launching a healthcare program sample

7/29/2019 Launching a Healthcare Program Sample

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SITUATION ANALYSIS

Lawrence + Memorial Hospital

Breast Health Center

GEORGE WASHINGTON UNIVERSITY2100 M Street #310, Washington, DC 20052

United States of America

Partial Requirements for Healthcare MBA

MBAD 6272 Group A

Spring 2013

Authored by: Bryan King, Raheela James, Ronald Llacuna,

Herjit Pannu, and Kelsey Vlieks
http://lmweb:8080/emp/teamsites/marketing2/Logos/01%20-%20Logos%20and%20Usage%20Guidelines/LMHosp-Ctr_4color.jpg


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EXECUTIVE SUMMARY

Lawrence and Memorial Hospital (L+M), located in New London, Connecticut, is in the

process of establishing a comprehensive Breast Health Center. L+Ms primary service area

has the highest incidence of breast cancer in Connecticut. The demand for oncology

services will only continue to grow, driven by population growth, aging and an increase insurvival rates. Establishing a designated Breast Center and forging a strong partnership

with Dana-Farber Cancer Institute and Yale Radiation Oncology will help elevate L+Ms

care plan for benign and malignant breast disease.

Breast health care is increasingly complex and multidisciplinary. This program proposes a

number of enhancements to L+Ms current breast health services that will lead to a

coordinated approach to care delivery. Attaining accreditation by the National

Accreditation Program will be a key differentiator from other programs as well as an

indication to consumers that L+M is providing quality care.

Over the last three years L+Ms market share has declined for many reasons, including the

loss of three surgeons and increased competition in the region. This competition is only

expected to increase as 85% of cancer care is provided on an outpatient basis. Also, it is

essential that L+Ms medical staff interests and needs are aligned with what the hospital is

planning in order to successfully develop new service lines, like the Breast Health Center.

L+M needs to target referral sources that are sending their patients outside of the area.

L+Ms strengths are their commitment to serving their community, growing surgical and

oncology service lines and partnering with well-established and reputable partners. They

have opportunities to improve collaboration amongst physicians and improve the qualityof care and patients access to comprehensive breast health care.

In creating a strategic marketing plan, it is critical for L+M to define their value proposition

(e.g., high tech, high touch, high quality) to patients, as well as physicians. Making the

physicians and the community aware that distinguished breast health care and world-class

cancer care is available in their community will be the first step to capturing greater

market share.


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TABLE OF CONTENTS

Introduction_______________________________________________________________________________________________5

Situation Analysis_________________________________________________________________________________________6

Environment______________________________________________________________________________________6

Political______________________________________________________________________________________6

Economic____________________________________________________________________________________7

Social_________________________________________________________________________________________7

Technology__________________________________________________________________________________8

Environment (Sustainability)______________________________________________________________9

Legal_________________________________________________________________________________________9

Consumer Environment__________________________________________________________________10

Summary of Environmental Opportunities and Threats_______________________________10

Implications for Strategy Development_________________________________________________10

Industry___________________________________________________________________________________________11

Classification and Definition of Industry________________________________________________11

Accreditation and Standards_____________________________________________________________12

Forecast on Breast Cancer Management________________________________________________13

Existing Competitors__________________________________________________________________________14

Potential New Entrants_______________________________________________________________________14

Substitute Products or Services______________________________________________________________14

Suppliers_______________________________________________________________________________________15

Buyers__________________________________________________________________________________________15

Summary of Industry Opportunities and Threats___________________________________________16

Implications for Marketing Strategy Development_________________________________________16

Organization_____________________________________________________________________________________________16

Objectives and Constraints____________________________________________________________________16

Financial Condition____________________________________________________________________________17

Management Philosophy______________________________________________________________________17

Organization Structure________________________________________________________________________17


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Organizational Culture______________________________________________________________________18

Summary of Breast Health Program Strength and Weaknesses_________________________18

Implications for Marketing Strategy Development_______________________________________19

Marketing Strategy____________________________________________________________________________________19

Objectives and Constraints__________________________________________________________________22

Sales, Profits, and Market Share____________________________________________________________22

Target Markets_______________________________________________________________________________22

Marketing Mix Variables_____________________________________________________________________23

Summary of Marketing Strategy Strengths and Weaknesses_____________________________24

Implications for Strategy Development____________________________________________________24

SWOT Analysis___________________________________________________________________________________________________25

Summary_________________________________________________________________________________________________________26

Appendix_________________________________________________________________________________________________________29

Financial Analysis _____________________________________________________________________________________29

Service Area____________________________________________________________________________________________30

Activity Time Line______________________________________________________________________________________31

References_______________________________________________________________________________________________________32


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INTRODUCTION

Lawrence + Memorial Hospital (L+M) has been serving New London County, CT for over

100 years. Founded in 1912, L+M is a 320 bed, not-for-profit, general, acute care, private

hospital. L+M serves eleven towns and southern Rhode Island and cares for tens of

thousands of patients every year.

The hospital offers many of the latest advances in healthcare, including PET/CT scans, 3T

magnetic resonance imaging, and the only Newborn Intensive Care Unit in eastern

Connecticut. It has the 6th busiest emergency department in the state of Connecticut and

offers emergency procedures, like tele-stroke and emergent percutaneous coronary

intervention (PCI).

In the fall of 2013, L+M will open a new Cancer Center in affiliation with Dana-Farber

Cancer Institute in Waterford, CT. In conjunction with opening the Cancer Center, L+M is

launching a Breast Health Center this fall to treat both benign and malignant breast disease.Currently, L+M has many components of a comprehensive breast health program; however,

the services are fragmented across multiple providers and treatment locations. As a result,

timely access to care and results have been an issue and residents are leaving the market

for treatment. Surgical volumes for lumpectomies and mastectomies at L+M have declined

by 15% between FY 2009 and FY 2012.

The goal of the new program is to elevate the level of care provided to patients throughout

the continuum of care. From diagnosis to post-treatment care, patients treatment will be

expedited, individualized, and coordinated among a multidisciplinary team.

Our objectives for this project are to work with L+M to help them better understands the

current environment, the industry and their strengths and weaknesses in relation to their

competitors. Patients have more access to information and consumerism is increasing;

therefore, L+M must differentiate themselves and define their value proposition (high tech,

high touch, research, quality) to patients, as well as physicians. By setting the framework,

we will assist L+M with developing a comprehensive marketing campaign to launch the

Breast Health Center.


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SITUATION ANALYSIS

Environment (PESTEL+C)

Political

Cancer is the second leading cause of death in Connecticut, where the percentage of

residents over 65 years of age is expected to go above 20% in 2030 (Gonsalves, et al.,

2012). Cancer hospitalization costs in Connecticut have increased from $352.6 million to

$809.2 million in the decade from 1999 to 2009 (State of Connecticut Department of Public

Health). That same year, some 20,000 new cancers were diagnosed in Connecticut

residents with breast, prostate, lung, and colorectal cancers accounting for over half of

these diagnoses and approximately the same percentage of deaths (Gonsalves et al., 2012).

