HCM 415 Module 5 Strategic Alternatives Short Paper Example

Four Roads for Ashford Valley VNA: Weighing the Strategic Alternatives

[Student Name]

Southern New Hampshire University

HCM 415: Healthcare Strategic Management and Policy

Module Five Short Paper

[Instructor Name]

[Date]

The organization, setting and figures below are a composite written as a model document. No real employer, client, colleague or patient is described.

Four Roads for Ashford Valley VNA: Weighing the Strategic Alternatives

The situational analysis for Ashford Valley Visiting Nurse Association ended with three priority issues: too few nurses to accept every referral, an uncertain relationship with Kestrel Health, which sends the agency 41% of its patients, and a three-star quality rating that puts payment and referrals at risk. This paper turns those issues into four strategic alternatives, sets criteria for judging them, scores each option and recommends a path for the board. The goal is to make the reasoning visible so that board members who disagree can see exactly where.

A Vocabulary for Options

Ginter et al. (2018) sort strategic choices into levels. Directional strategies set the mission and vision. Adaptive strategies decide whether to expand, contract or maintain scope, through moves such as market development, vertical integration or retrenchment. Market entry strategies describe how to carry out an expansion, whether by building internally, acquiring, merging or forming alliances and joint ventures. Positioning strategies decide how to compete, through cost, differentiation or focus on a segment. Naming each alternative in these terms keeps the board from comparing a goal with a method.

Alternative A: Independent Growth

The first option expands capacity without a partner. The agency would recruit 24 registered nurses over two years through a new residency for graduate nurses, retention pay for rural routes and a modern scheduling system that cuts driving time. This is an adaptive expansion strategy, specifically market penetration, carried out through internal development. It protects independence and addresses the capacity issue directly. Its cost is about $2.1 million a year in added wages once fully staffed, plus roughly $350,000 in one-time recruitment and technology spending, which a 34-day cash reserve can barely support.

Alternative B: Joint Venture With Kestrel

The second option creates a jointly owned venture with Kestrel to provide the recovery phase after hospital at home stays and a preferred post-acute network for Kestrel's discharges. In the trial by Levine et al. (2020), treating acute illness at home instead of on a ward reduced both cost and readmissions, and Kestrel expects about 600 such admissions a year by year three, most of which will need home health afterward. Ashford Valley would supply nurses and hospice, Kestrel would supply capital and referrals, and both would share governance. This is vertical integration through an alliance rather than ownership.

Alternative C: Full Merger

The third option merges the agency into Kestrel as its home health and hospice division. The system's balance sheet would fund recruitment and technology immediately, and referrals would be secure. But the agency's board would dissolve, the nonprofit community identity built since 1921 would fade and decisions about rural visits and charity care would be made by a hospital system focused on its own discharges. Once completed, a merger is very hard to reverse.

Alternative D: A Narrower Focus

The fourth option narrows the agency's scope to where it is strongest: medically complex nursing, heart failure and lung disease programs, palliative care and hospice. It would stop competing for short post-surgical episodes, where the four-star national chain dominates, and accept only Medicare Advantage contracts that meet a minimum rate. This is a focus positioning strategy combined with selective retrenchment. It would ease the staffing gap by reducing demand rather than adding nurses, but it would shrink revenue by an estimated 8% and could weaken ties with surgeons and the health system.

Criteria for Judging

Six criteria were drawn from the mission, the situational analysis and board discussions. Mission fit asks whether the option serves people of every age and income across four counties. Financial feasibility weighs cost against a 34-day cash reserve. Capacity effect asks whether the option closes the nurse gap. Quality impact considers the effect on hospitalization and star ratings. Risk and reversibility ask what happens if the option fails. Speed asks how quickly results arrive. Mission fit and capacity received the highest weights because the analysis showed they constrain everything else.

Evidence Behind the Scores

Research informed several scores. Werner et al. (2019) found that patients sent home with home health after a hospital stay cost Medicare less than similar patients sent to skilled nursing facilities, which strengthens any option that increases Ashford Valley's role in discharges from Kestrel, as B and C do. Landers et al. (2016) argued that home health agencies create the most value when they are coordinated with hospitals and physicians rather than working as separate vendors, which also favors B and C. For capacity, McCaughey et al. (2012) linked on-the-job injury among home health workers to intent to leave, suggesting that Alternative A's safety and support measures matter as much as its pay.

