SITUATION ANALYSIS Lawrence + Memorial Hospital Breast Health Center

GEORGE WASHINGTON UNIVERSITY

2100 M Street #310, Washington, DC 20052 United States of America Partial Requirements for Healthcare MBA MBAD 6272 Group A Spring 2013 Authored by: Bryan King, Raheela James, Ronald Llacuna, Herjit Pannu, and Kelsey Vlieks

EXECUTIVE SUMMARY Lawrence and Memorial Hospital (L+M), located in New London, Connecticut, is in the process of establishing a comprehensive Breast Health Center. L+Ms primary service area has the highest incidence of breast cancer in Connecticut. The demand for oncology services will only continue to grow, driven by population growth, aging and an increase in survival rates. Establishing a designated Breast Center and forging a strong partnership with Dana-Farber Cancer Institute and Yale Radiation Oncology will help elevate L+Ms care plan for benign and malignant breast disease. Breast health care is increasingly complex and multidisciplinary. This program proposes a number of enhancements to L+Ms current breast health services that will lead to a coordinated approach to care delivery. Attaining accreditation by the National Accreditation Program will be a key differentiator from other programs as well as an indication to consumers that L+M is providing quality care. Over the last three years L+Ms market share has declined for many reasons, including the loss of three surgeons and increased competition in the region. This competition is only expected to increase as 85% of cancer care is provided on an outpatient basis. Also, it is essential that L+Ms medical staff interests and needs are aligned with what the hospital is planning in order to successfully develop new service lines, like the Breast Health Center. L+M needs to target referral sources that are sending their patients outside of the area. L+Ms strengths are their commitment to serving their community, growing surgical and oncology service lines and partnering with well-established and reputable partners. They have opportunities to improve collaboration amongst physicians and improve the quality of care and patients access to comprehensive breast health care. In creating a strategic marketing plan, it is critical for L+M to define their value proposition (e.g., high tech, high touch, high quality) to patients, as well as physicians. Making the physicians and the community aware that distinguished breast health care and world-class cancer care is available in their community will be the first step to capturing greater market share.

TABLE OF CONTENTS
Introduction_______________________________________________________________________________________________5 Situation Analysis_________________________________________________________________________________________6 Environment______________________________________________________________________________________6 Political______________________________________________________________________________________6 Economic____________________________________________________________________________________7 Social_________________________________________________________________________________________7 Technology__________________________________________________________________________________8 Environment (Sustainability)______________________________________________________________9 Legal_________________________________________________________________________________________9 Consumer Environment__________________________________________________________________10 Summary of Environmental Opportunities and Threats_______________________________10 Implications for Strategy Development_________________________________________________10 Industry___________________________________________________________________________________________11 Classification and Definition of Industry________________________________________________11 Accreditation and Standards_____________________________________________________________12 Forecast on Breast Cancer Management________________________________________________13 Existing Competitors__________________________________________________________________________14 Potential New Entrants_______________________________________________________________________14 Substitute Products or Services______________________________________________________________14 Suppliers_______________________________________________________________________________________15 Buyers__________________________________________________________________________________________15 Summary of Industry Opportunities and Threats___________________________________________16 Implications for Marketing Strategy Development_________________________________________16 Organization_____________________________________________________________________________________________16 Objectives and Constraints____________________________________________________________________16 Financial Condition____________________________________________________________________________17 Management Philosophy______________________________________________________________________17 Organization Structure________________________________________________________________________17

Organizational Culture______________________________________________________________________18 Summary of Breast Health Program Strength and Weaknesses_________________________18 Implications for Marketing Strategy Development_______________________________________19 Marketing Strategy____________________________________________________________________________________19 Objectives and Constraints__________________________________________________________________22 Sales, Profits, and Market Share____________________________________________________________22 Target Markets_______________________________________________________________________________22 Marketing Mix Variables_____________________________________________________________________23 Summary of Marketing Strategy Strengths and Weaknesses_____________________________24 Implications for Strategy Development____________________________________________________24 SWOT Analysis___________________________________________________________________________________________________25 Summary_________________________________________________________________________________________________________26 Appendix_________________________________________________________________________________________________________29 Financial Analysis _____________________________________________________________________________________29 Service Area____________________________________________________________________________________________30 Activity Time Line______________________________________________________________________________________31 References_______________________________________________________________________________________________________32

INTRODUCTION Lawrence + Memorial Hospital (L+M) has been serving New London County, CT for over 100 years. Founded in 1912, L+M is a 320 bed, not-for-profit, general, acute care, private hospital. L+M serves eleven towns and southern Rhode Island and cares for tens of thousands of patients every year. The hospital offers many of the latest advances in healthcare, including PET/CT scans, 3T magnetic resonance imaging, and the only Newborn Intensive Care Unit in eastern Connecticut. It has the 6th busiest emergency department in the state of Connecticut and offers emergency procedures, like tele-stroke and emergent percutaneous coronary intervention (PCI). In the fall of 2013, L+M will open a new Cancer Center in affiliation with Dana-Farber Cancer Institute in Waterford, CT. In conjunction with opening the Cancer Center, L+M is launching a Breast Health Center this fall to treat both benign and malignant breast disease. Currently, L+M has many components of a comprehensive breast health program; however, the services are fragmented across multiple providers and treatment locations. As a result, timely access to care and results have been an issue and residents are leaving the market for treatment. Surgical volumes for lumpectomies and mastectomies at L+M have declined by 15% between FY 2009 and FY 2012. The goal of the new program is to elevate the level of care provided to patients throughout the continuum of care. From diagnosis to post-treatment care, patients treatment will be expedited, individualized, and coordinated among a multidisciplinary team. Our objectives for this project are to work with L+M to help them better understands the current environment, the industry and their strengths and weaknesses in relation to their competitors. Patients have more access to information and consumerism is increasing; therefore, L+M must differentiate themselves and define their value proposition (high tech, high touch, research, quality) to patients, as well as physicians. By setting the framework, we will assist L+M with developing a comprehensive marketing campaign to launch the Breast Health Center.