The Breast Cancer Action group; a political advocacy organization based in San Francisco;

highlights that serious inequalities exist among various racial and economic groups with

respect to breast cancer. The death rate for African American women is the highest of any

racial group, and women of color are less likely to receive treatment that is deemed

standard of care (BCA, 2013). Women with lower incomes are less likely to be covered by

employer-sponsored insurance, which clearly affects their access to treatment. To address

these disparities, the CDC (2012) has suggested that optimal health-care delivery may be

strengthened through performance-based reimbursement, expanded use of information

technology, and quality assurance reporting-protocols. The CDC (2012) adds that proven

effective interventions such as patient navigation could be expanded for use in other

settings.

According to Gonsalves and colleagues (2012), the incidence of breast cancer in Hispanic

women in Connecticut is higher than expected relative to the Hispanic population in the

U.S. This elevation may reflect the high proportion of Puerto Ricans in Connecticut relative

to the US (53% in Connecticut versus 9% in US) (US Census, 2010). In Florida, at least one

study has shown that Puerto Rican Hispanics have higher cancer rates than other Hispanic

subgroups (Pinheiro et al., 2009).

Although breast cancer is a popular bipartisan political issue, this popularity does not

imply that all groups share the same interests or agree on strategies Weisman (2000).

Rosser (2000), for example, has highlighted the biomedical models focus on causes ofdisease at the cellular, hormonal, and genetic levels to the exclusion of possible

environmental or other causes. Steingraber (2000) further observes that despite the

growing evidence suggesting that environmental pollutants increase breast cancer risk,

there is a political reluctance to address these issues because they would require collective

action, chemical regulation, and corporate change instead of addressing the disease on an

individual level, where the responsibly and blame for the disease is on individual women.


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Baralt and Weitz (2012) note that these critiques apply to breast cancer advocacy as well,

and highlight that the corporatization of mainstream breast cancer advocacy, as reflected

by the Komen Foundation, has created a conflict of interest in that some advocacy

organizations may not be able to do what is best for womens health if it would offend their

funding sources (pharma, for example).

Economic

Writing in DailyFinance, Sheryl Nance-Nash cites American Cancer Society statistics that a

woman in the U.S. has a 12% chance of developing invasive breast cancer at some time in

her life. The American Cancer Society estimates that 230,480 new cases of invasive breast

cancer will be diagnosed in women in the U.S. every year, and nearly 40,000 women will

die from the disease. Breast cancer is the second leading cause of cancer deaths in women.

According to the National Cancer Institute, cancer care cost the American public $104.1

billion in 2006, with the largest portion, $13.9 billion, contributed by breast cancer (Nance-

Nash, 2011).

In the United States, the annual costs to fee-for-service Medicare for breast cancer

screening-related procedures (including screening and workup) and treatment

expenditures were $1.08 billion and $1.36 billion, respectively in 2006 to 2007 (Gross et

al., 2013). For women 75 years or older, annual screening-related expenditures were in

excess of $410 million. There is substantial regional variation that is driven by the use of

newer and more expensive technologies. However, it is not clear whether higher screening

expenditures are achieving better breast cancer outcomes.

In addition to the economic toll to the health care system, there is a significant cost toaffected individuals in the form of lost productivity, uncovered expenses, and psychosocial

costs (e.g. increase in divorce rate).

Social

Advances in diagnostic screening and adjuvant therapy have dramatically increased the

number of breast cancer survivors in the USA, who may face changes in physical and

mental health, social support, quality of life and economics (Ellsworth et al., 2008).

The literature on psychosocial aspects of breast cancer supports the conclusion that the

clear majority of women adjust well to the diagnosis of breast cancer and manage to

endure the complex and even toxic treatments associated with initial intervention and even

later recurrence (Ganz, 2008). In studies that have looked at quality of life and depression

after breast cancer, most patients and survivors demonstrate high levels of functioning in

the period after primary treatment. For women who experience a recurrence of breast

cancer, psychological wellbeing is still generally maintained (Ganz et al, 2002).


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According to Ganz (2008), social support for the woman with breast cancer includes

instrumental support, such as transportation to appointments, preparation of meals, and

help with activities of daily living, as well as emotional support, meaning the availability of

someone to share ones fears, feelings, and concerns. Inadequate levels of either of these

two forms of social support can increase the likelihood of psychosocial distress. This may

be particularly important in patients with advanced breast cancer.

Moreover, women living with breast cancer are increasingly interested in lifestyle

modification to decrease the risk of recurrence and mortality while increasing physical and

emotional wellbeing (Ellsworth et al., 2008). While studies examining the effects of lifestyle

on clinical outcomes including survival and prognosis have been inconclusive, the

American Cancer Society continues to recommend a healthy diet, physical activity and

stress reduction for decreasing breast cancer risk.

With the number of breast cancer survivors predicted to increase to 3.4 million by 2015

(Ellsworth et al., 2008), it is important to develop effective treatment paradigms that

overcome barriers to behavioral modification to improve clinical outcomes and

survivorship in women with breast cancer. To this end, Meguerditchian and colleagues

(2012) have recently shown that the quality of physician communication skills influences

health-related decisions, including use of cancer screening tests.

Technological

Considerable progress in prevention, early detection and treatment has led to a reduction

in the incidence and mortality of cancer, and resulted in significant improvements in

survival (Gonsalves et al., 2012). However, even with these advances, disparities exist forcertain populations in Connecticut. According to data from the Connecticut Tumor Registry,

the four most commonly diagnosed cancers (breast, prostate, lung and colorectal) account

for more than 50% of cancers diagnosed annually in Connecticut.

Gonsalves et al. (2012) examined time trends and compared the incidence and mortality

rates, stage at diagnosis, and survival and screening rates of cancer in Connecticut. These

authors provide insight into opportunities to improve health and reduce illness disparities

in residents of the state.

For example, with respect to screening and prevention, mammography screening providesthe opportunity to detect breast cancer at earlier and thus more treatable stages. In the US,

recommendations regarding screening mammography have been issued by a number of

professional groups including the US Preventive Services Task Force, and the American

Cancer Society. In Connecticut in 2010, significant differences characterize mammography

rates by income level (Gonsalves et al., 2012). Specifically, women over 50 years of age in

lower income brackets (


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have had a mammogram in the past two years compared to those in the highest income

bracket. A similar relationship exists when rates are analyzed by education level. Thus,

women without a high school education are much less likely to be compliant with screening

recommendations than college graduates.

Environmental (sustainability)

In Connecticut, as in the US as a whole, (Kohler et al., 2011) invasive breast cancer is the

most common cancer in women. Projections are that some 3,140 women will have been

diagnosed with breast cancer in Connecticut in 2012, and 480 women will die from their

disease (American Cancer Society, 2012). New London County has the highest cancer

incidence rates in the state; 282 patients per year are diagnosed with breast cancer each

year in New London County. In addition, benign breast health issues are also common.

Among the best-recognized risk factors for breast cancer are age, personal health history

(e.g. prior cancer diagnosis), family history of cancer (particularly early onset cancers),presence of the BRCA1 or BRCA2 genes, and reproductive history. In addition, as noted

above, race and ethnicity and certain lifestyle factors (overweight, lack of physical activity,

alcohol consumption.)

By mitigating certain risk factors, women may help prevent breast cancer. Women who

exercise regularly, who maintain a healthy weight (particularly after menopause) and who

minimize alcohol consumption have a reduced risk of developing breast cancer.

