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Volume

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Submitted By michaelmasters
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Running Head: Strategic Planning in an Era of Health Care Reform

Strategic Planning in an Era
Of Health Care Reform
‘Volume to Value’

Abstract The White House and the current administration of President Obama made the passage of Health Care Reform a top priority and signed the bill into law March 23, 2010. There are two laws that make up the reform package; the first is the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act. Critics both in support and opponents claim the bills do little to alter healthcare inflation or uneven delivery of care (Ferman, 2010). The goal of the bill is to change a volume based model in to a value based business model. A comment by Moody’s Investor services exclaimed that the reform will undoubtedly require healthcare leaders to focus even more on multi-year strategies to ensure long term financial stability (Kim, Majka, & Sussman, 2011). Leaders will have to establish a long range plan that includes financial projections and goals, long range capital expenditure requirements, debt capacity, capital position analysis, capital shortfall analysis and sensitivity and risk analysis (Kim, Majka, & Sussman, 2011). There will be substantial increases in the number of newly insured that will place a tremendous amount of stress and unknown consequences on an already burdened healthcare infrastructure (Tyson, 2010). The objective of this paper will attempt to examine the implications of reform on strategic planning of health care institutions transitioning from a volume based model to a value based one.

The recent passage of Health Care Legislation attempts to address payment and delivery systems currently in place that favor volume driven as opposed to value driven health care (Robert Wood Johnson Foundation, 2009). The current system of fee for service pays a set amount for

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