Diversicare Healthcare Analysis and Strategic Goals Essay

SWOT Analysis

SWOT analysis plays a pivotal role in the strategic planning process for organizations operating in various industries. This framework allows for evaluating the company’s strengths, weaknesses, opportunities, and threats, which in turn provides foundations for establishing relevant strategic goals and developing a coherent business plan. Diversicare Healthcare Services, Inc. is a healthcare provider focusing on the field of post-acute care (Diversicare, 2020). The organization continuously provides high-quality medical services and therapies to its patients.

Thesis Statement

This paper aims to conduct a SWOT analysis of Diversicare Healthcare, including its strengths, weaknesses, opportunities, and threats, in order to develop appropriate strategic goals for the company.

Strengths

• A broad range of high-quality acute care services. As stated in the most recent annual report of Diversicare (2020), the company has a strong reputation as a provider of high-quality, cost-effective services due to its pursuit of excellence. The organization implements an evidence-based approach and a quality assurance system to provide patients with effective and safe treatment and therapy options.
• A total of 61 operating locations across eight states. As Diversicare (2020) reports, the “continuing operations consist of 61 nursing centers with 7,250 licensed skilled nursing beds … in Alabama, Indiana, Kansas, Mississippi, Missouri, Ohio, Tennessee, and Texas” (p. 2). Therefore, the organization addresses the needs of an expanded population base.
• Strong corporate culture. Diversicare emphasizes the importance of connectedness, compassion, trust, respect, and communication as core values shaping the workplace environment and interaction with patients (“A name you can trust,” n. d.). As a result, Diversicare’s company culture is considered its distinguishing feature compared to other post-acute care providers in the United States.
• The loyalty of customers and employees. Diversicare is recognized for excellent experience by its customers and for its unique culture by its employees through respective 2020 awards (“A name you can trust,” n. d.). The medical staff is provided with training and tools for obtaining and enhancing necessary skills. Customer satisfaction is ensured through effective communication, support, and continuous improvement.

Weaknesses

• Decreased revenue and high operating expenses due to the COVID-19 pandemic. According to Stulick (2021), Diversicare reported: “a net loss from continuing operations at -$2.9 million, or -43 cents per share in the third quarter” of 2020 (para. 1).
• Employee turnover rate due to overwork. One of the major challenges the organization faces is the problem of retaining qualified medical staff in the context of high demand and longer or irregular hours (Diversicare, 2020). The pandemic and competition aggravate increased workload and the associated employee shortage.
• Lack of communication between employees and management. Diversicare has a problem with ensuring effective internal communication among its staff, which results in weak leadership (Diversicare, 2020).
• A limited supply of licensed skilled nursing center beds. As Diversicare (2020) indicates in the annual report, “high construction costs … and start-up expenses also act to restrict growth in the supply for such centers” (p. 6).

Opportunities

• Increasing the number of nursing centers. Diversicare (2020) can “acquire and lease new centers, focusing primarily on opportunities that can leverage” the existing infrastructure (p. 2). By aligning the growth with strategic objectives, the company can determine markets for continuing operations.
• The use of innovation and technology. The organization fosters an evidence-based approach in order to provide purposeful services for its patients (“A name you can trust,” n. d.). Therefore, Diversicare can develop an innovation culture to improve the quality of care and promote efficient solutions. The use of technology is another opportunity to enhance communication, eliminate medical errors, and improve management.
• Increasing profitability at existing centers. Diversicare can address the financial challenges by improving the payor mix and promoting higher occupancy (Diversicare, 2020). Furthermore, the company can continue to introduce marketing initiatives at the existing nursing centers.
• Presenting additional specialty services. According to Diversicare (2020), based on the specific market needs, they “may include complex medical and rehabilitation services, as well as memory care units and another specialty programming” (p. 2).

Threats

• Safety threats associated with the coronavirus pandemic. Similar to other healthcare providers in the industry, the organization reports the need to implement additional safety and care measures for patients during social isolation and prepare nursing centers for outbreaks (Diversicare, 2020).
• Financial expenses due to COVID-19. As Stulick (2021) states, Diversicare “incurred $7.2 million in additional healthcare-related expenses including labor costs, personal protective equipment (PPE), testing and infection control supplies” (para. 10).
• Government restrictions are affecting operations. Reduced occupancy is considered to be one of the consequences of local government’s limitations and changes in healthcare protocols (Diversicare, 2020). Furthermore, there is a need for centers to comply with licensure and certification requirements.
• The highly competitive nature of the post-acute care industry. Diversicare (2020) reports that some of its “present and potential competitors for acquisitions are significantly larger and have or may obtain greater financial and marketing resources” (p. 6). Furthermore, competition contributes to salary increases, which involves additional expenses for the company to hire and retain competent staff.

Strategic Goals Development

• Use innovation of technology to improve communication and leadership and enhance the quality of care.
• Grow revenue by increasing the number of nursing centers, improving the payor mix, and promoting higher occupancy.

References

A name you can trust.(n. d.). Web.

Diversicare. (2020). 2020 Annual Report. Web.

Stulick, A. (2021). Diversicare reports net loss for the third quarter, close to the completed merger with DAC. Skilled Nursing News. Web.