SITUATION ANALYSIS Environment (PESTEL+C) Political Cancer is the second leading cause of death in Connecticut, where the percentage of residents over 65 years of age is expected to go above 20% in 2030 (Gonsalves, et al., 2012). Cancer hospitalization costs in Connecticut have increased from $352.6 million to $809.2 million in the decade from 1999 to 2009 (State of Connecticut Department of Public Health). That same year, some 20,000 new cancers were diagnosed in Connecticut residents with breast, prostate, lung, and colorectal cancers accounting for over half of these diagnoses and approximately the same percentage of deaths (Gonsalves et al., 2012). The Breast Cancer Action group; a political advocacy organization based in San Francisco; highlights that serious inequalities exist among various racial and economic groups with respect to breast cancer. The death rate for African American women is the highest of any racial group, and women of color are less likely to receive treatment that is deemed standard of care (BCA, 2013). Women with lower incomes are less likely to be covered by employer-sponsored insurance, which clearly affects their access to treatment. To address these disparities, the CDC (2012) has suggested that optimal health-care delivery may be strengthened through performance-based reimbursement, expanded use of information technology, and quality assurance reporting-protocols. The CDC (2012) adds that proven effective interventions such as patient navigation could be expanded for use in other settings. According to Gonsalves and colleagues (2012), the incidence of breast cancer in Hispanic women in Connecticut is higher than expected relative to the Hispanic population in the U.S. This elevation may reflect the high proportion of Puerto Ricans in Connecticut relative to the US (53% in Connecticut versus 9% in US) (US Census, 2010). In Florida, at least one study has shown that Puerto Rican Hispanics have higher cancer rates than other Hispanic subgroups (Pinheiro et al., 2009). Although breast cancer is a popular bipartisan political issue, this popularity does not imply that all groups share the same interests or agree on strategies Weisman (2000). Rosser (2000), for example, has highlighted the biomedical models focus on causes of disease at the cellular, hormonal, and genetic levels to the exclusion of possible environmental or other causes. Steingraber (2000) further observes that despite the growing evidence suggesting that environmental pollutants increase breast cancer risk, there is a political reluctance to address these issues because they would require collective action, chemical regulation, and corporate change instead of addressing the disease on an individual level, where the responsibly and blame for the disease is on individual women.
6

Baralt and Weitz (2012) note that these critiques apply to breast cancer advocacy as well, and highlight that the corporatization of mainstream breast cancer advocacy, as reflected by the Komen Foundation, has created a conflict of interest in that some advocacy organizations may not be able to do what is best for womens health if it would offend their funding sources (pharma, for example). Economic Writing in DailyFinance, Sheryl Nance-Nash cites American Cancer Society statistics that a woman in the U.S. has a 12% chance of developing invasive breast cancer at some time in her life. The American Cancer Society estimates that 230,480 new cases of invasive breast cancer will be diagnosed in women in the U.S. every year, and nearly 40,000 women will die from the disease. Breast cancer is the second leading cause of cancer deaths in women. According to the National Cancer Institute, cancer care cost the American public $104.1 billion in 2006, with the largest portion, $13.9 billion, contributed by breast cancer (NanceNash, 2011). In the United States, the annual costs to fee-for-service Medicare for breast cancer screening-related procedures (including screening and workup) and treatment expenditures were $1.08 billion and $1.36 billion, respectively in 2006 to 2007 (Gross et al., 2013). For women 75 years or older, annual screening-related expenditures were in excess of $410 million. There is substantial regional variation that is driven by the use of newer and more expensive technologies. However, it is not clear whether higher screening expenditures are achieving better breast cancer outcomes. In addition to the economic toll to the health care system, there is a significant cost to affected individuals in the form of lost productivity, uncovered expenses, and psychosocial costs (e.g. increase in divorce rate). Social Advances in diagnostic screening and adjuvant therapy have dramatically increased the number of breast cancer survivors in the USA, who may face changes in physical and mental health, social support, quality of life and economics (Ellsworth et al., 2008). The literature on psychosocial aspects of breast cancer supports the conclusion that the clear majority of women adjust well to the diagnosis of breast cancer and manage to endure the complex and even toxic treatments associated with initial intervention and even later recurrence (Ganz, 2008). In studies that have looked at quality of life and depression after breast cancer, most patients and survivors demonstrate high levels of functioning in the period after primary treatment. For women who experience a recurrence of breast cancer, psychological wellbeing is still generally maintained (Ganz et al, 2002).
7