Legal

The Womens Health and Cancer Rights Act (WHCRA) was passed to protect women with

breast cancer who choose to have their breasts reconstructed after a mastectomy. It was

signed into law in 1998. This federal law requires most group insurance plans that cover

mastectomies to also cover breast reconstruction and was unchanged in the Affordable

Care Act of 2010. However, the ACA does contain provisions relevant to cancer. For

example, it removed lifetime dollar limits and restricted yearly dollar limits on health

benefits starting in September 2010. It will also remove all yearly dollar limits in 2014.

In addition, the ACA does not allow insurance companies to deny coverage for pre-existing

conditions (like cancer) in children as of September 2010. The same treatment of pre-

existing condition exclusions will take effect for adults starting in 2014. Relatedly, the ACA

does not allow insurance plans to stop coverage when patients get sick.

At the state level, the ACA created state or federally run Pre-Existing Condition Insurance

Plans (PCIPs) to cover people who have not had insurance for 6 months or more and have


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cancer or another pre-existing condition. Importantly for breast cancer centers, the ACA

ensures that coverage is available for patients who take part in clinical trials.

Consumer Environment

The consumer environment is characterized by both competition and fragmentation.Almost 85% of cancer care is provided on an outpatient basis; hospital-based programs

will face more competition for these services as more providers and outpatient alternatives

focus on cancer care. With respect to other hospital-based centers, the Backus Hospital,

Middlesex Hospital, and Yale Smilow Cancer Hospital all have existing programs. There is

thus an established primary care referral base that may not include L+M affiliated

providers. Potential national competition is also growing; the Cancer Treatment Centers of

America, for example, is a chain of affiliated hospitals (with one East Coast location in

Philadelphia); its latest facility opened in Atlanta in 2012.

Statewide, there are currently 17 hospitals in Connecticut that are accredited by theNational Accreditation Program for Breast Centers (NAPBC), a certification that was

developed by the American College of Surgeons (2013).

Accreditation from the NAPBC requires 17 essential components for a center including:

Imaging, Needle biopsy, Pathology, Interdisciplinary conference, Patient navigation,

Genetic evaluation and management, Surgical care, Plastic surgery consultation/treatment,

and Nursing.

Accreditation also includes 27 standards of care. In order to achieve three-year/full

accreditation, centers must provide all components and comply with at least 90% of thestandards of care. Information about the availability of breast cancer-related clinical trials

is also a requirement for NAPBC accreditation and is perceived as highly valuable for

potential patients and families. By participating in a clinical trial, patients can access the

latest treatments available, and some patients may be motivated to travel to L+M from

outside of its usual catchment area.

Summary of Environment Opportunities and Threats and Implications for Marketing Strategy

Development

From the political and legal standpoint, the momentum that eventually supported the

passage of the Patient Protection and Affordable Care Act is also playing out with respect to

breast cancer. Advocacy groups are increasingly voicing concern about racial, ethnic, and

income disparities in access to service, and government is increasingly focusing on

performance-based reimbursement and quality metrics. From a marketing perspective, it

is clear that the market for L+M must be segmented and that specific approaches will need


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to be developed for reaching the Hispanic population, the African American population, and

the Caucasian population.

From an economic standpoint, and in light of the political movement toward outcomes

metrics and pay-for-performance, it will be important to strike a balance between investing

in state-of-the art technology, and focusing on proven, evidence-based strategies forscreening and early detection. The Center at L+M would be wise to incorporate a robust

program for assessing and tracking both clinical outcomes and patient satisfaction. As

noted above, different segments of the population will place differential value on some

aspects of treatment, and being able to unpack the data by demographic will be very

important. Some populations may require much greater attention to psychosocial aspects

of their treatment and recovery for example. Enthusiasm for participation in research can

be very different by demographic. Murphy and colleagues (2010), for example, studied

willingness to participate in genetic research by race and ethnicity and observed that

among Blacks and Hispanics, mistrust and wariness, and stigma were significantlyincreased in those unwilling to participate. The perceived benefit to society and

importance for knowledge were associated with greater willingness to participate in

Whites only. For Blacks and Hispanics, the population between 1829 years of age, and

college education, partially reduced the association between wariness and mistrust and

willingness to participate. The authors concluded that recruitment efforts aimed at

increasing the representation of Blacks in research should take into account the barriers

among those who are less educated, and such efforts should involve interactive community

collaborations to address mistrust in this population. These same principles would likely

obtain with respect to marketing the research components of the L+M Center.

Lastly, the consumer environment is competitive. The Center clearly needs to achieve

NAPBC accreditation, and will need to pay attention to internal marketing strategies to

bring existing providers along. The process toward accreditation is burdensome and

requires the active engagement in several different specialtieseach of which may feel a

sense of ownership for breast cancer. Moreover, changes in existing practice on an

individual provider basis as well as changes in institutional culture (consolidating breast

cancer care in a new program) will be critical both to the initial creation of the center but

also for its sustainability and success.

Industry

Classification and definition of Industry

Breast cancer is the leading type of cancer in women with a prevalence of 123.1 per

100,000 women. It is also the leading cause of cancer deaths in women with a mortality

rate of 38.6 per 100,000 women (CDC, 2013). According to The National Cancer Institute,


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one in eight women will be diagnosed with breast cancer in her lifetime. The most recent

numbers available indicate that as of Jan 1, 2009, there were 2,747,459 women alive with

the disease (Breast Cancer.org, 2012). It is estimated that 226,970 women will have been

diagnosed with breast cancer and 39,510 will have died from the disease in 2012 (NCI

SEER, 2012). It is no wonder that with such prevalence, the National Cancer Institute

increased its spending from $572.6 million in 2008 to $631.2million in 2010 (NCI, 2011).

It is estimated that approximately $16.5 billion is spent in the United States each year on

breast cancer treatment (NCI, 2012).

The breast cancer industry consists of a multidisciplinary approach in management and

care of the patient. These disciplines can be categorized as sectors and include Research

and Support, Prevention and Assessment, Diagnostic Oncology, and Therapeutic and Post-

Procedural Oncology. Encompassing under these sectors are disciplines that vary in their

nature from support services, to surgical oncology, clinical trials, and rehabilitation

services. Studies have shown that these multidisciplinary approaches in patientmanagement have contributed greatly to increased survival rate amongst breast cancer

patients (NewsMedical, 2010).

Driven by an aging population and an increase in survival rates the demand for oncology

services is only going to increase. Currently 85% of cancer care is provided on an

outpatient basis, and hospitals will only face more competition for these services as more

providers and outpatient alternatives opt for greater focus on cancer management. As

patients have more access to information and consumerism is increasing, it is only natural

for health care providers to utilize a more coordinated approach to care delivery. Since

care is becoming increasingly more complex and multidisciplinary, physicians must alignwith the hospitals in order to fully develop a cancer program. Furthermore, advances in

technology such as targeted health therapy and new diagnostic tools will only result in the

need for development of new standard treatment modalities. To address such needs

hospitals are establishing partnerships with other institutions and marketing and building

on their respective strengths. It appears that accreditation will be the key differentiating

factor among the various cancer programs. Although participation in the accreditation

process is voluntary, some of the noteworthy organizations that are involved in the

accreditation and standardization process include the American College of Surgeons and

the National Cancer Institute.

Accreditation and Standards

The National Accreditation Program for Breast Cancers (NAPBC) was established by the

American College of Surgeons (ACOS) to ensure that standards of breast cancer

management were met and that quality care was awarded through specific scientific

validation and professional and patient education (ACOS, 2010). As highlighted above, as


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an accreditation body for multidisciplinary breast cancer centers, NAPBC requires 17

essential components and 27 standards of care and ensures that the criterion for each of

the disciplines is met (Figure 1). As highlighted in Figure 1, these components are diverse

in scope and include data management and patient outreach and education, research and

quality of life management, plastic surgery, radiation and medical oncology, among others.

