HCM FPX 5312 Assessment 3 Analyzing the Impact of the External Healthcare Environment on an Organization

Executive Summary/Abstract

Write in detail an introduction to the Course Project in a single paragraph. This is the last component written. Be sure to delete these instructions before submitting for Assessment 5.

Organization Overview

The Appalachian Regional Healthcare System (ARHS) is critical to providing healthcare services to the rural populations of Appalachia. Dedicated to providing greater access to quality healthcare in the underserved areas of the region, ARHS has established hospitals, clinics, and specialty services across various rural communities (Appalachian Regional Healthcare, 2024). Part of the spectrum of services provided to populations with limited access to healthcare, ARHS covers a broad range of primary and emergency care, management of chronic diseases, and community health services. As is the case with many rural healthcare systems, ARHS has considerable challenges that impact its services and the system’s sustainability.

ARHS deals with multiple challenges when attempting to staff medical vacancies. Its rural location offers less appeal when compared to urban alternatives. The vacancy impacts multiple important medical services, including the Emergency and Surgical Departments (Pourmand et al., 2023). To mitigate some of the impacts of staffing issues, ARHS may look to fill some of the gaps with locum tenens doctors and further develop their telemedicine services to aid patients in accessing services that are currently unavailable in person. ARHS also struggles with the impacts of regulations on a rural health care system. As new regulations come into play, costly updates to systems are required. Non-profit rural hospitals can find this to be quite burdensome (Aguirre et al., 2020). ARHS may find some relief in telemedicine as it provides a valuable service that meets regulations and may require less costly updates. When combined with available grants for rural health care, ARHS may be able to implement telemedicine with less fiscal burden.

ARHS also faces challenges with patient retention and the need to diversify revenue. Patients are moved out to urban centers for care that ARHS does not offer. This means that patients who should be retained move ARHS further into the negative financially. This creates a compounding negative cycle as services that move patients out financially also lead to the further loss and closing of ARHS’s services (Bem et al., 2019). Use of telemedicine helps ARHS offer additional services, helps meet the retention of patients, and offers financial stabilization. Rural hospitals also gain additional revenue through incentive programs when innovative services, such as telemedicine, are provided to meet healthcare needs.

This project seeks to expand ARHS’s recruitment, retention, and regulatory compliance efforts through the development of a Comprehensive Telemedicine Program. Tele-ED services would offer emergency care consultations and allow ARHS to sustain emergency department (ED) functions with a minimal emergency on-call staff. ARHS would then be able to create additional virtual special service clinics (cardiology, neurology, mental health, etc.) through telehealth that would ultimately decrease patient out-migration. The program would also enhance telehealth staff training, thereby improving the efficiency of ARHS’s limited staff resources.

PESTLE Analysis

The ARH System’s varied external factors impacting its operations and strategy can be examined through a PESTLE framework. ARH must comply with Medicaid, Medicare, and the ACA, and their associated regulations. Telehealth and funding to serve the underserved in rural areas are within the scope of Rural Health legislation. Changes in how rural health legislation is designed and funded directly affect ARH’s ability to operate. It can either support and enhance the resources ARH has to work with, or it can restrict and deplete them. Within Appalachia, ARH focuses its efforts where they are most needed.

The decline in the coal mining industry has created economically impoverished service areas with unstable economies. Most of ARH’s patients are insured by government programs, which benefit the patient, but not the provider, due to low reimbursement. ARH is the largest employer in southeastern Kentucky and maintains economic support and stability by providing income and employment to the community. ARH must balance the need to serve the community with its need to remain financially sustainable. Uncompensated care creates additional funding gaps for ARH and further strains this balance.

Socially, ARH focuses on a defining health issue of the Appalachian region: chronic diseases and substance use disorders. With its commitment to improving the health and wellness of communities, ARH is socially aligned on this issue. There are barriers created by stigma surrounding mental health in the region, which are further complicated by the predominant culture of resiliency in Appalachia (Swan et al., 2020). By integrating the culture of Appalachia into its programs, ARH is successfully building the trust and participation of the community, which is helpful in providing the needed mental health services. ARH is also responding to the aging population of the Appalachian region by expanding services to include geriatric care and chronic disease management, which is aligned with the organization’s mission.

From the perspective of technology, telehealth is a viable option for ARH to overcome some of the challenges created by geographic isolation for many of the communities it serves. Telehealth would allow ARH to provide needed specialty services where there are currently gaps due to a shortage of physicians. Many of the services provided by ARH are reliant on the use of an electronic health record system. Although there are other costs associated with the use of the system, ARH is able to more effectively manage its resources and improve the health of the community by implementing focused programming based on the assessments done by the organization (Appalachian Regional Healthcare, 2024).