According to Ganz (2008), social support for the woman with breast cancer includes instrumental support, such as transportation to appointments, preparation of meals, and help with activities of daily living, as well as emotional support, meaning the availability of someone to share ones fears, feelings, and concerns. Inadequate levels of either of these two forms of social support can increase the likelihood of psychosocial distress. This may be particularly important in patients with advanced breast cancer. Moreover, women living with breast cancer are increasingly interested in lifestyle modification to decrease the risk of recurrence and mortality while increasing physical and emotional wellbeing (Ellsworth et al., 2008). While studies examining the effects of lifestyle on clinical outcomes including survival and prognosis have been inconclusive, the American Cancer Society continues to recommend a healthy diet, physical activity and stress reduction for decreasing breast cancer risk. With the number of breast cancer survivors predicted to increase to 3.4 million by 2015 (Ellsworth et al., 2008), it is important to develop effective treatment paradigms that overcome barriers to behavioral modification to improve clinical outcomes and survivorship in women with breast cancer. To this end, Meguerditchian and colleagues (2012) have recently shown that the quality of physician communication skills influences health-related decisions, including use of cancer screening tests. Technological Considerable progress in prevention, early detection and treatment has led to a reduction in the incidence and mortality of cancer, and resulted in significant improvements in survival (Gonsalves et al., 2012). However, even with these advances, disparities exist for certain populations in Connecticut. According to data from the Connecticut Tumor Registry, the four most commonly diagnosed cancers (breast, prostate, lung and colorectal) account for more than 50% of cancers diagnosed annually in Connecticut. Gonsalves et al. (2012) examined time trends and compared the incidence and mortality rates, stage at diagnosis, and survival and screening rates of cancer in Connecticut. These authors provide insight into opportunities to improve health and reduce illness disparities in residents of the state. For example, with respect to screening and prevention, mammography screening provides the opportunity to detect breast cancer at earlier and thus more treatable stages. In the US, recommendations regarding screening mammography have been issued by a number of professional groups including the US Preventive Services Task Force, and the American Cancer Society. In Connecticut in 2010, significant differences characterize mammography rates by income level (Gonsalves et al., 2012). Specifically, women over 50 years of age in lower income brackets (<$15,000 and $15,000$24,999) are significantly less likely to
8

have had a mammogram in the past two years compared to those in the highest income bracket. A similar relationship exists when rates are analyzed by education level. Thus, women without a high school education are much less likely to be compliant with screening recommendations than college graduates. Environmental (sustainability) In Connecticut, as in the US as a whole, (Kohler et al., 2011) invasive breast cancer is the most common cancer in women. Projections are that some 3,140 women will have been diagnosed with breast cancer in Connecticut in 2012, and 480 women will die from their disease (American Cancer Society, 2012). New London County has the highest cancer incidence rates in the state; 282 patients per year are diagnosed with breast cancer each year in New London County. In addition, benign breast health issues are also common. Among the best-recognized risk factors for breast cancer are age, personal health history (e.g. prior cancer diagnosis), family history of cancer (particularly early onset cancers), presence of the BRCA1 or BRCA2 genes, and reproductive history. In addition, as noted above, race and ethnicity and certain lifestyle factors (overweight, lack of physical activity, alcohol consumption.) By mitigating certain risk factors, women may help prevent breast cancer. Women who exercise regularly, who maintain a healthy weight (particularly after menopause) and who minimize alcohol consumption have a reduced risk of developing breast cancer. Legal The Womens Health and Cancer Rights Act (WHCRA) was passed to protect women with breast cancer who choose to have their breasts reconstructed after a mastectomy. It was signed into law in 1998. This federal law requires most group insurance plans that cover mastectomies to also cover breast reconstruction and was unchanged in the Affordable Care Act of 2010. However, the ACA does contain provisions relevant to cancer. For example, it removed lifetime dollar limits and restricted yearly dollar limits on health benefits starting in September 2010. It will also remove all yearly dollar limits in 2014. In addition, the ACA does not allow insurance companies to deny coverage for pre-existing conditions (like cancer) in children as of September 2010. The same treatment of preexisting condition exclusions will take effect for adults starting in 2014. Relatedly, the ACA does not allow insurance plans to stop coverage when patients get sick. At the state level, the ACA created state or federally run Pre-Existing Condition Insurance Plans (PCIPs) to cover people who have not had insurance for 6 months or more and have

cancer or another pre-existing condition. Importantly for breast cancer centers, the ACA ensures that coverage is available for patients who take part in clinical trials. Consumer Environment The consumer environment is characterized by both competition and fragmentation. Almost 85% of cancer care is provided on an outpatient basis; hospital-based programs will face more competition for these services as more providers and outpatient alternatives focus on cancer care. With respect to other hospital-based centers, the Backus Hospital, Middlesex Hospital, and Yale Smilow Cancer Hospital all have existing programs. There is thus an established primary care referral base that may not include L+M affiliated providers. Potential national competition is also growing; the Cancer Treatment Centers of America, for example, is a chain of affiliated hospitals (with one East Coast location in Philadelphia); its latest facility opened in Atlanta in 2012. Statewide, there are currently 17 hospitals in Connecticut that are accredited by the National Accreditation Program for Breast Centers (NAPBC), a certification that was developed by the American College of Surgeons (2013). Accreditation from the NAPBC requires 17 essential components for a center including: Imaging, Needle biopsy, Pathology, Interdisciplinary conference, Patient navigation, Genetic evaluation and management, Surgical care, Plastic surgery consultation/treatment, and Nursing. Accreditation also includes 27 standards of care. In order to achieve three-year/full accreditation, centers must provide all components and comply with at least 90% of the standards of care. Information about the availability of breast cancer-related clinical trials is also a requirement for NAPBC accreditation and is perceived as highly valuable for potential patients and families. By participating in a clinical trial, patients can access the latest treatments available, and some patients may be motivated to travel to L+M from outside of its usual catchment area. Summary of Environment Opportunities and Threats and Implications for Marketing Strategy Development From the political and legal standpoint, the momentum that eventually supported the passage of the Patient Protection and Affordable Care Act is also playing out with respect to breast cancer. Advocacy groups are increasingly voicing concern about racial, ethnic, and income disparities in access to service, and government is increasingly focusing on performance-based reimbursement and quality metrics. From a marketing perspective, it is clear that the market for L+M must be segmented and that specific approaches will need

