Baylor Scott & White Health is an American not-for-profit healthcare provider headquartered in Dallas, Texas. According to the recent data by the Agency for Healthcare Research and Quality (AHRQ, 2019), the company is the largest nonprofit healthcare provider in the state and one of the largest in the country. The company has “48 hospitals, 185 satellite outpatient facilities, 26 ambulatory surgery centers, 164 primary care clinics, and 503 specialty care clinics, as well as four senior health centers, seven urgent care clinics, and 30 retail pharmacies” (AHRQ, 2019, p. 2). The company is a limited liability company born out of a 2013 merger between Baylor Health Care System and Scott & White Healthcare (AHRQ, 2019). On the whole, Baylor Scott & White Health has considerable resources to aid in its future strategic development.
The company’s financial statements are not generally available online since the company is a limited liability company. However, it is still possible to comment on some of the improvements in financials made over the past years. For example, Advisory Board (2020) reports that the company increased its annual revenue by $1 billion in 2019, despite a 5.5% drop in hospital admissions in the past two years. This has enabled the company to recover from the drop in net income, which constituted 14.9% in the previous year (Maddox, 2019). Based on 2019 data, the company’s operating revenue and expenses grow simultaneously, and the former figure is $0.5 billion higher than the latter, enabling the company to cover its costs and reinvest into the business when needed (Maddox, 2019). Between 2016 and 2018, similar trends can be observed, which leads to the belief that the company applies an effective strategy to manage its costs (McCanna, 2018). With adequate cost management, the increase in revenue will enable the company to expand its services, thus developing its market share and fulfilling strategic goals.
McKinsey 7S Analysis
The hard and soft elements of Baylor Scott & White Health function effectively to create and maintain a competitive advantage. Firstly, the company’s strategy is focused on expanding its services to gain more revenue. This is evident from the company’s financial data, which indicates a significant growth of outpatient services resulting in increased annual revenue (Advisory Board, 2020). This strategy is appropriate for the company’s current market and resources. The company’s structure enables facilities to operate as part of one network, which ensures that standards, policies, and strategies are applied evenly while allowing for some independence on the lower levels of the organization (AHRQ, 2019). The systems at Baylor Scott & White Health are well-developed to support the delivery of services, with IT systems used as necessary to support collaborative care and telehealth (AHRQ, 2019).
The company’s culture, which rests on its shared values, focuses on delivering value to all stakeholders. In other words, the company seeks to provide high-quality services to patients while also treating staff fairly and contributing to the community (AHRQ, 2019). A strong culture contributes to Baylor Scott & White Health’s strategy and supports it in fulfilling its goals. Based on the information available, the company relies on ethical and transformational leadership styles to fulfill its mission (AHRQ, 2019). On the one hand, ethical leadership is essential for the company to contribute to the community. On the other hand, transformational leadership supports the culture of learning and innovation. Finally, the company employs over 47,000 people, 7,800 of whom are physicians, to deliver services to clients (AHRQ, 2019). The skills possessed by staff members are continuously developed through organizational learning, which supports the company’s mission by continuously enhancing the workforce.
As evident from the financial and McKinsey 7S analyses, the company has a strong foundation for the future expansion of its services. In addition, the company has an opportunity to develop its reputation by further engaging with the local community. The company’s strength in learning could be used to build staff competencies and elevate the quality of services further to achieve higher levels of patient satisfaction and better patient outcomes.
The company’s main weakness is that it is mostly concentrated in one state, with all of its fully-owned hospitals located in Texas. Hence, the company could pursue a geographical expansion strategy by opening new facilities or acquiring existing hospitals in other states. This would increase the company’s revenue and market share, thus fulfilling its strategic goals.
The main threat to the company is rigorous competition in the healthcare sector. To address it, the company should invest more resources in marketing. Another possible strategy is to improve quality management to promote patient satisfaction and enhance the translation of quality standards into practice. Both strategies would help to distinguish Baylor Scott & White Health from its competitors while attracting more clients.
Focusing on a single state also puts the company at a threat of losing qualified and talented employees. According to the Texas Department of State Health Services (2018), there is a significant shortage of physicians in the state. Hence, understaffing is a serious threat to Baylor Scott & White Health, which could be addressed both by opening more out-of-state locations and by establishing an internal rotation system for care providers. These strategies would support the company’s staffing levels while promoting organizational learning and development.
Contributing to the community is part of the company’s strategy, and thus the fit between Baylor Scott & White Health and its community is excellent. The company has developed several programs to identify and address community needs in Texas (Baylor Scott & White Medical Center – Carrollton, 2019). These programs include providing charity care, government-sponsored care, education, and financial donations aimed at resolving problems in the local community (Baylor Scott & White Medical Center – Carrollton, 2019). Hence, the company supports the local community while fulfilling its strategic goals. For instance, participation in government-sponsored programs and medical education enables Baylor Scott & White Health to improve its reputation and increase awareness about services, thus attracting more clients.
Summary of Strategic Plan
Overall, Baylor Scott & White Health is a large care provider with a well-developed range of services. The company’s financial data indicates that it has the capacity to manage expenses adequately while applying various strategies to increase revenues. The company also has significant organizational resources that enable it to apply various growth strategies. The company’s current strategy combines the development of community-based programs with increasing the volume of outpatient services. Based on the results of the TOWS analysis, the company would also benefit from expanding its out-of-state reach, attracting more clients through marketing efforts, and implementing and improving quality management systems. These strategies would support the company’s future development, allowing it to acquire a larger market share and increase revenue significantly.
Agency for Healthcare Research and Quality. (2019). Baylor Scott & White Health: Building a foundation for continuous improvement. Web.
Baylor Scott & White Medical Center – Carrollton. (2019). Annual report of community benefits. Web.
Daily Advisor. (2020). How Baylor Scott & White upped revenue by $1B—while admissions fell nearly 6%. Web.
Maddox, W. (2019). Baylor Scott and White’s mixed financial report. DMagazine. Web.
MCCanna, P. J. (2018). Quarterly disclosure report. Web.
Texas Department of State Health Services. (2018). Texas projections of supply and demand for primary care physicians and psychiatrists, 2017 – 2030. Web.