Joseph R. Biggs, Ph.D., HSPP
Jeffrey S. Harper, Ph.D., CFE
The Lugar Center for Rural Health

Division of Union Hospital
 380 bed not-for-profit medical center
 Serves over 200,000 patients per year
Established in 1992 as Midwest Center
 Mission

 Advancing rural health through education,
innovation, and collaboration.
The Lugar Center for Rural Health
Began utilizing technology to advance rural
health in 1999
 Telehealth services have expanded through
grant funding

 US Department of Health and Human Services
 Health Resources and Services Administration
(HRSA)
 Office for the Advancement of Telehealth (OAT)
Telehealth Network Grant
Program (TNGP)

Lugar Center was 2010 grant recipient
 HRSA – H2ARH20178

Monies used to:
 Support infrastructure upgrades
 Expand telehealth services into neighboring rural
communities
 formalize and subsidize the Wabash Valley Rural
Telehealth Network (WVRTN)
Wabash Valley Rural Telehealth
Network
Partnership of multiple health care
organizations and specialty practices
 Participate in Live Video Interactive (LVI)
telehealth

 Purpose: to alleviate the barriers to accessing
equitable health care services

Annual telehealth consult volume has grown
 From 300 to over 5,000
Telehealth specialties include:
Behavioral health
 Cardiology
 Occupational health
 Pulmonology
 Pediatric consults
for burns,
 Nephrology
microplasty, and
 Child psychiatry
congenital
 Neurology
anomalies.
 Diabetes education
 Field STEMI

A Methodology for Sustainability

Phase I – Needs Assessment
 Define the objectives and scope of the




assessment
Identify partners/clients, products, and services
to include in the assessment
Determine stakeholder needs/requirements
Assess product/service attributes and viability
Measure current resource allocation to current
product/service delivery
A Methodology for Sustainability

Phase I – Needs Assessment (Continued)
 Identify present revenue sources and potential
future revenue sources
 Data analysis
 Develop findings for strategy formulation
 Presentation to management/staff for
agreement/adjustment
A Methodology for Sustainability

Phase II – Strategy Formulation
 Treat the findings from Phase I with various
analytical tools (competitive forces, value chain
and virtual value chain, BCG matrices, decision
chain, gap analysis, and others as applicable)
 Define strategic alternatives
A Methodology for Sustainability

Phase II – Strategy Formulation (Continued)
 Present to management for strategic choice
 Develop goals and objectives to support strategic
choice
 Presentation to management/staff for
agreement/adjustment
A Methodology for Sustainability

Phase III – Action Plan Development
 Develop product/service design and
implementation schedule
 Develop revenue projection
 Develop responsibilities and milestones matrix
 Develop quality assurance/client satisfaction
metrics
A Methodology for Sustainability

Phase IV – Obtain Stakeholder Buy-In
 Final report issued to management,
presentations by the consultant as necessary
 Management review and accountability plan
A Methodology for Sustainability
 Preliminary
Investigation
 Scope
○ All Telehealth
○ WVRTN
 Review
of Best Practices
 Emerging industry
 Home health care
 Strategic Analyses
A Methodology for Sustainability
 Industry Analysis
 Market size
 Scope of competitive rivalry
 Availability of economies of scale
 Whether industry profitability is above or
below par
A Methodology for Sustainability
 Competitive Analysis
 Rivalry among competing organizations
 The potential entry of new competitors
 Competitive pressures from substitute
products
 Bargaining Power of Suppliers
 Bargaining Power of Customers
A Methodology for Sustainability
 Key
Findings – Competitive Analysis
 The sustainability plan will be most effective
by ensuring that future partners/affiliates are
committed to the network and will incur
significant switching costs if they choose to
move to a competitor;
 A good strategy will include a plan for
continued research and development to
maintain competitive advantage;
A Methodology for Sustainability
 Key
Findings – Competitive Analysis
 It is relatively unlikely that telehealth will see a
large influx of new players in the short term;
 Potential affiliates will probably not find
substitute products for online telehealth
readily available;
 WVRTN should be attentive to its
membership as the sustainability model is
developed and introduced.
A Methodology for Sustainability
 Analysis
of Key Driving Forces
 Changes in the industry growth rate
 Product innovation and technology change
 Diffusion of technical know-how
 Regulatory influences and government policy
changes
Key Findings from Preliminary
Investigation
The telehealth market is new and unproven.
Therefore, a successful strategy will be based
upon thoughtful projections and “best-guesses”
that will require a degree of flexibility and
rethinking as it is carried out.
 The strategy must include an adequate revenue
stream from telehealth “customers” that will
fund operations and innovation.
 The Telehealth Department has the present
capacity to deliver robust services and
applications to new customers.

Key Findings from Preliminary
Investigation (Continued)




The organization’s reputation, recognition, and
potential referrals to new customers from its
present partners indicate high potential for market
expansion.
Continued innovation will be a key in future market
penetration.
The strategic plan should capitalize on the
organization’s reputation, present products, and
future innovations – each of which is a core
competency and competitive advantage.
The strategy will be dependent upon a marketdriven organizational culture (see next slide).
Key Findings from Preliminary
Investigation (Continued)

A market-focused strategy will have to be
adopted. The strategy will need to include:
 Development of an appropriate profile for future
affiliates;
 Establishment of a market-based pricing model
that is justifiable to CFOs of affiliates;
 Reasonable acquisition targets and methods; and
 Funding metrics that will show progress to
sustainability.
Key Findings from Preliminary
Investigation (Continued)

A specific subset of industry opportunities will
need to be agreed upon in order to develop
precisely targeted activities for exploiting new
and sustainable revenues.
Sustainability Retreat
All Center administration and staff, plus key
players from the hospital;
 One-day agenda focusing on a marketbased approach to growth; and
 Intention: to build a consensus regarding
future direction.

Strategy Formulation Retreat
 Session
1: INTRODUCTION
 Review of Preliminary Findings
 Working Sustainability Strategy Statement
Presentation
 “Next steps” process discussion
 How will our new strategy work with Union
Hospital?
 How will our new strategy work with our
partners?
Strategy Formulation Retreat
 Session
2: Market Identification
 What kinds of organizations should we
pursue as partners (customers)?
 Where will our partners be located?
 How will we find our prospective partners?
 How important are eCommerce and the
Internet in our new sales model?
Strategy Formulation Retreat
 Session
3: Our Products and Services
 What products and services do we presently
provide that have great value to the market?
 What products and services do we presently
provide that have limited or little value to the
market?
 What new products and services can we
provide in the near term that will have great
value to the market?
Strategy Formulation Retreat
 Session
4: Sales and Development
Responsibilities
 Who “sells” our products and services now?
 Who creates our products and services now?
 Who will sell our products and services to a
larger market?
 Who will create our products and services for
a larger market?
Strategy Formulation Retreat
 Session
5: Product and Service Pricing
 What is the price of our products and
services?
 What is the cost of our products and services?
 How should future pricing be structured?
 What prices should we charge?
 What is our justification for our prices?
Strategy Formulation Retreat
 Session
6: Assimilation
 Where do research, innovation, and creativity
fit in?
 What is our “Elevator Speech?”
 How will we know when we are successful?
Lessons Learned Through the
Process
Culture shift is painful
 It is important to let everyone have input
 Differing perspectives, ideas, and
attitudes must be considered
 An outside facilitator is needed
 Consensus ≠ Compromise