10

to be developed for reaching the Hispanic population, the African American population, and the Caucasian population. From an economic standpoint, and in light of the political movement toward outcomes metrics and pay-for-performance, it will be important to strike a balance between investing in state-of-the art technology, and focusing on proven, evidence-based strategies for screening and early detection. The Center at L+M would be wise to incorporate a robust program for assessing and tracking both clinical outcomes and patient satisfaction. As noted above, different segments of the population will place differential value on some aspects of treatment, and being able to unpack the data by demographic will be very important. Some populations may require much greater attention to psychosocial aspects of their treatment and recovery for example. Enthusiasm for participation in research can be very different by demographic. Murphy and colleagues (2010), for example, studied willingness to participate in genetic research by race and ethnicity and observed that among Blacks and Hispanics, mistrust and wariness, and stigma were significantly increased in those unwilling to participate. The perceived benefit to society and importance for knowledge were associated with greater willingness to participate in Whites only. For Blacks and Hispanics, the population between 1829 years of age, and college education, partially reduced the association between wariness and mistrust and willingness to participate. The authors concluded that recruitment efforts aimed at increasing the representation of Blacks in research should take into account the barriers among those who are less educated, and such efforts should involve interactive community collaborations to address mistrust in this population. These same principles would likely obtain with respect to marketing the research components of the L+M Center. Lastly, the consumer environment is competitive. The Center clearly needs to achieve NAPBC accreditation, and will need to pay attention to internal marketing strategies to bring existing providers along. The process toward accreditation is burdensome and requires the active engagement in several different specialtieseach of which may feel a sense of ownership for breast cancer. Moreover, changes in existing practice on an individual provider basis as well as changes in institutional culture (consolidating breast cancer care in a new program) will be critical both to the initial creation of the center but also for its sustainability and success. Industry Classification and definition of Industry Breast cancer is the leading type of cancer in women with a prevalence of 123.1 per 100,000 women. It is also the leading cause of cancer deaths in women with a mortality rate of 38.6 per 100,000 women (CDC, 2013). According to The National Cancer Institute,
11

one in eight women will be diagnosed with breast cancer in her lifetime. The most recent numbers available indicate that as of Jan 1, 2009, there were 2,747,459 women alive with the disease (Breast Cancer.org, 2012). It is estimated that 226,970 women will have been diagnosed with breast cancer and 39,510 will have died from the disease in 2012 (NCI SEER, 2012). It is no wonder that with such prevalence, the National Cancer Institute increased its spending from $572.6 million in 2008 to $631.2million in 2010 (NCI, 2011). It is estimated that approximately $16.5 billion is spent in the United States each year on breast cancer treatment (NCI, 2012). The breast cancer industry consists of a multidisciplinary approach in management and care of the patient. These disciplines can be categorized as sectors and include Research and Support, Prevention and Assessment, Diagnostic Oncology, and Therapeutic and PostProcedural Oncology. Encompassing under these sectors are disciplines that vary in their nature from support services, to surgical oncology, clinical trials, and rehabilitation services. Studies have shown that these multidisciplinary approaches in patient management have contributed greatly to increased survival rate amongst breast cancer patients (NewsMedical, 2010). Driven by an aging population and an increase in survival rates the demand for oncology services is only going to increase. Currently 85% of cancer care is provided on an outpatient basis, and hospitals will only face more competition for these services as more providers and outpatient alternatives opt for greater focus on cancer management. As patients have more access to information and consumerism is increasing, it is only natural for health care providers to utilize a more coordinated approach to care delivery. Since care is becoming increasingly more complex and multidisciplinary, physicians must align with the hospitals in order to fully develop a cancer program. Furthermore, advances in technology such as targeted health therapy and new diagnostic tools will only result in the need for development of new standard treatment modalities. To address such needs hospitals are establishing partnerships with other institutions and marketing and building on their respective strengths. It appears that accreditation will be the key differentiating factor among the various cancer programs. Although participation in the accreditation process is voluntary, some of the noteworthy organizations that are involved in the accreditation and standardization process include the American College of Surgeons and the National Cancer Institute. Accreditation and Standards The National Accreditation Program for Breast Cancers (NAPBC) was established by the American College of Surgeons (ACOS) to ensure that standards of breast cancer management were met and that quality care was awarded through specific scientific validation and professional and patient education (ACOS, 2010). As highlighted above, as
12

an accreditation body for multidisciplinary breast cancer centers, NAPBC requires 17 essential components and 27 standards of care and ensures that the criterion for each of the disciplines is met (Figure 1). As highlighted in Figure 1, these components are diverse in scope and include data management and patient outreach and education, research and quality of life management, plastic surgery, radiation and medical oncology, among others. In order to qualify, centers have to demonstrate compliance of 90% or more of the standards of care, and meet all the essential components. In addition, to maintain accreditation centers will have to undergo on-site reviews every three years and collect and maintain data as part of their accreditation requirements.

