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Lexington Medical Center at Irmo  

The Lexington Medical Center at Irmo (LMCI) was established in 1971 as an ambulatory care hospital with two fully functional outpatient operating rooms, an X-ray lab, a clinical lab, and an urgent care center. As of 1990, budgeting responsibilities fell completely on the Director of the facility. In an effort to improve the budgeting and planning process, IMS Quantum was engaged to build an Integrated Planning Model as a centerpiece of the planning process.

The model comprised segments reflecting the demographics influencing the market for urgent care, opportunities and plans for expanding occupational health care relationships, and opportunities for increasing usage of the functional units of the facility.

The market for the functional units began with the sources of referrals from the various health care specialists in the target geographic area. Estimates were made of the activity in each of these offices that could potentially utilize LMCI services. The portion of that activity captured by the LMCI was estimated and the number of procedures in the facility was derived. Source numbers were adjusted until the actual LMCI results for the previous planning period were reflected. The derived quantitative picture was taken to be an explanation of LMCI past activity. Alternative scenarios were tested in the model until a picture was created of what management wanted the facility to look like at the end of the next planning period. The Integrated Planning Model indicated hundreds of opportunities for improvement. Many of these improvements were reflected in the new scenarios and became the Measures of Performance of individuals responsible for the functional areas.

The model could be easily modified to reflect potential new areas of activity. In this case the addition of new space in the urgent care wing and the addition of new occupational health contracts were reflected. Variable costs were linked to levels of activity. Any dependency between departments was explicitly reflected, such as the influence of the Urgent Care unit on X-ray activity. The model showed how changes in the marketplace directly impacted costs and revenues. Thus, any important factor that influenced the success of the enterprise was reflected in the Integrated Planning Model.

Of importance is the fact that the collaborative process of building the model yielded dividends in Corporate IQ. The use and improvement of the model for budgeting and planning yielded further dividends, as planning became more rational. The rich context in which planning took place allowed management to assess the relative merits of different strategic alternatives. The model was clearly a repository of the organization's knowledge about itself and its environment. All personnel were stretched to find ways to improve operations, lower costs, and increase revenues.

 
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