In order to qualify, centers have to demonstrate compliance of 90% or more of the

standards of care, and meet all the essential components. In addition, to maintain

accreditation centers will have to undergo on-site reviews every three years and collect

and maintain data as part of their accreditation requirements.

Figure 1

Forecast on Breast Cancer Management

From 2009 to 2011 there was an increase in the incidence of breast cancer cases in thecounties of southeastern Connecticut and western Rhode Island by an average of 8.6%,

from a low of 6.7% increase in incidence in the Kent County of Rhode Island to a high

11.7% incidence in the New London County of Connecticut (see appendix). Forecasts for

the Northeast markets highlight a significant growth of breast cancer utilization over all

sectors with the exception of medical admissions that will see a drop of 6% due to greater


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hospice services and end-of-life care services. These areas of growth are due to advances

on multiple fronts including new and improved chemotherapeutics that will increase

survival, new tumor profiling and genetic assessment diagnostic tools, advances in

reconstructive surgery and restructuring of the costs for screening modalities like

mammography and MRI.

Existing Competitors

Three major competing cancer centers exist at the southeastern Connecticut area, including

the Backus Hospital Breast Center, Middlesex Hospital Comprehensive Breast Center, and

the Yale Smilow Cancer Hospital Breast Cancer Program. All three are NAPBC accredited

and have access to clinical trial and research studies. With the exception of Middlesex

Hospital, they are all American College of Radiology accredited breast imaging facilities.

The staffs at both Backus Hospital and Yale Smilow include radiologists that specialize in

breast imaging, while the ones at Middlesex are radiation oncologists. Both Backus and

Middlesex Hospital have a nurse navigator program integrated into their program.

Backus Hospital is a 213 bed hospital with a staff of 1800 people with about 300 expert

physicians offering a wide variety of health services (Backus About Us). At Backus Hospital

the medical director is also an associate professor at the Yale School of Medicine and the

radiation therapy for the center is also provided by Yale Medical School. However, Eastern

Connecticut Hematology Oncology and New London Cancer Center provide their medical

oncology services. The ancillary services provided by Backus include lymphedema

screening and treatment, social work, survivorship program, support group, and

alternative therapies like massage and reiki. On the other hand, Middlesex Hospitals

ancillary services include rehabilitation and distress management and hereditary risk

assessment program; while Yales support services include social workers, pastoral care,

nutritional guidance, physical therapy, and rehabilitation management. Lastly, Middlesex

Hospital also has a center for Survivorship and Integrative Medicine.

Potential new Entrants

Any center that offers breast cancer management and or treatment has the potential to be

competitive service provider. This includes any radiology center, medical consult clinics,

physician/surgery group, oncology centers, and research institutes. Any establishment,

small or large, can also serve as a potential competitor in providing ancillary services, for

example, private physical and massage therapists, private social workers/guidance

counselors, laboratories, and small individual private physician practices.


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Substitute Products or Services

Practitioners of allopathic medicine have seen increased competition from proponents and

practitioners of Complementary and Alternative Medicine (CAM) in all aspect of disease

and management, including cancer. A 2002 National Health Interview Survey found that

40% of cancer survivors have used CAM in management of cancer, with 18% using multipleforms of CAM (NCCAM, 2012). According to Patterson et al. (2002) women with breast

cancer are more likely to used CAM and accordingly the rate of CM use in women with

breast cancer has been reported to be as high as 75% (Wanchai et al, 2010).

The rising cost of healthcare in the United States has also led to a rise in the medical

tourism industry. According to the CDC, it is estimated that 750,000 U.S. residents travel

abroad every year for medical care (CDC, 2012). Medical Tourism Corporation, a Better

Business Bureau accredited business advertises low cost mastectomy procedures in

international destinations like India, Jordan, Mexico, South Korea, and Turkey (Medical

Tourism Corporation). A lot of these international hospitals have accreditation from Joint

Commission International, a U.S. based accreditation body that sets standards for health

care practice and management internationally (JCI, 2013).

Suppliers

Suppliers include the standard medical supply vendors that sell test tubes, drapes, syringes,

etc; and also companies that sell and maintain diagnostic and imaging equipment.

Furthermore, not only will the biotechnology and pharmaceutical sector, with their wide

modality of treatments (drugs, vaccines, etc.), be an important component from the supply

side, but also the health consulting and IT companies that provide bioinformatics, data, andtechnologic support for the latest research protocols and methodologies.

Buyers

The predominant consumers of these services are women who have been diagnosed with

some form of breast cancer or individuals with a family history of breast cancer.

Furthermore, more and more women are being proactive in managing and taking

preliminary actions in preventing the disease, for example screening, self-breast

examination and educating themselves about the disorder. Coupled with enhanced

diagnostic techniques and an aging baby-boomer population, the incidence of breast canceris only going to increase.

The L&M primary service area has a population of 174,000 with females making up 49.7%

of the total population. The female proportion is slightly lower than that of the U.S. and the

state of Connecticut, where the percentages are 50.7% and 51.2% respectively (U.S. Census

Bureau, 2010.). According to the 2010 U.S. census, 91.9% of the populace in New London


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County is insured with 77.1% having private health insurance and 28.2% having public

sector health insurance. This health insurance coverage of L&M primary service is higher

than that of the national coverage rate of 84.5% (U.S. Census Bureau, 2010).

Other health care professionals are also potential buyers of the services and products

offered by L&M Breast Center. These professionals may include primary care physicians orspecialists such as pathologists and oncologists that may refer their patients for imaging,

laboratory and therapeutic services not available in their clinic. In addition, biotechnology

and pharmaceutical companies may also seek consulting and specialty services to aid in

their research and product development, and in management and execution clinical drug

trials.

Summary of Industry Opportunities and Threats

With an increase in survival rate, an aging boomer population and advances in diagnostic

techniques, the demand for breast cancer center is only going to increase. Furthermore,the increase in sophistication and knowledge of the contemporary consumer will only add

to the demand for an NAPBC accredited center. These centers will not just be desired but

demanded as knowledge of accreditation, procedures, and accredited centers becomes

more main stream. Therefore improving the current standards and management is

warranted for L&M Breast Cancer in order for it to maintain its current market standing

and earn more market share in the breast care management services.

Reforms and rising cost of the U.S. healthcare in general, combined with an unsettling

economy, risks negatively impacting the development strategy of L&M Breast Center. With

the advent of medical tourism and CAMs offering cheaper alternatives, efficient marketingand management is warranted to minimize the loss of market shares from any of these

circumstances.

Implications for Marketing Strategy Development

Considering there are three competitors in the Southeastern Connecticut area, establishing

a marketing niche is vital to ensure success of the breast cancer center. This would require

consumer education of the role early diagnosis plays in improving clinical outcome of the

disease, improving patient teaching of drugs and their side-effects to improve patient

compliance, customizing patient management plans, and implementing a variety ofpayment options and health insurance plans. Although such strategies may be

concurrently employed by the other competitors, emphasizing patient outcomes and the

virtues of these implementations by providing data in advertisements may help in setting

L&M Breast Center apart from its competitors.