Figure 1

Forecast on Breast Cancer Management From 2009 to 2011 there was an increase in the incidence of breast cancer cases in the counties of southeastern Connecticut and western Rhode Island by an average of 8.6%, from a low of 6.7% increase in incidence in the Kent County of Rhode Island to a high 11.7% incidence in the New London County of Connecticut (see appendix). Forecasts for the Northeast markets highlight a significant growth of breast cancer utilization over all sectors with the exception of medical admissions that will see a drop of 6% due to greater
13

hospice services and end-of-life care services. These areas of growth are due to advances on multiple fronts including new and improved chemotherapeutics that will increase survival, new tumor profiling and genetic assessment diagnostic tools, advances in reconstructive surgery and restructuring of the costs for screening modalities like mammography and MRI. Existing Competitors Three major competing cancer centers exist at the southeastern Connecticut area, including the Backus Hospital Breast Center, Middlesex Hospital Comprehensive Breast Center, and the Yale Smilow Cancer Hospital Breast Cancer Program. All three are NAPBC accredited and have access to clinical trial and research studies. With the exception of Middlesex Hospital, they are all American College of Radiology accredited breast imaging facilities. The staffs at both Backus Hospital and Yale Smilow include radiologists that specialize in breast imaging, while the ones at Middlesex are radiation oncologists. Both Backus and Middlesex Hospital have a nurse navigator program integrated into their program. Backus Hospital is a 213 bed hospital with a staff of 1800 people with about 300 expert physicians offering a wide variety of health services (Backus About Us). At Backus Hospital the medical director is also an associate professor at the Yale School of Medicine and the radiation therapy for the center is also provided by Yale Medical School. However, Eastern Connecticut Hematology Oncology and New London Cancer Center provide their medical oncology services. The ancillary services provided by Backus include lymphedema screening and treatment, social work, survivorship program, support group, and alternative therapies like massage and reiki. On the other hand, Middlesex Hospitals ancillary services include rehabilitation and distress management and hereditary risk assessment program; while Yales support services include social workers, pastoral care, nutritional guidance, physical therapy, and rehabilitation management. Lastly, Middlesex Hospital also has a center for Survivorship and Integrative Medicine. Potential new Entrants Any center that offers breast cancer management and or treatment has the potential to be competitive service provider. This includes any radiology center, medical consult clinics, physician/surgery group, oncology centers, and research institutes. Any establishment, small or large, can also serve as a potential competitor in providing ancillary services, for example, private physical and massage therapists, private social workers/guidance counselors, laboratories, and small individual private physician practices.

14

Substitute Products or Services Practitioners of allopathic medicine have seen increased competition from proponents and practitioners of Complementary and Alternative Medicine (CAM) in all aspect of disease and management, including cancer. A 2002 National Health Interview Survey found that 40% of cancer survivors have used CAM in management of cancer, with 18% using multiple forms of CAM (NCCAM, 2012). According to Patterson et al. (2002) women with breast cancer are more likely to used CAM and accordingly the rate of CM use in women with breast cancer has been reported to be as high as 75% (Wanchai et al, 2010). The rising cost of healthcare in the United States has also led to a rise in the medical tourism industry. According to the CDC, it is estimated that 750,000 U.S. residents travel abroad every year for medical care (CDC, 2012). Medical Tourism Corporation, a Better Business Bureau accredited business advertises low cost mastectomy procedures in international destinations like India, Jordan, Mexico, South Korea, and Turkey (Medical Tourism Corporation). A lot of these international hospitals have accreditation from Joint Commission International, a U.S. based accreditation body that sets standards for health care practice and management internationally (JCI, 2013). Suppliers Suppliers include the standard medical supply vendors that sell test tubes, drapes, syringes, etc; and also companies that sell and maintain diagnostic and imaging equipment. Furthermore, not only will the biotechnology and pharmaceutical sector, with their wide modality of treatments (drugs, vaccines, etc.), be an important component from the supply side, but also the health consulting and IT companies that provide bioinformatics, data, and technologic support for the latest research protocols and methodologies. Buyers The predominant consumers of these services are women who have been diagnosed with some form of breast cancer or individuals with a family history of breast cancer. Furthermore, more and more women are being proactive in managing and taking preliminary actions in preventing the disease, for example screening, self-breast examination and educating themselves about the disorder. Coupled with enhanced diagnostic techniques and an aging baby-boomer population, the incidence of breast cancer is only going to increase. The L&M primary service area has a population of 174,000 with females making up 49.7% of the total population. The female proportion is slightly lower than that of the U.S. and the state of Connecticut, where the percentages are 50.7% and 51.2% respectively (U.S. Census Bureau, 2010.). According to the 2010 U.S. census, 91.9% of the populace in New London
15

County is insured with 77.1% having private health insurance and 28.2% having public sector health insurance. This health insurance coverage of L&M primary service is higher than that of the national coverage rate of 84.5% (U.S. Census Bureau, 2010). Other health care professionals are also potential buyers of the services and products offered by L&M Breast Center. These professionals may include primary care physicians or specialists such as pathologists and oncologists that may refer their patients for imaging, laboratory and therapeutic services not available in their clinic. In addition, biotechnology and pharmaceutical companies may also seek consulting and specialty services to aid in their research and product development, and in management and execution clinical drug trials. Summary of Industry Opportunities and Threats With an increase in survival rate, an aging boomer population and advances in diagnostic techniques, the demand for breast cancer center is only going to increase. Furthermore, the increase in sophistication and knowledge of the contemporary consumer will only add to the demand for an NAPBC accredited center. These centers will not just be desired but demanded as knowledge of accreditation, procedures, and accredited centers becomes more main stream. Therefore improving the current standards and management is warranted for L&M Breast Cancer in order for it to maintain its current market standing and earn more market share in the breast care management services. Reforms and rising cost of the U.S. healthcare in general, combined with an unsettling economy, risks negatively impacting the development strategy of L&M Breast Center. With the advent of medical tourism and CAMs offering cheaper alternatives, efficient marketing and management is warranted to minimize the loss of market shares from any of these circumstances. Implications for Marketing Strategy Development Considering there are three competitors in the Southeastern Connecticut area, establishing a marketing niche is vital to ensure success of the breast cancer center. This would require consumer education of the role early diagnosis plays in improving clinical outcome of the disease, improving patient teaching of drugs and their side-effects to improve patient compliance, customizing patient management plans, and implementing a variety of payment options and health insurance plans. Although such strategies may be concurrently employed by the other competitors, emphasizing patient outcomes and the virtues of these implementations by providing data in advertisements may help in setting L&M Breast Center apart from its competitors.

