PREFACE

More than three decades ago, the three of us agreed that health care was experiencing evolutionary, and in some segments, revolutionary change. At that time, we wrote in the Preface to the first edition of this text (1992) that health care organizations have "had difficulty dealing with a dynamic environment, holding down costs, diversifying wisely, and balancing capacity and demand." Our conclusion was that only health care organizations with a structured strategic management approach that recognized the value of emergent thinking and learning could make sense of such a rapidly changing industry.

Our only surprise has been that the rate of change in the health care industry has been far greater than we imagined and now certainly exceeds the magnitude of changes initiated with the passage of Medicare and Medicaid in the 1960s and the implementation of Medicare's prospective payment system later in 1983. Significant change in health care continues and in some cases is disruptive, as evidenced, first, by the passage of the Patient Protection and Affordable Care Act (ACA) in 2010 and more recently by the COVID-19 pandemic. On the one hand, the pandemic revealed that many of our systems, such as supply chains, were far more susceptible to environmental shocks than imagined. On the other hand, the collective response demonstrated that our caregivers were remarkably resilient and that innovations could be implemented very rapidly, such as the new generation of vaccines. In the wake of these changes, we are anticipating a whole new health care paradigm as the vast potential of Artificial Intelligence (AI) is integrated into our health care models. By most measures, health care is now the largest non-government employer in U.S. (without counting the more than one million vacancies in nursing). Much environmental change affecting health care will, no doubt, continue.

To cope with such alterations, by the 1990s, health care organizations universally embraced strategic management as the primary leadership philosophy and process for understanding and addressing rampant change. The adoption of strategic management is widespread today as health care leaders have found that strategic thinking, planning, and managing strategic momentum are essential for coping with the dynamics of the industry. Today, we believe that strategic management has become the single clearest manifestation of effective leadership in health care organizations.

In the broadest terms, this text is about leadership; more narrowly, it concerns the essential strategic tasks of leading and managing health care organizations. As a result, the 9th edition continues to advocate the importance of strategic thinking and clearly differentiates strategic thinking, strategic planning, and managing strategic momentum. These concepts represent the central elements of a complete strategic management process that we believe reflect the realities of conceptualizing, developing, and managing strategies.

Specifically, our approach depicts strategic management as the processes of strategic thinking, consensus building and documentation of that thinking into a strategic plan, and maintaining strategic momentum. Through the management of the strategic plan, new insights and perspectives emerge, and strategic thinking, planning, and managing are reinitiated. Therefore, strategic managers must become strategic thinkers with the ability to evaluate a changing industry, analyze data, question assumptions, and develop new ideas. Additionally, through strategic planning, strategic managers must be able to create and document a plan of action. Once a strategic plan is developed, managers maintain the strategic momentum of the organization. As strategic managers attempt to carry out the strategic plan, they evaluate its success, learn more about what works and what does not, and incorporate those insights into new strategic thinking.

It is our view that strategic control is integral to strategic momentum and cannot be thought of - or - taught as a separate process. Therefore, traditional strategic control concepts are integrated into the strategy development and monitored and guided through the development of strategic metrics. We believe that this approach better reflects how strategic control actually works in organizations - as a part of managing the strategy, not as an afterthought. Increasingly, we see that health care executives must be good managers by controlling costs and building efficiency as well as leaders who can capitalize on opportunities, prepare for disasters, and avoid increasingly serious threats.

Although we present a structured strategic management process, we believe that strategic management is highly subjective, often requiring significant intuition and even well-informed guesswork; however, intuition and the development of well-informed opinions are not easily learned (or taught). Therefore, a major task of the future strategic thinker is to first develop a thorough understanding of analytic strategic management processes and then - through experience - develop the intuition, perspective, and insight to consider previously uncharted strategic issues. Our map and compass metaphor provides a framework for blending rational, analytical planning with learning and responsiveness to new realities. We believe this text provides the foundation for effective strategic thinking, strategic planning, and managing strategic momentum.

Features of the Text

The 9th edition of Strategic Management of Health Care Organizations has been revised to make strategic thinking the first focus and to translate that thinking into comprehensive strategic plans that are easier to teach, learn, and translate into practice. We have incorporated some new features into this 9th edition and retained features that users of previous editions have said were informative, interesting, and a pedagogically sound foundation for understanding and embracing strategic management of health care organizations.

Retained Features

• Learning Objectives direct attention to the important points or specific chapter elements that students should know and be able to describe, explain, discuss, clarify, and justify.
• Analytical models, illustrative examples, and informative exhibits aid in learning the chapter materials.
• The Map and Compass provide a useful metaphor for conveying the view that strategic leaders must both plan as best they are able, but also learn, adjust, and establish new direction (develop a new plan) as they progress.
• The Language of Strategic Management - Key Terms and Concepts presents a list of the essential vocabulary and terminology related to the chapter's material.
• Questions for Class Discussion focus on key chapter concepts and assist the reader in reviewing the material and thinking about the implications of the ideas presented.
• End-of-chapter Notes contain the references used in the development of the chapter materials.
• Web-Based Instructor's Support is available to verified course instructors using the text. The support material includes PowerPoint slides for each chapter, chapter lecture notes that include suggestions for effective teaching, answers to the end-of-chapter questions, example assignments and quizzes, four strategic management case studies, as well as the instructor's manuals (teaching notes) for the case studies. In addition, the Instructor's Support contains a test bank of true/false, multiple-choice, and discussion questions available at www.wiley.com/go/SMHCO9e.
• Why This Chapter Is Important is a one-page chapter introduction - a call to action, providing a clear and compelling reason to continue to read and understand the concepts discussed in the chapter.
• Strategic Management Competency describes the overall applied skill that students of strategic management should be able to demonstrate after completing the chapter.
• Where appropriate, step-by-step processes for accomplishing the elements of strategic management are discussed in the chapter. Thus, readers are guided through a series of detailed steps for performing external analysis, service area analysis, internal analysis, and so on through unit action planning.
• Essentials for a Strategic Thinker are brief sidebars that provide summaries of contextual concepts important to understanding health care and the health care industry. These "Essentials" do not concern core strategic management concepts per se, but rather provide concise descriptions of terms, institutions, or concepts in the changing health care landscape that every strategic thinker should know.
• Practical Lessons for Health Care Strategic Thinkers present bullet points (derived from the chapter content) containing practical advice for those undertaking strategic thinking, strategic planning, and managing strategic momentum.
• Strategic Management Case Studies remain in this edition in response to user requests. These case studies, listed in the Table of Contents, are unique to this edition and are available for download to verified course instructors from the Web-Based Instructor's Support site (see www.wiley.com/go/SMHCO9e). In addition, favorite case studies from the 6th and 8th editions of this text, as well as other selected cases written by the authors, are available for download from the support site.
• Resources for...