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Managing Healthcare Organizations

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This paper will discuss the interrelation between strategic planning, information systems and performance management and their importance in quality health care delivery. The current health care system is quite complex and hence, there is a need for strategic planning to ensure good health care outcomes. Alternatively, information systems are an important component of the strategic plan as they play a vital role in improving health care. Kolodner, Cohn, and Friedman (2008) noted that information systems usually have much to offer in management of healthcare costs, as well as improving the overall quality of care. It is distinctively placed to acquire, amass, process, as well as communicate well-timed information to the hospital or system management for superior management of health care at both the country and individual level. Information systems play a critical function along the continuum of care and this highlights the importance of their inclusion in an organization strategic plan, which, in turn, leads to performance improvement.

This issue was chosen as the interrelation for the lack of it has considerable impact on the effectiveness of a health care system. Without information systems, the strategic plan of most health care organization is not complete, and this has a negative impact on patients. It is thus important to understand the interconnectedness between strategic planning, information system and performance improvement for healthcare settings. This paper will focus on the interconnectedness between the three and its importance in ensuring quality care for patients. The importance of strategic planning and information system will be explored, as well as the role of those in performance improvement. The combined role of strategic planning and information systems leads to better health outcomes. Performance improvement arising from the combined role will further be examined.

Statement of the Issue under Investigation

Healthcare managers are constantly seeking new and better methods for ensuring quality care. Identifying the interconnectedness between strategic planning, information system, and performance management is a relevant issue as it can lead to better health outcomes. The healthcare delivery environment is typified by tensions amid the call to adapt to varying conditions and the need for orderly routines (Markus, 2010). Thus, there is a need for a strategic plan to assist the organization in getting organized, performing an environmental assessment, developing a vision, developing a mission strategy, developing strategies for dealing with new issues that arise. Healthcare has a considerable impact on the quality of life, as well as functioning of people in the society.

Various healthcare mistakes have grave impacts that affect individuals’ capacity to undertake social and useful ventures. Piontek, Kohli and Conlon (2010) discussed the gravity of adverse events in healthcare settings as well as the danger that these events pose to persons and the public. More specifically, medical errors (one of the leading causes of adverse events, as well as other illnesses) are quite expensive, cost human lives and increase the patients’ hospital length of stay (Classen, Pestotnik & Evans et al., 1997). Concerning the level of general population, the failure to manage various transmittable conditions lead to grave public health matters. In result, there is a need to thoroughly pursue healthcare quality and to carefully execute it using different approaches: identifying the interconnectedness between the three aspects can facilitate such pursuits through highlighting, as well as scrutinizing errors at different phases along the care continuum.

Research Sources

Strategic planning, information systems, and performance improvement are interconnected and essential to quality delivery of health care. The U.S. health care delivery system is massive and complex (Agarwal, Guodong, DesRoches, & Jha, 2010). In result, strategic planning, information systems, and performance management are important to ensure provision of superior health care services. Strategic planning is important, as it leads to performance improvements with the help of information systems (Gunasekaran & Garet, 2004). Effective and successful health care services delivery calls for strategic plan. A strategic plan positions the health system or a hospital in a rapidly changing environment and provides focus, improves the orderly progression of development and management, minimizes risks and enables the organization to deal with major unforeseen external events that may take place (Agarwal et. al., 2010). This strategic planning process requires the physician, nurses, board members and other key stakeholders to play an active and continuous role in it for the objectives to be realized (Gunasekaran & Garet, 2004). Strategic planning leads to performance improvement as it entails creating a formal program for guiding the success and development of a health system or hospital and generally focuses and aligns the organizational resources to make sure that it realizes its mission.