16

Organization Objectives and Constraints L+M Breast Health Center will develop a comprehensive breast health program and a coordinated approach to care delivery pertaining to diagnosis and treatment of breast disease. Utilizing advances in technology, research and a newly formed partnership with Dana-Farber Cancer Institute, L+M will deliver new treatment options for breast cancer patients in eastern Connecticut and southwestern Rhode Island. Currently, L+M has many components of comprehensive breast health program; however, services are fragmented and there are opportunities to improve coordination of care among disciplines. Also, the untimely access to care and results (diagnostic, lab or ancillary procedures) has been an issue resulting in patients leaving the area. It has been observed that lumpectomy and mastectomy surgical volumes have declined since 2009. Financial Conditions L +M Breast Health Program will get its annual operating budget from the projected increased surgical cases, breast lumpectomy and mastectomy as well as with ancillary net revenue such as lab testing, EKG, surgical reconstruction, outpatient physical therapy and incremental physician revenue. In its early stage of operation (1-3 years), the funding will be originating from the hospitals revenue from other division or other departmental revenues. By Year 3 of operation, incremental volumes are expected to result in a positive operating margin. Other costs associated with the Center include staffing, medical director fees, accreditation fees, education expense, marketing, information services support, and other physician fees. Capital needs include equipment for linear accelerator to be purchased in Year 2 of operation. Management Philosophy L + Ms management philosophy will be based on open communication and collaboration amongst numerous physicians and staff. At L+M, the majority of leaders and employees have taken a two-day seminar called Crucial Conversations that emphasizes and teaches conversational skills. The tools learned at the seminar play into their management philosophy of keeping communication flowing and rich. Creating a positive work environment and building strong relationships, especially between physicians, will definitely play a role in the success of the Centers future. However, there are some underlying issues with the program and its future management. It is still unknown to whom the staff will report to because there is currently no manager
17

for the program. The Medical Director is leading the charge, but it is unclear if she has the skillset to run the operational side of the program. Furthermore, there are many other Specialists playing key roles that have very strong opinions and are still evaluating the new Medical Director. Getting consensus has been challenging and success depends on it.

Organization Structure L+ M Breast Health Program will operate within L+M, a private, not-for-profit, acute care hospital. A decision was made by the steering committee not to have the Center located in the new Cancer Center due to the fact that benign breast disease is being treated as well and there may be a stigma about going to a cancer center for care. The program will be led by a Medical Director, Dr. Elizabeth Arguelles, a board certified surgeon. She started her tenure at L+M in February 2012. The rest of the team is comprised of board certified and fellowship trained breast radiologists; oncologists, pathologists, radiology technicians, specialized nurses and a patient navigator and coordinator. The Medical Director leads a steering committee that includes a physician from each specialty, as well as the Director of Planning, VP of Strategic Planning and the VP of L+M Physician Associates (employed physicians). The committee currently meets once a month to develop the programs policies and procedures and establish consensus amongst physicians. Organizational Culture The Mission and the Vision of L+M are to improve the health of this region and to provide an innovative, compassionate and community-focused system of care to their patients and families. L+Ms partnership with Dana-Farber, Yales Radiation Oncology group and the launch of a Breast Health Center reflect these values toward providing their community with top-notch medical care close to home. The Breast Health Center will nurture frictionless collaboration and participation by numerous physicians and support staff members that are vital to the success of the program. It will provide ongoing training not only with the latest treatment, but provide caring, compassionate and nurturing support group through the survivorship program. Summary of L & M Breast Health Program Strength and Weaknesses L+M has all the components to create a successful program, including their partnerships with Dana-Farber Cancer Institute (DFCI) and Yale-New Haven Hospital to provide medical and radiation oncology services, respectively. Furthermore, L+M is a designated Breast Imaging Center of Excellence by the American College of Radiology in mammography, stereotactic breast biopsy, breast ultrasound and ultrasound-guided breast biopsy.
18

The perceived weakness were identified as the following: L+M may not meet volume forecasts due to market changes, competitive factors that are more intense than anticipated, and the internal structure envisioned for the program may fail before the program is able to grow volume. Also, financial resources may play a role in the success of the program, as the hospital will potentially lose 2.8 million this year (22 million over three years) from reimbursement changes proposed by Connecticuts Senator. As a result budgets for new and existing services line may be cut. Implications for Marketing Strategy Development Competing with the three main competitors in the vicinity means much more than just improving service. It is vital to have excellence across the board such as in the areas of people, service, quality, finance, and growth. Therefore, the success of L+M Breast Health Program will rely heavily in sustaining a culture of excellence by the organizations Board of Directors/Medical Director, employees, and physicians. In this case, a well-qualified Medical Director, a board certified surgeon, was selected upon careful and rigorous review and eventually endorsed by The Physician Advisory Council (PAC). With this, a wellproduced video and warm welcome letter by the medical director should be incorporated in almost all marketing strategies such as the use of the internet, brochure or multi media campaign to emphasize the strength of the organization. A rigorous selection process will be implemented in hiring a clinical manager and patient coordinator who has an important role in the organization such as to expedite processes related to the breast diagnostic process including communication, scheduling, referrals, patient support, and tracking of data to name a few. L+M will emphasize the organizational members/personnel in its marketing paraphernalia such as mentioning its highly talented physicians (diagnostic radiology, pathology, surgery, medical oncology, and radiation oncology), who are all productive members of this community and are committed to the long-established tradition of community involvement to raise awareness and perhaps funding for cancer research. Photos portraying camaraderie of the organizations trained team of doctors, researchers, nurses and healthcare professionals will be included as well in the marketing campaign mentioned assuring the confidence of their community that they will be provided with groundbreaking treatments on the healing edge of breast cancer treatment with a compassionate healthcare team. Along with this, L+M Breast Health Program will emphasize its ultimate mission-to heal, to support the emotional well-being needed to the patient and family and L+M Breast Health Program is the patients ally in the fight against Breast Cancer. Company Marketing Strategy
19