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Organization

Objectives and Constraints

L+M Breast Health Center will develop a comprehensive breast health program and a

coordinated approach to care delivery pertaining to diagnosis and treatment of breastdisease. Utilizing advances in technology, research and a newly formed partnership with

Dana-Farber Cancer Institute, L+M will deliver new treatment options for breast cancer

patients in eastern Connecticut and southwestern Rhode Island.

Currently, L+M has many components of comprehensive breast health program; however,

services are fragmented and there are opportunities to improve coordination of care

among disciplines. Also, the untimely access to care and results (diagnostic, lab or ancillary

procedures) has been an issue resulting in patients leaving the area. It has been observed

that lumpectomy and mastectomy surgical volumes have declined since 2009.

Financial Conditions

L +M Breast Health Program will get its annual operating budget from the projected

increased surgical cases, breast lumpectomy and mastectomy as well as with ancillary net

revenue such as lab testing, EKG, surgical reconstruction, outpatient physical therapy and

incremental physician revenue. In its early stage of operation (1-3 years), the funding will

be originating from the hospitals revenue from other division or other departmental

revenues. By Year 3 of operation, incremental volumes are expected to result in a positive

operating margin.

Other costs associated with the Center include staffing, medical director fees, accreditation

fees, education expense, marketing, information services support, and other physician fees.

Capital needs include equipment for linear accelerator to be purchased in Year 2 of

operation.

Management Philosophy

L + Ms management philosophy will be based on open communication and collaboration

amongst numerous physicians and staff. At L+M, the majority of leaders and employees

have taken a two-day seminar called Crucial Conversations that emphasizes and teaches

conversational skills. The tools learned at the seminar play into their managementphilosophy of keeping communication flowing and rich. Creating a positive work

environment and building strong relationships, especially between physicians, will

definitely play a role in the success of the Centers future.

However, there are some underlying issues with the program and its future management.

It is still unknown to whom the staff will report to because there is currently no manager


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for the program. The Medical Director is leading the charge, but it is unclear if she has the

skillset to run the operational side of the program. Furthermore, there are many other

Specialists playing key roles that have very strong opinions and are still evaluating the new

Medical Director. Getting consensus has been challenging and success depends on it.

Organization Structure

L+ M Breast Health Program will operate within L+M, a private, not-for-profit, acute care

hospital. A decision was made by the steering committee not to have the Center located in

the new Cancer Center due to the fact that benign breast disease is being treated as well

and there may be a stigma about going to a cancer center for care. The program will be led

by a Medical Director, Dr. Elizabeth Arguelles, a board certified surgeon. She started her

tenure at L+M in February 2012. The rest of the team is comprised of board certified and

fellowship trained breast radiologists; oncologists, pathologists, radiology technicians,specialized nurses and a patient navigator and coordinator. The Medical Director leads a

steering committee that includes a physician from each specialty, as well as the Director of

Planning, VP of Strategic Planning and the VP of L+M Physician Associates (employed

physicians). The committee currently meets once a month to develop the programs

policies and procedures and establish consensus amongst physicians.

Organizational Culture

The Mission and the Vision of L+M are to improve the health of this region and to provide

an innovative, compassionate and community-focused system of care to their patients andfamilies. L+Ms partnership with Dana-Farber, Yales Radiation Oncology group and the

launch of a Breast Health Center reflect these values toward providing their community

with top-notch medical care close to home.

The Breast Health Center will nurture frictionless collaboration and participation by

numerous physicians and support staff members that are vital to the success of the

program. It will provide ongoing training not only with the latest treatment, but provide

caring, compassionate and nurturing support group through the survivorship program.

Summary of L & M Breast Health Program Strength and Weaknesses

L+M has all the components to create a successful program, including their partnerships

with Dana-Farber Cancer Institute (DFCI) and Yale-New Haven Hospital to provide medical

and radiation oncology services, respectively. Furthermore, L+M is a designated Breast

Imaging Center of Excellence by the American College of Radiology in mammography,

stereotactic breast biopsy, breast ultrasound and ultrasound-guided breast biopsy.


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The perceived weakness were identified as the following: L+M may not meet volume

forecasts due to market changes, competitive factors that are more intense than

anticipated, and the internal structure envisioned for the program may fail before the

program is able to grow volume. Also, financial resources may play a role in the success of

the program, as the hospital will potentially lose 2.8 million this year (22 million over three

years) from reimbursement changes proposed by Connecticuts Senator. As a result

budgets for new and existing services line may be cut.


Competing with the three main competitors in the vicinity means much more than just

improving service. It is vital to have excellence across the board such as in the areas of

people, service, quality, finance, and growth. Therefore, the success of L+M Breast Health

Program will rely heavily in sustaining a culture of excellence by the organizations Board

of Directors/Medical Director, employees, and physicians. In this case, a well-qualified

Medical Director, a board certified surgeon, was selected upon careful and rigorous review

and eventually endorsed by The Physician Advisory Council (PAC). With this, a well-

produced video and warm welcome letter by the medical director should be incorporated

in almost all marketing strategies such as the use of the internet, brochure or multi media

campaign to emphasize the strength of the organization. A rigorous selection process will

be implemented in hiring a clinical manager and patient coordinator who has an important

role in the organization such as to expedite processes related to the breast diagnostic

process including communication, scheduling, referrals, patient support, and tracking of

data to name a few.

L+M will emphasize the organizational members/personnel in its marketing paraphernalia

such as mentioning its highly talented physicians (diagnostic radiology, pathology, surgery,

medical oncology, and radiation oncology), who are all productive members of this

community and are committed to the long-established tradition of community involvement

to raise awareness and perhaps funding for cancer research.

Photos portraying camaraderie of the organizations trained team of doctors, researchers,

nurses and healthcare professionals will be included as well in the marketing campaign

mentioned assuring the confidence of their community that they will be provided with

groundbreaking treatments on the healing edge of breast cancer treatment with acompassionate healthcare team. Along with this, L+M Breast Health Program will

emphasize its ultimate mission-to heal, to support the emotional well-being needed to the

patient and family and L+M Breast Health Program is the patients ally in the fight against

Breast Cancer.

Company Marketing Strategy


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In the era of the Affordable Care Act and established competitors that serve patients who

require breast healthcare, L+M needs a set of well-developed marketing strategies that can

provide the framework required to gain a sustainable competitive advantage as a

competitor in the breast healthcare provider market. According to Porter (2008),

competitive marketing strategies are defined along two dimensions: strategic scope and

strategic strength. Strategic scope is a demand-side dimension and looks at the size and

composition of the market you intend to target. Strategic strength is a supply-side

dimension and looks at the strength or core competency of the firm (Porter, 2008). In his

1980 classic Competitive Strategy: Techniques for Analyzing Industries and Competitors,

Porter simplifies the scheme by reducing it down to the three best strategies. They are cost

leadership, differentiation, and market segmentation (or focus). Market segmentation

is narrow in scope while both cost leadership and differentiation are relatively broad in

market scope (Porter, 1980). These three competitive strategies still hold true to their

element, and their principles have provided L+M a roadmap to create a strategic marketing

framework.

In the past L+M as a hospital has used several marketing techniques. L+M runs

advertisements in three local newspapers: The New London Day, which covers its primary

service area of New London, CT; The Norwich Bulletin, which covers its secondary service

area of Norwich, CT and The Westerly Sun, which covers its southwestern service area of

Westerly, Rhode Island.