Legal and environmental issues affect how ARH constructs its plans for the delivery of healthcare services and how it strategically operates in the future. From a legal perspective, ARH must address the significant operational challenges associated with healthcare laws that require the organization to manage the privacy of patients, the legal and medical staff credentialing, and the legal standards for healthcare facilities (Gharra et al., 2022). As a healthcare nonprofit, ARH has the responsibility of balancing the nonprofit’s mission of serving the community and ensuring the financial viability of the organization, for which it is offered some legal safeguards. Changes in legislation, such as Medicaid expansion and adjustments to the policy on telehealth, have a direct effect on ARH’s allocation of resources and long-range planning, and as such, the organization must stay abreast of the regulations to know how best to remain flexible (Anawade et al., 2024). Regionally, ARH has to provide healthcare services to remote, mountainous regions with limited access that require telemedicine to address healthcare service availability. Issues such as the environmental effects of coal mining have resulted in ARH specializing its healthcare services to address the occupational health problems created by the region.

To address the above challenges, ARH has focused on the use of telemedicine to become the preferred method of service delivery to the patients to improve the accessibility of healthcare services and reduce the operating costs. Telemedicine has also been used by ARH to address the staffing and accessibility issues of providing adequate health services to the patients (Tresenriter et al., 2021). Cultural adaptability is a key focus of ARH, which has used telemedicine to address the accessibility issues of health services. ARH is committed to educating the patients and improving their acceptance and trust of the healthcare services provided.

Telemedicine will allow ARH to offer specialty care while easing financial burdens, strengthen its efforts to provide first-class care to its underprivileged populations, and help the organization preserve its clientele (Tresenriter et al., 2021). With this kind of solution, ARH will have the opportunity to lead the API region’s healthcare access and innovation, aligning its purpose with advancing and improving the health of its communities.

The Appalachian Regional Healthcare System (ARHS) hospitals serve the rural and underserved Appalachian population who face financial and chronic health challenges due to aging and lack of health insurance (e.g., Medicare, Medicaid) coverage. Due to the rural location, ARHS faces challenges to its external network supply. Both pharmaceutical and telemedicine technologies are essential to ARHS’s sustainability (Appalachian Regional Healthcare, 2024). Unreliable government-insured revenue causes an unfavorable impact on the economy that ARHS is trying to address with the telemedicine initiative. An urban health system and telemedicine provider competition applies, but ARHS has established loyalty from its client base through culturally sensitive care.

With the right combination of grants and strategic partnerships with academic and community-based organizations, ARHS will strengthen its health services and workforce. The internal stakeholders for ARHS’s strategic and operational compliance positions are the healthcare employees and board members, while external stakeholders are the patients, local government, other advocates for healthcare, and funders (Appalachian Regional Healthcare, 2024). The primary laws that support the funding and provision of services are HIPAA and the Medicare Telehealth Parity Act. The policy review that ARHS conducts allows the organization to be proactive to changes in the law, changes in the reimbursement for telemedicine, and changes in other policies that affect rural healthcare, in an effort to protect the financial sustainability of ARHS and the services it provides.

Theories, Models, and Practices

Analyzing the external healthcare environment of the Appalachian Regional Healthcare System (ARHS) requires integrating a number of models and theories. The PESTLE analysis considers Political, Economic, Social, Technological, and Legal impacts on ARHS and helps assess critical external operational factors. From a political and economic perspective, ARHS funding comes from Medicaid and Medicare. As these are government-sponsored programs, ARHS has to adopt certain legislation and policies at the state and federal levels, which affect funding of rural health. In addition to the above-mentioned approaches, one can employ Porter’s five forces model, cited below, to assess competitive pressure from urban healthcare services and to modify revenue structures to reduce such competitive threats (Pangarkar & Prabhudesai, 2024).

The healthcare service delivery model of ARHS caters to client populations with high prevalence of chronic diseases. Leininger’s Transcultural Care Theory aids the extension of the services model to offer culturally and linguistically appropriate services to address social determinants of health specific to the rural population (Petiprin, 2024). The area of focus is Telehealth, and Rogers’ Diffusion of Innovations Theory, which makes the implementation of Integrated Rural Health Systems (IHRS) more amenable, describes a model with four stages of technology adoption (Ledger & Bakhai, 2021). Stakeholder Theory is also applicable to ARHS to enhance the understanding of the internal and external relationships.

When constructing retention policies to keep healthcare personnel in rural areas, models such as Herzberg’s Motivation-Hygiene Theory can be utilized on the internal level (Lee & Lee, 2022).