In the era of the Affordable Care Act and established competitors that serve patients who require breast healthcare, L+M needs a set of well-developed marketing strategies that can provide the framework required to gain a sustainable competitive advantage as a competitor in the breast healthcare provider market. According to Porter (2008), competitive marketing strategies are defined along two dimensions: strategic scope and strategic strength. Strategic scope is a demand-side dimension and looks at the size and composition of the market you intend to target. Strategic strength is a supply-side dimension and looks at the strength or core competency of the firm (Porter, 2008). In his 1980 classic Competitive Strategy: Techniques for Analyzing Industries and Competitors, Porter simplifies the scheme by reducing it down to the three best strategies. They are cost leadership, differentiation, and market segmentation (or focus). Market segmentation is narrow in scope while both cost leadership and differentiation are relatively broad in market scope (Porter, 1980). These three competitive strategies still hold true to their element, and their principles have provided L+M a roadmap to create a strategic marketing framework. In the past L+M as a hospital has used several marketing techniques. L+M runs advertisements in three local newspapers: The New London Day, which covers its primary service area of New London, CT; The Norwich Bulletin, which covers its secondary service area of Norwich, CT and The Westerly Sun, which covers its southwestern service area of Westerly, Rhode Island. In addition to newspaper advertisements, L+M marketing team also designs brochures that are distributed to local Primary Care and Specialist practices by the Physician Liaison team. The Physician Liaisons are responsible for building strong relationships with community physicians and specialists. They also onboard new, employed physicians to the healthcare community through one-on-one introductions, meet and greets and community outreach (lectures.) The Liaisons play a vital role in the marketing of new service lines and informing the physician community about new technologies and specialty services that will help them better serve their patients (L + M Hospital). L+M hospital uses the direct marketing technique of placing billboards around the New London, CT area, preferably alongside major freeways for maximum visibility. L+M has decided not to use the direct marketing technique of television because its cost prohibitive. L+M has invested in radio advertisements; however, it has not been able to measure the return on investment in spending money on radio ads. L+M is actively using social media such as Facebook and Twitter to engage its current patient population in meaningful discussions where it features current hospital physicians and nurses. The Facebook page has over 4,000 followers and over 400 twitter followers.

20

L+M hospital marketing team has analyzed the strategic scope and developed a set of marketing strategies that will provide it a sustainable competitive edge in the breast healthcare market. Strategies focus on providing the targeted patient population the highest value and quality of care, along with best patient satisfaction experience. The initial focus will be to gain a presence in the breast healthcare provider market. The marketing techniques being considered are as follows. L+M Breast Cancer Center will use a dedicated service line logo to establish its brand (see below)

A dedicated web page: www.lmbreastcenter.org will also be launched and an effort will be made to drive traffic to the site. The site will include the following: Overview, Our Team, Locations/Call-to-Action tabs Patient Stories video module Patient satisfaction testimonials Informative brochures for potential referring physicians and potential patients A multi media campaign will be launched in the form of: Print ads Billboards The Physician Liaison team will perform outreach with the medical director and distribute brochures to inform referring physicians of the new service line. Set up a series of community lectures by L+M physicians. Topic breast health and services provided. The Public Relations (PR) team will use the following platforms to perform outreach in the community: Press Release and proactive media story pitch Facebook, You Tube and Twitter postings Feature story in L+M Magazine To ensure employee knowledge of the new Breast Health Center L+M will launch an internal communication campaign, which will consist of: Feature story in hospital newsletters: Circulate, Inform and the Physician Newsletter Internal signage in appropriate staff and physician areas and ads on TV monitors Objectives

21

The objective of the above stated marketing strategies is to increase the market share of L+M Breast Health Center in the breast healthcare service industry. Reach maximum amount of breast healthcare service recipients (patients). Reach maximum amount of referring physicians. Constraint The campaign may not yield sufficient patient volume from physician referrals of existing hospital patients, and potential referring physicians may have existing working relationships with other reputable entities (competitors) within the New London, CT area. Informative brochures and introductions with the Medical Director may not be enough to change referral patterns, leading to less than effective results from the marketing campaign. Sales, Profits, and Market Share New London County has the highest cancer incidence rates in the state of New England, CT. There are 282 patients per year who are diagnosed with breast cancer in the New London County. Lately, there has been a rise in the incidences of benign breast cancer. The surgical volume for L+M has declined by almost 20%. In 2009 there were 160 cases, and in 2012 there were only 130. The focus of the marketing program is to increase the surgical volume to 250 cases by the year 2018. This is a conservative estimate of a 5-year growth plan. L+M Market Share Trends in Total Breast Healthcare Service Area 2009 2010 2011 2012 YTD 47.2% 36.4%