In addition to newspaper advertisements, L+M marketing team also designs brochures that

are distributed to local Primary Care and Specialist practices by the Physician Liaison team.

The Physician Liaisons are responsible for building strong relationships with community

physicians and specialists. They also onboard new, employed physicians to the healthcare

community through one-on-one introductions, meet and greets and community outreach

(lectures.) The Liaisons play a vital role in the marketing of new service lines and

informing the physician community about new technologies and specialty services that will

help them better serve their patients (L + M Hospital).

L+M hospital uses the direct marketing technique of placing billboards around the New

London, CT area, preferably alongside major freeways for maximum visibility. L+M has

decided not to use the direct marketing technique of television because its cost prohibitive.L+M has invested in radio advertisements; however, it has not been able to measure the

return on investment in spending money on radio ads. L+M is actively using social media

such as Facebook and Twitter to engage its current patient population in meaningful

discussions where it features current hospital physicians and nurses. The Facebook page

has over 4,000 followers and over 400 twitter followers.


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L+M hospital marketing team has analyzed the strategic scope and developed a set of

marketing strategies that will provide it a sustainable competitive edge in the breast

healthcare market. Strategies focus on providing the targeted patient population the

highest value and quality of care, along with best patient satisfaction experience. The initial

focus will be to gain a presence in the breast healthcare provider market. The marketing

techniques being considered are as follows.

L+M Breast Cancer Center will use a dedicated service line logo to establish itsbrand (see below)

A dedicated web page:www.lmbreastcenter.orgwill also be launched and an effortwill be made to drive traffic to the site. The site will include the following:

Overview, Our Team, Locations/Call-to-Action tabs Patient Stories video module Patient satisfaction testimonials

Informative brochures for potential referring physicians and potential patients A multi media campaign will be launched in the form of:

Print ads Billboards

The Physician Liaison team will perform outreach with the medical director anddistribute brochures to inform referring physicians of the new service line.

Set up a series of community lectures by L+M physicians. Topic breast health andservices provided.

The Public Relations (PR) team will use the following platforms to perform outreachin the community:

Press Release and proactive media story pitch Facebook, You Tube and Twitter postings Feature story in L+M Magazine

To ensure employee knowledge of the new Breast Health Center L+M will launch aninternal communication campaign, which will consist of:

Feature story in hospital newsletters: Circulate, Inform and the PhysicianNewsletter

Internal signage in appropriate staff and physician areas and ads on TVmonitors

Objectives
http://www.lmbreastcenter.org/http://www.lmbreastcenter.org/http://www.lmbreastcenter.org/http://www.lmbreastcenter.org/


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The objective of the above stated marketing strategies is to increase the market share of

L+M Breast Health Center in the breast healthcare service industry. Reach maximum

amount of breast healthcare service recipients (patients). Reach maximum amount of

referring physicians.

Constraint

The campaign may not yield sufficient patient volume from physician referrals of existing

hospital patients, and potential referring physicians may have existing working

relationships with other reputable entities (competitors) within the New London, CT area.

Informative brochures and introductions with the Medical Director may not be enough to

change referral patterns, leading to less than effective results from the marketing

campaign.

Sales, Profits, and Market Share

New London County has the highest cancer incidence rates in the state of New England, CT.

There are 282 patients per year who are diagnosed with breast cancer in the New London

County. Lately, there has been a rise in the incidences of benign breast cancer. The surgical

volume for L+M has declined by almost 20%. In 2009 there were 160 cases, and in 2012

there were only 130. The focus of the marketing program is to increase the surgical volume

to 250 cases by the year 2018. This is a conservative estimate of a 5-year growth plan.

L+M Market Share Trends in Total Breast Healthcare Service Area

2009 2010 2011 2012

YTD

Lumpectomy 56.5% 58.8% 46.6% 47.2%

Mastectomy 25.7% 20.2% 20.3% 36.4%

The above stated statistics for lumpectomy show a decline of 9.2% in market share from

year 2009-2012. The mastectomy market share came up significantly after a 2-year decline

between years 2009-2012.

Target Markets

As previously mentioned, an understanding of market segmentation or focus markets is

very important to gain a sustainable competitive advantage. According to Porter (2008) a


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business can choose to compete in the mass market (like Wal-Mart) with a broad scope, or

in a defined, focused market segment with a narrow scope, such as the case of breast

healthcare provider service, in either case, the basis of competition will still be either cost

leadership or differentiation. In adopting a narrow focus, the company ideally focuses on a

few target markets (also called a segmentation strategy or niche strategy). These should be

distinct groups with specialized needs (Porter, 2008). The breast healthcare service

recipients are a distinct group and a niche market with specialized needs. To capture

maximum share of this niche market, the focus of L+Ms Breast Healthcare Center will

remain on providing high patient satisfaction experience, and value driven quality of care.

L+Ms current primary service area consists of a population of 174,000, and out of which

49.7% are females, and within the female population service recipients are predominantly

Caucasian with a small percentage of African-American and Hispanic females. As previously

mentioned, the highest populations prone to breast cancer are African-American and

Hispanic, women.

Below is a breakdown of the L+M total primary service area and target adult female

population, obtained through the US Census 2010.

Total population primary service area 174,000 100%

Total female population 86,478 49.7%

African-American female population 5488 3.1%

Hispanic female population 8128 4.6%

Caucasian female population 36,234 41.9%

Currently L+M hospital is not using demographic information to target specific

population(s) as part of its marketing strategy. However, the GWU marketing team sees

great value in using demographic data analytics to target focused markets to reach out to

potential new patients in an expeditious manner. This technique will be discussed with

L+M marketing team in the future.

Marketing Mix Variables

Product and Place

In the fall of 2013 L+M will open a new Cancer Center in affiliation with Dana-Farber

Cancer Institute in Waterford, CT. L+M is launching the Breast Health Center to treat both

benign and malignant breast disease. This new initiative will allow patients to get their

cancer treatment in a timely manner, and conveniently at one place. The goal of the new

program is to elevate the level of care provided to patients throughout the continuum of

care. From diagnosis to post-treatment care, patients treatment will be expedited,


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individualized, and coordinated among a multidisciplinary team, which will include

support services, surgical oncology and rehabilitation services.

Price and Promotion

As stated earlier, according to the National Cancer Institute, cancer care cost the American

public $104.1 billion in 2006, with the largest portion, $13.9 billion, contributed by breast

cancer. L+M is a not-for-profit organization and it plans to capture maximum market share

by offering affordable, competitive prices to its customers (direct customers or insurance

companies). As stated above L+M plans to use several marketing techniques to promote its

new breast care center. L+M plans to include a dedicated service line logo, a user-friendly

website, print ads in newspapers, billboards, brochures, internal marketing and social

media.

Summary of Marketing Strategy Strengths and Weaknesses

Strengths

L+M Hospital is focused on leveraging its well-established name and branding the Breast

Care Center as a state of the art service line. The hospital plans to use established

techniques that have assumingly led to previous successes in business development. Social

media such as Facebook and Twitter have been a good way to reach younger and middle

aged clients. Currently L+M has over 4,000 Facebook followers and over 400 Twitter

followers.