On the external front, creating good working relationships with community-based organizations, healthcare advocacy groups, and grant makers will optimize resources from ARHS and create a good working environment for community health. This will also help fulfill the health needs of the Appalachian people and help maintain faith in ARHS’s ability to fulfill these needs to the funders and stakeholders. It will also help ARHS maintain health equity in the region and organizational and healthcare equity. Finally, ARHS’s innovative revenue model and supply chain help operationalize value-based care and Lean Six Sigma.

Value-based care considers the specific needs, desires, and values of patients, especially in the context of providing care to rural patients with many chronic illnesses. Rural patients make up a big portion of the patients that the Centers for Medicare & Medicaid Services (2024) serves. The Triple Aim of Healthcare (improvement of the patient experience, improvement of population health, and lowering the cost of healthcare on a per capita basis) gives ARHS telehealth and wellness services a clear framework, while also offering protection against revenue swings and calm population outmigration (Institute for Healthcare Improvement, 2024). The combination of Lean Six Sigma with the Deming cycle of PDCA aids in eliminating waste in the healthcare supply chain and promotes the timely delivery of medical supplies and equipment to the remote, rural healthcare centers (Barr & Brannan, 2024).

The Compliance Program Effectiveness (CPE) model supports ARHS in optimizing and sustaining critical, compliance-related funding to serve the changing regulatory landscape and support the provision of high-quality healthcare in the existing regulatory framework. The uncertainty of funding, especially government funding, combined with inadequate staffing and the lack of support for the improvement of ICT in rural areas, creates significant challenges for ARHS in offering telemedicine. ARHS is trying to solve these challenges through multiple funding sources like grants and telehealth service partnerships, offering digital literacy training, and using telemedicine for specialty services along with investing in compliance and service delivery training to sustain the regulatory requirements.

Market Data Analysis

In order to address the aforementioned challenges and opportunities regarding service delivery in ARHSs, a comprehensive health care market analysis is imperative. Relative demographic user data includes: the population of the geographic area, use rates of health care facilities, patient health data and outcomes, and health care providers. This data may also include: employment and income status with literacy levels as well as the factors of digital readiness and coverage along with insurance densities that may assess health care accessibility and identify health care access gaps that may be addressed through innovations such as telehealth. Additionally, ARHSs are challenged to assess the services and develop the means of service delivery to meet the needs of the health care population that is underserved and that may benefit from telehealth. The required data may be drawn from a variety of sources to capture a more integrated perspective across disciplines. ARHSs will be able to implement changes in service delivery and assess innovations in service delivery using the data from their electronic health record and patient satisfaction surveys (Jacobs, 2021).

The CDC, HRSA, and U.S. Census sources provide generalizable data on population health outcomes and socio-demographic characteristics (Centers for Disease Control and Prevention, 2022). In addition, services like IMS Health and government services like Medicaid and Medicare provide analytics on the rural healthcare market, including their status, cost, and what the market considers the reimbursement retail price. Concerning the rural healthcare market, the Association of American Medical Colleges (AAMC) and Licensing Boards offer reports about the availability of the workforce that ARHS will find useful.

This incorporates a variety of EHRs, epidemiological and economic data, and telehealth data and helps to better understand the patients’ needs and the gaps in service delivery. The insights derived from the data enable the ARHS to use the integrated data to develop resource allocation recommendations. This integrated data is analyzed across various data sources over time, allowing the ARHS to identify shifting trends and adjust services to meet the needs of the Appalachian residents. Refocusing the analytical boundary to the data level, opportunities and threats can be identified, and the future of the ARHS can be developed and better informed to provide rural areas with the best healthcare and achieve optimal efficiency and sustainability.

Within the ARHS, the identification of supportive and contradictory information (of various forms) from the different functional and strategic performance perspectives is vital. The accompanying data from the U.S. Census Bureau show that the population in southern rural Appalachia is growing and there is an increasing demand for healthcare, particularly in the prevention and management of chronic illnesses. There are increasing Census reports of the aging population and the growing numbers of the elderly, who are more susceptible to chronic illnesses and who will increasingly seek consultation from healthcare specialists.

Moreover, indicators of economic value attest to a positive effect from greater use of telehealth called the “underserved” effect. This outcome is synonymous with the value-based care model adopted by most health systems today, as this model concerns itself more with the methods of care delivery and the prevention of care.

However, inconsistency of information relates to the challenges that ARHS has to deal with. Therefore, analyzing the economic data of the region, it can be stated that the major part of the population is underinsured and a large part of the population is uninsured as they are unable to purchase health insurance. This is due to the phenomenon that the population of low-income and developing countries is being excluded from health care, which could possibly affect the organization’s optimal use of its resources. In addition, since the goal of ARHS is to eventually maximize population coverage with telehealth services, the initial investment and ongoing operational support of telehealth services can be costly. Once that coverage is reached, the goal of ARHS will have been accomplished, and the telehealth system may prove to be a financial burden to the organization (Saharkhiz et al., 2024). There is also some disintegration, such as the rural population who do not have sufficient internet to be able to use the telehealth system and the elderly who do not have sufficient technological competence. These disparate findings suggest that ARHS, in order to respond to the healthcare opportunities and challenges, has to employ a pluralism strategy.

