The constant increase in healthcare costs associated with the emergence of new medical technologies and medicines, as well as changes in the structure of morbidity and demographic problems, is a global trend nowadays. Holden et at. (2021) emphasize that “this evolution is accompanied by new challenges to deliver safe, high-quality, and low-cost healthcare services” (p. 499) Each country has its own specific public health and non-profit programs that target the most prominent health-related issues the population faces. However, no country in the world can increase its healthcare budget indefinitely to meet every possible health care option. This paper will review the potential program evaluation offers for adaptive strategizing in public health and non-profit institutions, as well as the use of the strategic position and action evaluation (SPACE) matrix for it.
Program Evaluation as a Means for Development of Adaptive Strategies in Public Health and Non-Profit Organizations
In its most general form, strategic management is the systematic adoption and implementation of decisions in adherence with pre-set long- and short-term goals of an organization. Effective health system management means being able and willing to respond to the various well-documented and analyzed challenges that health systems face today in a timely manner. Good financial performance is not a major prerequisite for public health and non-profit institutions, which prompts evaluation to focus more on the program’s effect on population health. Ginter et al. (2018) add that usually, the programs of public health and non-profit organizations are funded through government, federal grants, or other means, and target “healthcare gaps” not addressed by the private sector. Therefore, one of the most important management tasks is the selection of criteria for evaluating the performance of a health program for more effective development and implementation of adaptive strategies based on statistical indicators.
Adaptive strategies offer flexibility in planning and goal setting, as well as the option to adjust a program if new issues arise which makes them the most viable tool for facilitating effectivity in healthcare. For adaptive strategies to be the most effective, they require constant evaluation of implemented programs to track the key performance indicators and see if they are met. It should be noted that the actualization of attention to the problem of healthcare efficiency occurred against the backdrop of a new stage of systemic transformations in the industry. These changes are aimed at modernizing and increasing the availability of medical care, changing the paradigm of the activities of a medical institution from the concept of survival to the concept of stabilization and development.
Improving the efficiency of healthcare management at all levels, especially directly in public health and non-profit medical institutions, is an urgent scientific and practical problem of reforming the industry. In general, the effectiveness of healthcare is expressed as the degree of its influence and impact on the preservation and improvement of the health of the population. This, in turn, helps to increase labor productivity and reduce healthcare and social security costs. Program evaluation is a crucial tool for the development of well-designed adaptive strategies, as it allows to review the efficiency of the implemented interventions based on understandable and reliable set of criteria.
Strategic Position and Action Evaluation (SPACE) Matrix and Its Use in Developing Adaptive Strategies
To determine the most advantageous strategic position both for the organization as a whole and for individual areas of its activity, a matrix of strategic position and action evaluation (SPACE) can be used. According to Fuertes et al. (2020), the SPACE matrix offers insight into “the most suitable strategies for an organization in the competitive field, once the external and internal strategic positions are defined” (p. 11). The methodology for constructing the matrix consists of four evaluation coordinates: financial strength (FS), competitive advantage (CA), environmental stability (ES), and industry strength (IS). Subsequently, financial strength determines the financial position of the organization. Competitive advantage outlines its viability against others in the industry. Environmental stability characterizes the degree of fixity of the external environment, and, finally, industry strength establishes the attractiveness of the industry in question. The FS and CA coordinates evaluate the Internal Strategic Position, while the ES and IS coordinates evaluate the External Strategic Position. Thus, the SPACE matrix allows to position the company in four coordinates to create a comprehensive analysis of its inner and outer conditions.
It is generally accepted that the proposed groups of factors are conditional, and the company can select them individually, guided by its own variables. Nevertheless, SPACE analysis is applied according to a single principle, following the general rules. Each factor is evaluated separately on a six-point scale based on a comparison of actual and normative values and a study of economic statistics in the relevant industry. After the evaluation, the average value is calculated in each of the listed groups and displayed graphically on the coordinate axes. Thus, different strategic states are represented: aggressive, competitive, conservative or defensive. The recommendations obtained as a result of the analysis can be used to develop strategic guidelines for the organization. The SPACE matrix can be used independently – for the initial assessment of the organization’s position in the industry – or as a basis for additional analysis.
Adaptive strategies can rely on the SPACE matrix as it provides a comprehensive overview of both the internal strength of the institution and the external opportunities that exist in this specific environment. According to Ginter et al. (2018), “by using SPACE, the manager can incorporate a number of factors into the analysis and examine a particular strategic alternative from several perspectives” (p. 391). This is especially relevant for the healthcare industry as planning public health programs requires a thorough assessment of the existing issues and needs of the population. For example, the SPACE matrix can be used to determine what barriers various groups face when addressing their health-related problems, what prevents them from reaching out for help, and what can be done to reduce these obstacles. Moreover, the matrix can be helpful on various stages of implementing adaptive strategies to evaluate intermediate outcomes and reveal underlying issues that arose during different stages.
Conclusion
The most important trend in the development of healthcare systems in economically developed countries is a shift in priority. This shift changes focus from maximum cost savings in the provision of medical care to maximum efficiency in the use of resources involved. Such a relationship between management and strategizing led to the need to create a system of specific indicators and criteria characterizing the development and significant changes in the activities of a medical institution. The system includes indicators of the intellectualization of the production of medical care, of the minimum required amount of funding for health facilities, of healthcare professionals’ work motivation, and of patient satisfaction. Program evaluation can be vital for adaptive strategies: it offers comprehensive measuring tools for assessing performance and planning further interventions. Moreover, the use of the SPACE matrix can accompany this assessment and provide additional perspectives on the current and future issues.
References
Fuertes, G., Alfaro, M., Vargas, M., Gutierrez, S., Ternero, R., & Sabattin, J. (2020). Conceptual framework for the strategic management: A literature review. Journal of Engineering, 2020, 1–21.
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). Strategic management of health care organizations (8th Edition). Wiley.
Holden, R. J., Boustani, M. A., & Azar, J. (2021). Agile innovation to transform healthcare: Innovating in complex adaptive systems is an everyday process, not a light bulb event. BMJ Innovations, 7(2), 499–505.