Weaknesses

Based on our analysis L+M is not using any demographic analytics as part of its marketing

techniques. The target population for the breast care center (African American or Hispanic

women) is not well defined. L+M is currently not using performance measurement metrics

to determine whether a marketing technique has been effective or not, for example radio

advertisements. At this time, there are no marketing techniques listed in the plan to use

search engines such as Yahoo, Google, Safari or Bing to promote the Breast Care Center as a

leader in providing breast healthcare service in the New London, Connecticut area.


L+M Hospital has several marketing techniques that it has used in the past. It has used

print ads, billboards, brochures, the Physician Liaison team and social media to promote

the Hospital and new service lines. L+M plans to use the same techniques to promote the

new Breast Health Center. Print ads, billboards and social media will be used. The Physician


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Liaison team will perform outreach with the Medical Director and distribute brochures to

inform referring physicians of the new service line. Community lectures will be set up to

inform the community about breast health and the new center. In addition to the external

campaign L+M Hospital will also market internally. The goal is to promote internal buy in

of physicians as well as other stakeholders. This will be accomplished by featuring a story

in the hospital newsletters: Circulate, Inform; as well as placing signage in appropriate staff

areas.

Currently L+M hospital does not have a way of measuring the effectiveness of the various

marketing techniques that it is using. There are no measurable metrics to show which

technique is the best, or the least efficacious. L+M Hospital has a target volume that it

would like to meet, but it does not know which of the marketing techniques is either

increasing or suppressing its target volume goal. Lack of having a marketing analytics

approach can lead to bad decision-making and a waste of marketing budget allocation.

The total population in L+M Hospitals primary service area is 174,000. Out of this, 49.7%

are females. 3.1% are African American females and 4.6% are Hispanic females. As stated

earlier, the highest incidence of breast cancer is among the Hispanic population; L+M

hospital lacks the use of demographics to target this particular population. The GWU team

believes that this is an important group to target and it will work with L+M to develop this

further.

Currently L+M marketing team also out sources some of its marketing capabilities to a

marketing company called Outthink. L+M marketing team will work with Outthink to

ascertain needs to promote internal buy in from its staff and its physicians. The Medical

Director of the new Breast Health Center can also improve buy in for the center, by visiting

with the staff as well as with the primary care physicians.

SWOT/ Strategic Capabilities Analysis

Strengths

L+Ms strengths in developing a comprehensive Breast Health Center include their strategic

plan to strengthen oncology and surgery service lines, their comprehensive vision of the

center, and their newly created affiliation with Dana-Farber Cancer Institute (DFCI).

One of L+Ms strategic priorities is to grow and expand oncology and surgery service lines.

As of January, L+M has a new Chief of Surgery who is determined to improve and elevate

the surgical services offered by L+M. In September of 2013, L+M is opening a new cancer

center in affiliation with Dana-Farber Cancer Institute, which will offer patients access to

clinical trials and the advancement of evidence-based medicine. L+Ms relationship with a

world-renowned cancer institution provides the community with world-class cancer care,


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close to home; no longer will patients and families have to drive two hours to Boston or

New York.

L+Ms steering committee, led by the Medical Director, is working on gathering the data to

achieve program accreditation with the National Accreditation Program for Breast Centers

(NAPBC). Accreditation by NAPBC will raise awareness of L+Ms comprehensive programand demonstrate their commitment to a multidisciplinary approach to care. In addition to

accreditation, the programs business plan proposes a number of enhancements to L+Ms

breast health services including pre-treatment conferences, access to clinical trials, and

patient navigator and coordinator services.

Weaknesses

Developing a new center of excellence requires significant collaboration and participation

by numerous physicians and support staff. Services are currently fragmented and are

located in multiple buildings and practices. Furthermore, the physicians interests andneeds must coincide with the hospital in order to fully develop a program. For example,

besides aligning the radiologists and surgeons, there are two competing oncology practices

that need to come to consensus regarding the direction of the program and implementing

new policies and procedures.

Securing physician support and cooperation from key members and other specialists, has

been a challenge for L+M. Changes in procedures, like who is responsible for

communicating to patients they have cancer, has caused some tension amongst specialists.

In the past Radiologist shared that information with the patients, but under new

procedures the referring physician, like primary care or obstetrician, will be responsible.

Another area of concern is being able to coordinate care and timing of care between the

different disciplines. Timely access and delayed results have been an issue and the

perception is residents are leaving the market for care as a result. Flexibility in scheduling

is required to accommodate timely visits; L+M is currently working on this initiative.

Lastly, L+Ms breast surgery market share has declined 15% since 2009 due to loss of three

surgeons coupled with competitor initiatives. One of the female surgeons moved to a local

competitor and she continues to receive referrals from L+Ms two largest female primary

care practices.

Opportunities

L+M has many opportunities to successfully implement a new Breast Health Center. The

demand for oncology services is growing in L+Ms primary service area, driven by

population growth, aging and an increase in survival rates.


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Increasing patient access to information and offering coordinated care through timely

appointments, individualized treatment plans, and a multidisciplinary approach will

improve patient care and differentiate L+Ms Center.

L+M also has the opportunity to improve collaboration among physicians and create a

more comprehensive, streamlined service line. Furthermore, by defining the value ofprogram (high tech, high touch, high quality) to patients, as well as referring physicians,

will lead to changes in referral patterns.

With a successful marketing campaign and well-coordinated team approach to breast

health care, L+M can increase their breast surgery volume and market share. In turn, this

will also create downstream volume and revenue. The incremental volumes are expected

to result in a positive operating margin by Year 3 of program operation.

Threats

Increased competition is L+Ms biggest threat and its not only from other hospitals, but

outpatient centers as well. As more providers and outpatient alternatives focus on cancer

care, hospitals will face more competition for these services. The main competitor

hospitals, Backus Hospital Breast Center, Middlesex Hospital Comprehensive Breast Center,

Yale Smilow Cancer Hospital and others capture 31% of L+M primary service area market

share. This is does not include the percentage of patients that leave the state to go to

Boston or New York City for their cancer care.

Another threat to the Breast Health Centers success is physician loyalty. Primary care

physicians make up the majority of the referral base and many have existing allegiances tophysicians that may not be affiliated with L+M. It is difficult to change long-standing

referral patterns and L+Ms new Breast Health Center will need to demonstrate

comprehensive and coordinated services and clinical distinction.

Not only is physician loyalty a potential issue, the Association of American Medical Colleges

(AAMC) Center for Workforce Studies claims that the projected demand for Medical and

Radiation Oncologists is going to far exceed the supply by 2025. (Dill, et al., 2008) L+M

currently has strong relationship with their Medical and Radiation Oncologist, but its

important to understand the future directions of these Specialties.

Finally, to control the rising cost of healthcare, state and federal governments, as well as

private insurance companies, are going to squeeze reimbursement rates. This will require

L+M to work lean and efficiently to provide highly coordinated care. Using a

multidisciplinary team approach can help achieve these goals and improve patient

outcomes.


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SWOT

Strengths Weaknesses

Affiliation with Dana-Farber Cancer Institute Physician buy-in questionable

Strategic priority to grow oncology and surgery service lines Lack of scheduling flexibility

Working on accreditation with the NAPBC Market share declined since 2009

All services are not in one building

Opportunities Threats

Improve patient access to information Increased competition

Coordinate care Physician loyalty

Define value of the program Workforce shortages

Improve collaboration among physicians Reimbursement squeeze

Increase breast surgery volume and market share

Create downstream volume and revenue

Summary

L+Ms proposed Breast Health Center aims to elevate the level of care breast health

patients receive and to provide treatment that is individualized and coordinated among a

multidisciplinary team. The program also aligns with L+Ms strategic vision to grow their

oncology and surgery service lines. Through research analysis, the GW team found that the

high incident rate of cancer and the demographics of the population in the primary service

area warrant a comprehensive center for breast health.