The Scoring Matrix

In Table 1, every option receives a rating between 1 (weak) and 5 (excellent) against every criterion, and that rating is then multiplied by the weight. The joint venture scores highest, driven by strong quality, speed and financial scores and good mission fit. Independent growth scores well on mission and risk but poorly on financial feasibility and speed. The merger scores high on money and capacity but lowest on reversibility and near the bottom on mission. The focus option scores worst on capacity for growth and mission fit, because it serves fewer people.

Table 1. Weighted Scoring of Four Strategic Alternatives

Note. Scores assigned by the planning office after board and management input; weighted totals computed as score times weight.

Reading the Close Scores

The top three totals sit within 0.20 points, so small changes in weights could reorder them. If the board valued financial feasibility at 25% instead of mission fit, the merger would edge ahead. That sensitivity is useful information. It shows that the real choice is about values, independence and mission against security, and that numbers alone cannot make it. It also suggests a combination may outperform any single option.

The Recommendation

The recommended path combines Alternative B with the workforce elements of Alternative A. Ashford Valley should negotiate a joint venture with Kestrel for hospital at home recovery care and preferred post-acute status, and it should ask Kestrel to fund part of a nurse residency as a shared investment, since both parties need the nurses. The agency should keep its hospice and complex-care strengths as its differentiation within the venture. The merger remains a fallback if the venture cannot be negotiated within twelve months or if cash falls below 25 days.

Why Not the Others

Independent growth alone is too slow and too costly for the agency's reserves, and Kestrel may choose another partner while Ashford Valley recruits. A full merger gives up what makes the agency distinctive before trying a less permanent arrangement. The focus option abandons patients the mission promises to serve and weakens the relationship that supplies nearly half of all referrals. Parts of the focus strategy, especially minimum rates for Medicare Advantage contracts, can still be adopted within the recommended path.

Risks of the Recommended Path

The joint venture carries risks. Kestrel could dominate governance, the venture could pull nurses away from rural patients toward system discharges and a failed partnership could leave the agency weaker than before. Protections should include equal board seats, a written commitment to serve rural ZIP codes, an exit clause after three years and service targets reviewed quarterly. Staff also need to understand why the agency is partnering, because rumors of a takeover could accelerate nurse departures.

Conclusion

A structured comparison shows that no single option solves all three priority issues. A joint venture with Kestrel, strengthened by a shared nurse residency, addresses quality, speed and referrals while preserving the nonprofit mission and a way back if it fails. Module Six will translate this choice into measures and targets on a balanced scorecard.

References

Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care organizations (8th ed.). Wiley.

Landers, S., Madigan, E., Leff, B., Rosati, R. J., McCann, B. A., Hornbake, R., MacMillan, R., Jones, K., Bowles, K., Dowding, D., Lee, T., Moorhead, T., Rodriguez, S., & Breese, E. (2016). The future of home health care: A strategic framework for optimizing value. Home Health Care Management & Practice, 28(4), 262-278. https://doi.org/10.1177/1084822316666368

Levine, D. M., Ouchi, K., Blanchfield, B., Saenz, A., Burke, K., Paz, M., Diamond, K., Pu, C. T., & Schnipper, J. L. (2020). Hospital-level care at home for acutely ill adults: A randomized controlled trial. Annals of Internal Medicine, 172(2), 77-85. https://doi.org/10.7326/M19-0600

McCaughey, D., McGhan, G., Kim, J., Brannon, D., Leroy, H., & Jablonski, R. (2012). Workforce implications of injury among home health workers: Evidence from the National Home Health Aide Survey. The Gerontologist, 52(4), 493-505. https://doi.org/10.1093/geront/gnr133

Werner, R. M., Coe, N. B., Qi, M., & Konetzka, R. T. (2019). Patient outcomes after hospital discharge to home with home health care vs to a skilled nursing facility. JAMA Internal Medicine, 179(5), 617-623. https://doi.org/10.1001/jamainternmed.2018.7998