cooperative

Alliances

Need for Integration Complexity of tasks to be undertaken LOW HIGH

HIGH

LOW

Com

patib

ility

of P

artn

ers

38

What type of strategy?

COOPERATIVE STRATEGY

Joint Ventures Minority Equity

Consortia

Simple Cooperative

Alliances

Need for Integration Complexity of tasks to be undertaken LOW HIGH

HIGH

LOW

Com

patib

ility

of P

artn

ers

All VWOs under MOH. They are compatible with one another because same means testing

required

Documentation process is straightforward and it is essentially the

same at different VWOs.

A cooperative alliance strategy will be suitable as they can

synergize and gain economics of scale.

Compatibility

Integration

39

Simple Cooperatives Alliance

Under the alliance, they can share the collected information with other VWOs. This eliminates repeated work. (Assumption: legally

and technically feasible)

Furthermore, data can synergize. With the information, some VWOs can pro-actively seek out patients that qualify for medical

aid and help them be in the 75% range.

40

How it help to sustain?

Reduce overhead cost of admin workers.

For VWOs that uses medical staff for this process, less time is spend on admin and more on patient interaction. Improve

work satisfaction.

Improve funding condition from synergetic actions. Changing the patients’ means-testing band.

41

Punchline

HCA should focus on implementing means testing effectively. MOH can increase sustainability of VWOs through a

cooperative strategy

42

The End

Q & A

43

Documents

Strategy Case HCA- AppleTree Consulting