L+M is also faced with tough competition, with three accredited breast centers within a

fifty-mile radius, looking to increase their market share. It is anticipated that the

partnership with Dana-Farber Cancer Institute, the opening of a new Cancer Center this

September, the hiring of three new general surgeons and the anticipated accreditation of

L+Ms program in early 2014, will result in an increase in market share, as well as surgery

and ancillary volumes.

With the Situation Analysis complete, the GW team hopes to create a strategic marketing

plan that will distinguish L+M from their competitors and will target both physicians and

the community. Establishing physician and community awareness and confidence in the

services provided will be key components to the success of the program.


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APPENDIX

Financial Profit and Loss Statement, L+M Hospital Breast Center (Shraddha Patel, Director of

Planning)

Lawrence & Memorial Hospital Volume Projections

Project: Breast Center year 0 130

Forecasted Profit and Loss Statement year 1 130

year 2 180

Assumptions: year 3 230

Incremental to FY 2012 volume year 4 240

Based on "Anticipated" Volume Projections year 5 250

Year 1 = FY 2013, Year 2 = FY 2014, etc.

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Year 1 Year 2 Year 3 Year 4 Year 5 Total

Volume Rate per

Procedure

Incremental Surgical Cases - Breast - 50 100 110 120 380 3,720$ 130 cases in FY 2012

Incremental Physician revenue 50 100 110 120 380 594$

Total - 50 100 110 120 380

Ancillary Volume

EKG - 7 14 16 17 54 28$ 14% of all cases

Lab - 50 100 110 120 380 50$ 100% of all cases

Imaging - - - - - - 283$ 0% of al l cases Ul trasound and Mammo

Surgical Reconstruction 12 23 25 28 88 1,500$ 23% of all cases Rate is contr ibut ion margin

Outpatient Physical Therapy - 8 15 17 18 57 400$ 15% of all cases

Average Rate/Case w/ Ancillaries -$ 4,774$ 4,774$ 4,774$ 4,774$ 4,774$

Total Net Revenue -$ 238,708$ 477,416$ 525,157$ 572,899$ 1,814,180$

Operating Expenses

Direct Expenses

Salaries & Wages 35,360$ 122,720$ 122,720$ 122,720$ 122,720$ 526,240$

Professional Fees 35,700$ 35,700$ 35,700$ 35,700$ 35,700$ 178,500$

Cosmetic Fee -$ 23,077$ 46,154$ 50,769$ 55,385$ 175,385$ 2,000

Non Salary 17,008$ 76,346$ 121,683$ 132,551$ 138,418$ 486,005$

Total Direct Expenses 88,068$ 257,842$ 326,257$ 341,740$ 352,223$ 1,366,130$

Indirect Expenses

Fringe Benefits 9,547$ 33,134$ 33,134$ 33,134$ 33,134$ 142,085$ 27% % of total salaries

Other Indirect 8,807$ 25,784$ 32,626$ 34,174$ 35,222$ 136,613$ 10% % of total direct expensesDepreciation -$ 350$ 700$ 700$ 700$ 2,450$

Total Indirect Expenses 18,354$ 59,269$ 66,460$ 68,008$ 69,057$ 281,148$

Total Operating Expenses 106,422$ 317,111$ 392,717$ 409,748$ 421,279$ 1,647,277$

Operating Income (Loss) (106,422)$ (78,403)$ 84,699$ 115,409$ 151,620$ 166,903$

Cumulative Income (184,825)$ (100,126)$ 15,283$ 166,903$

Base Annual

Salary Detail: Salary Increase

Nurse Navigator 35,360$ 70,720$ 70,720$ 70,720$ 70,720$ 70,720$ 70,720$ 0.0%

Data Extractor -$ 52,000$ 52,000$ 52,000$ 52,000$ 52,000$ 52,000$ 0.0%

-$ -$ -$ -$ -$ -$ -$

35,360$ 122,720$ 122,720$ 122,720$ 122,720$ 122,720$

Non Salary Detail: Rate per

Procedure

Estimated Cos t/Surgical Case - breas t -$ 54,338$ 108,675$ 119,543$ 130,410$ 1,087$ Includes staff in OR

Accrediation Fees -$ 4,000$ -$ -$ 2,000$

Education Expense 1,000$ 2,000$ 2,000$ 2,000$ 2,000$Marketing 15,000$ 15,000$ 10,000$ 10,000$ 3,000$

IS support 1,008$ 1,008$ 1,008$ 1,008$ 1,008$

Medical Director 35,700$ 35,700$ 35,700$ 35,700$ 35,700$

Subtotal 52,708$ 112,046$ 157,383$ 168,251$ 174,118$

Years of

Depreciation: Amount Service

Breast Board -$ 350$ 700$ 700$ 700$ 7,000$ 10

Notes


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Primary (Green) and Secondary (White) Services Areas

Incidence of Breast Cancer (Shraddha Patel, Director of Planning)

County 2009 Incidence 2011 Incidence

New London (CT) 263 282

Windham (CT) 102 114

Middlesex (CT) 170 187

Washington (RI) 107 115

Kent (RI) 118 126


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Activity Timeline, FY 2012 FY 2014 (Shraddha Patel, Director of Planning)

FY

2012FY 2013 FY 2014

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Physician

Planning

Meetings

Business Plan

Development

Board

Approval

NAPBC

Accreditation

PlanningStaff

Recruitment(1)

(Navigator,

Coordinator)

Media/PR

Campaign

NAPBC

Application

Filing/On-

Site Survey

Breast Prog.Leadership

(BPL)

Meetings

Quarterly

Business

Development

Meetings


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References Cited:

Advisory Board Web Site. Available at:http://www.advisory.com. Accessed February 25,

2013.

American Cancer Society. The Affordable Care Act: How it helps people with cancer and

their families. 2010, American Cancer Society, Inc. No.560000 REV. 05/11

American Cancer Society. Cancer Facts and Figures 2012. Atlanta, GA: American Cancer

Society; 2012. Available at:

http://www.cancer.org/research/CancerFactsFigures/CancerFactsFigures/cancer-facts-

figures-2012.

American College of Surgeons. Cancer Programs. Accessed at: http://napbc-breast.org/

American College of Surgeons (Nov. 2010). National Accreditation Program for Breast

Centers. What is NAPBC? Retrieved fromhttp://napbc-breast.org/about/what.html

Association of American Medical Colleges (AAMC) Center for Workforce Studies.Forecasting the Supply of and Demandfor Oncologists. A Report to ASCO From the AAMCCenter for Workforce Studies, March 2007.

Backus About Us. For more than 117 years, Backus Hospital has provided quality

healthcare to the residents of eastern Connecticut. Retrieved from

http://backushospital.org/about-us.html

Baralt, L, Weitz TA. The KomenPlanned Parenthood Controversy: Bringing the Politics of

Breast Cancer Advocacy to the Forefront. Womens Health Issues 22-6 (2012) e509-e512.

Breast Cancer Action. Inequities and Social Justice. Accessed at: http://bcaction.org/our-

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