The interdisciplinary forecast helps ARHS understand the efficiency of markets through the lens of economics, public health, and technology. With the information from the household composition, ARHS can identify the segments in the composition and the target segments of the population for the provision of health services. For example, if there is a trend to an increasing number of one-adult households, more social and other forms of care will be needed. Additionally, there is a decline in the employment of given economic sectors and patterns of individual household members’ health care expenditure, which implies that ARHS should consider changes to the health care services that they provide (Murphy & Turner, 2023). If ARHS analyzes these different areas of perception, they will be able to understand their environment better to make timely decisions to improve their services.

Evidence-Based Strategies

ARHS must execute its mandate in an environment characterized by volatility in funding, scarcities in human resources, challenges in the integration of technology, and meeting regulatory requirements. Given the demographic and financial characteristics of the rural Appalachian region, ARHS can be optimistic about improving service delivery and organizational outcomes. Given the challenges that ARHS faces in this environment, it should develop a management plan to address the challenges as well as the estimated opportunities.

ARHS can improve its organizational structure and subsequently the health of its patients by applying the tenets of evidence-based practice. The development of telehealth systems has the potential to address the workforce shortage and the barrier of access to care. This development resonates with the existing national emphasis on the expansion of telehealth in rural areas. With the implementation of telehealth, ARHS will be able to provide specialist consultations that will require patients to travel significant distances, and in some cases not travel at all. The challenges to telemedicine have been addressed, and it has been shown that this technology improves access to care and encourages the active participation of patients in the management of their chronic illnesses (Valdes et al 2022). It has also been shown that ARHS can collaborate with telehealth technology vendors to reduce the barriers of technology and staff to the organization while providing training to the patients on how to use the technology.

This strategic initiative would see ARHS establish itself as the first company in the region committed to the efficient and effective delivery of healthcare and the improvement of the quality thereof. This would also see ARHS become the regional authority on innovative healthcare delivery and the maximization of patient outcomes.

Since most government agencies are grant-dependent, ARHS should take into consideration moving beyond government funding by engaging private funding, entering contracts with local businesses, and/or generating funds via viable products and services such as a temporary health check. Research has shown that when organizations seek alternate funding sources, their finances improve and they are better able to manage economic fluctuations (Fleming et al., 2020). The ‘dating’ of the private sector and a constant search for grant funding for rural health can diversify the funding sources available to the ARHS. Furthermore, the establishment of preventive healthcare programs meets community needs and gives organizations the ability to attract funding from insurance companies and government agencies. This would further diversify the funding sources of ARHS and improve the financial situation of the health center.

To attract and retain healthcare providers, ARHS must implement professional workforce development. This could include signing Memoranda of Understanding with local universities to create rural health residency and internship placements. More contact with rural healthcare during medical training increases the likelihood of graduates practicing in those communities. Improving demand for healthcare provider positions can be accomplished through fair salaries, the ability to transfer to other cities, and practicing career advancement with ARHS. Sun et al. (2024) stated that hiring also addresses the staffing shortfall and improves the variety of care available to the patient. This will increase the operational ability of ARHS and the sustainability of the healthcare provided.

ARHS has the telehealth infrastructure, funding, and workforce-building capability needed to understand and address some of the obstacles associated with rural healthcare. These workforce-building strategies will address some of the current organizational challenges and improve the health services that ARHS provides.

Evidence-Based Recommendations

Based on the three evidence-based strategies presented in Assessment 1, we can use critical and analytical skills to recommend ways to address the challenges and opportunities facing the organization. Develop three well-reasoned, well-supported solutions within the realm of applicable, sound, and logical evidence (data, insights, analysis, or best practices) to provide a framework for appropriately addressing the challenges and opportunities to specific projects applicable to all stakeholders and all relevant cross-functional departments. Address the challenges and opportunities facing the organization. Use SWOT analysis. Use systems thinking to evaluate the relationships and impacts of the challenges and opportunities. Be innovative, strategic, and sustainable.

Expected length: 2–3 content pages.

Be sure to delete these instructions before submitting Assessment 4.

Continue to develop this section throughout this course, synthesizing content for the final course project.

Conclusion

Summarize your overall course project. No new information should be included in your conclusion.

Be sure to delete these instructions before submitting Assessment 5.