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.