With the healthcare environment constantly changing because of declining reimbursement, cost control, increasing government mandates, Medicare reform, malpractice premiums, health care providers need to chart a course and identify the direction the organization needs to head in order to ensure success (Gunasekaran & Garet, 2004). Information systems planning is equally important in strategic planning. This process entails identification, as well as assignment of priorities to the use of information technology, which will help the organization in implementing its strategic plans and attaining its strategic goals and objectives. It is critical to identify, buy, implement and manage in an orderly way some useful technology applications in health care (Agarwal et. al., 2010). Strategic information planning ensures alignment of information objectives with strategic objectives and goals of the organization; it defines specific information priorities and requirements; it defines the organization information infrastructure and develops a budget for resource allocation. There exists a mutually dependent link between the information systems and the organizational strategic plan. When creating the general strategic plan, it is thus usually important to perform a parallel process for adjustment or create the information technology strategic plan (Harris, 2005). The information systems and strategic plan inform each other and lead to performance improvement in health care organizations. Any organization seeking to improve its performance requires both information technology and operational strategic changes.

Strategic planning enables organization to define the things that are most important in objective and measurable terms. These are the goals which the organization should achieve (Laudon & Laudon, 2004). In addition, it places the health care organization at a competitive advantage in the future and helps to anticipate problems and take positive steps in eliminating those. It also helps to build orientation and commitment to a common purpose amongst key stakeholders, charts a clear direction, and furnishes marching orders for physicians, management, and staff to follow (Harris, 2005). It ensures consistency in decision-making and ensures efficient and effective allocation of resources in areas such as people, products/services, equipment, and facilities. Strategic planning establishes a basis for assessing both individual and corporate performance (Laudon & Laudon, 2004). In addition, it offers a management framework, which is used in facilitating faster responses to changing conditions and unplanned events. All these functions and advantages of strategic functioning lead to performance management and improvement. Information systems help in alignment of the business strategy stipulated in the strategic plan with technology. Information is power and hence it is considered an important resource in every organization. Effective information systems are usually strategically aligned with the mission, vision, objectives and goals of the company. Performance improvement is dependent on this alignment. The congruence ensures that all the stakeholders are on the same page and comprehend the significance of key technology implementation.

Information systems are usually part of the health care organization strategic plan (Laudon & Laudon, 2004). Currently, most health care organizations understand the capacity of technology-enabled systems as an investment rather than an expense. In result, most of them are exploring the most effective means of building and supporting technology-enabled systems throughout their enterprise. Technology systems, such as enterprise resource planning, facilitate efficiencies in large and complex healthcare organizations and computer based patient records, which enable the healthcare providers to care for patients more effectively (Glaser, Henley, & Downing et al., 2008). The information systems play an important function in the day-to-day management of healthcare organizations. Within the health care organization, data is collected about patients, services provided, and resource utilization. Such information is vital in strategic planning. Information systems play an important part in the storage, manipulation, and conversion of the information to satisfy the objectives of the healthcare organization. The information is then synthesized and converted to knowledge; this information and knowledge is a strategic resource for the organization when managed wisely. Health service managers usually use the information to control the organizational human, financial, material and physical change. As health organizations change and evolve, the information systems help in supporting organizational renewal by providing information, knowledge and facilitating new methods of working (Glaser et al. 2008). This, in turn, leads to performance improvement. Successful management of knowledge, data, and technology and information systems is important for health care organizations as they support patient management, medical decision making, financial management, resource planning and allocation, performance improvement, strategic management, priority setting and to modify organizational practices. To make decisions in the complex environment which the organizations operate in is difficult without information and the use of knowledge. Informational systems help managers and clinicians to seek more and better information and new knowledge for supporting their decision-making continuously (Marcus, 2010). The knowledge and information is extracted from new and existing information systems in health care organizations to improve patient outcome-performance improvement. It is usually important for the management to plan for information management systems. Information systems should be in line with the overall strategic plan of the organization. Strategic planning ensures that the strategic plan goes together with the organizational plan and fits with the information system (Gunasekaran & Garet, 2004). Health care organizations usually function in a rapidly changing environment and hence they have to be able to collect knowledge or information when necessary, communicate externally and internally, use existing or new knowledge and process knowledge in order for the clinicians and manager to make decisions effectively and quickly. The information systems provide the information and data required to manage through their interrelated components, which collect, process, store, retrieve, and distribute information in order to support decision-making and control within the organization. Laudon and Laudon (2004) noted that in the health care setting, information and knowledge is important for supporting work activities and decision making at different levels and for different purpoces. They key to successful implementation of these systems is the identification of main organizational stakeholders and sponsors, which can lead to decision making to timely consensus and to create alignment of different views and organizational behavior. Strategic planning lays out a plan on how to implement the information systems effectively.

Strategic planning requires data points that represent information used in developing the strategic plan. Such data points can be acquired using information systems. They include internal and external environment assessments (Harris, 2005). The strategic plan also states the mission of the healthcare organization - that is the main purpose of the organization. It contains values, which are the principles for behavior; these describe the manner in which people in the organization should act in order to ensure that the organization realizes its goals. The plan also contains the vision, which is a clear definition of the way the organization will be in the long term, for instance, in ten years; description of services to be provided by the organization; the set financial outcomes, and more. It thus articulates the organization set results. It also consists of goals, which are measureable statements of the things that the organization seeks to achieve in the short term for instance, in two years, in areas such as physician relations and services provided. These are the key organizational priorities. The plan also contains tactics/objectives-these are measurable and concrete initiatives which will be taken over the set period to ensure that the goals are achieved. To come up with the data points, mission, vision, values, goals, and objectives, a health care organization usually requires information and knowledge, which can only be attained using information systems (Harris, 2005). In result, the information system plays an important part in strategic planning. Information and knowledge obtained from the information systems helps in strategic planning and it, in turn, leads to performance improvement.

Strategic planning helps in determining the place where the organization wants to be in the future and the course it will follow to get there. Healthcare organizations that develop and put in place strategic plans are usually more successful than those, which do not (Harris, 2005). Together with the help of the information systems, strategic planning calls for choices to be made regarding the future of the organization. The choices have to do with the mission and vision, the objectives to be pursued, the services to be provided and to whom, the resources that will be required (knowledge, money, technology, facilities and people) and the way these will be attained. Improved performance from strategic planning is evident in improved organizational performance, optimum resource allocation, realizing the mission and vision of the organization, providing high quality health care services, meeting regulatory and accredation services, and better patient outcomes, which are reflected by better methods of treatment and reduced re-hospitalization (Mankins & Steele, 2005).

Generally, the interrelationship between strategic planning, information systems and performance improvement if well monitored can have a positive impact on a hospital, however, if not well monitored and some aspects are left out, it can fail to yield useful outcomes. Once strategic planning process and information systems are well-implemented, healthcare organizations stand to experience many benefits (Mankins & Steele, 2005). Through the help of information systems, strategic plans create a culture of innovation and anticipation instead of one of defensiveness and reaction. These develop a defensible and coherent base for making decisions, improving the allocation of resources, identifying low-performing and high performing areas and providing an opportunity for standardizing and becoming more efficient, improving the performance of the organization (Harris, 2005). More importantly, these help to establish the process for delivering high-quality care and shaping the future of the organization.


The research focused on the interrelationship betweenstrategic planning, information systems and performance improvement, and the impact on their association on improvement of patient outcomes. The association was investigated through thorough reviewing of the three issues. This topic was selected because identifying a positive relationship between the three in improving patient outcome can be applied in numerous healthcare settings. The study showed that strategic planning and information systems are very important in improving the performance of healthcare organizations. Strategic planning without information systems can not generate useful results, as information systems play an important role in the storage, manipulation and conversion of the information to satisfy the objectives of the healthcare organization. Information systems provide the necessary information to ensure that the strategic plan is effective in improving the performance of the health care setting or organization. It is thus important for healthcare organizations to acknowledge that information systems are an important component of their strategic plan, as they help to improve performance. 

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