Lumpectomy Mastectomy

56.5% 25.7%

58.8% 20.2%

46.6% 20.3%

The above stated statistics for lumpectomy show a decline of 9.2% in market share from year 2009-2012. The mastectomy market share came up significantly after a 2-year decline between years 2009-2012. Target Markets As previously mentioned, an understanding of market segmentation or focus markets is very important to gain a sustainable competitive advantage. According to Porter (2008) a
22

business can choose to compete in the mass market (like Wal-Mart) with a broad scope, or in a defined, focused market segment with a narrow scope, such as the case of breast healthcare provider service, in either case, the basis of competition will still be either cost leadership or differentiation. In adopting a narrow focus, the company ideally focuses on a few target markets (also called a segmentation strategy or niche strategy). These should be distinct groups with specialized needs (Porter, 2008). The breast healthcare service recipients are a distinct group and a niche market with specialized needs. To capture maximum share of this niche market, the focus of L+Ms Breast Healthcare Center will remain on providing high patient satisfaction experience, and value driven quality of care. L+Ms current primary service area consists of a population of 174,000, and out of which 49.7% are females, and within the female population service recipients are predominantly Caucasian with a small percentage of African-American and Hispanic females. As previously mentioned, the highest populations prone to breast cancer are African-American and Hispanic, women. Below is a breakdown of the L+M total primary service area and target adult female population, obtained through the US Census 2010. Total population primary service area 174,000 100% Total female population 86,478 49.7% African-American female population 5488 3.1% Hispanic female population 8128 4.6% Caucasian female population 36,234 41.9% Currently L+M hospital is not using demographic information to target specific population(s) as part of its marketing strategy. However, the GWU marketing team sees great value in using demographic data analytics to target focused markets to reach out to potential new patients in an expeditious manner. This technique will be discussed with L+M marketing team in the future. Marketing Mix Variables Product and Place In the fall of 2013 L+M will open a new Cancer Center in affiliation with Dana-Farber Cancer Institute in Waterford, CT. L+M is launching the Breast Health Center to treat both benign and malignant breast disease. This new initiative will allow patients to get their cancer treatment in a timely manner, and conveniently at one place. The goal of the new program is to elevate the level of care provided to patients throughout the continuum of care. From diagnosis to post-treatment care, patients treatment will be expedited,
23

individualized, and coordinated among a multidisciplinary team, which will include support services, surgical oncology and rehabilitation services.

Price and Promotion As stated earlier, according to the National Cancer Institute, cancer care cost the American public $104.1 billion in 2006, with the largest portion, $13.9 billion, contributed by breast cancer. L+M is a not-for-profit organization and it plans to capture maximum market share by offering affordable, competitive prices to its customers (direct customers or insurance companies). As stated above L+M plans to use several marketing techniques to promote its new breast care center. L+M plans to include a dedicated service line logo, a user-friendly website, print ads in newspapers, billboards, brochures, internal marketing and social media. Summary of Marketing Strategy Strengths and Weaknesses Strengths L+M Hospital is focused on leveraging its well-established name and branding the Breast Care Center as a state of the art service line. The hospital plans to use established techniques that have assumingly led to previous successes in business development. Social media such as Facebook and Twitter have been a good way to reach younger and middle aged clients. Currently L+M has over 4,000 Facebook followers and over 400 Twitter followers. Weaknesses Based on our analysis L+M is not using any demographic analytics as part of its marketing techniques. The target population for the breast care center (African American or Hispanic women) is not well defined. L+M is currently not using performance measurement metrics to determine whether a marketing technique has been effective or not, for example radio advertisements. At this time, there are no marketing techniques listed in the plan to use search engines such as Yahoo, Google, Safari or Bing to promote the Breast Care Center as a leader in providing breast healthcare service in the New London, Connecticut area. Implications for Marketing Strategy Development L+M Hospital has several marketing techniques that it has used in the past. It has used print ads, billboards, brochures, the Physician Liaison team and social media to promote the Hospital and new service lines. L+M plans to use the same techniques to promote the new Breast Health Center. Print ads, billboards and social media will be used. The Physician
24

Liaison team will perform outreach with the Medical Director and distribute brochures to inform referring physicians of the new service line. Community lectures will be set up to inform the community about breast health and the new center. In addition to the external campaign L+M Hospital will also market internally. The goal is to promote internal buy in of physicians as well as other stakeholders. This will be accomplished by featuring a story in the hospital newsletters: Circulate, Inform; as well as placing signage in appropriate staff areas. Currently L+M hospital does not have a way of measuring the effectiveness of the various marketing techniques that it is using. There are no measurable metrics to show which technique is the best, or the least efficacious. L+M Hospital has a target volume that it would like to meet, but it does not know which of the marketing techniques is either increasing or suppressing its target volume goal. Lack of having a marketing analytics approach can lead to bad decision-making and a waste of marketing budget allocation. The total population in L+M Hospitals primary service area is 174,000. Out of this, 49.7% are females. 3.1% are African American females and 4.6% are Hispanic females. As stated earlier, the highest incidence of breast cancer is among the Hispanic population; L+M hospital lacks the use of demographics to target this particular population. The GWU team believes that this is an important group to target and it will work with L+M to develop this further. Currently L+M marketing team also out sources some of its marketing capabilities to a marketing company called Outthink. L+M marketing team will work with Outthink to ascertain needs to promote internal buy in from its staff and its physicians. The Medical Director of the new Breast Health Center can also improve buy in for the center, by visiting with the staff as well as with the primary care physicians. SWOT/ Strategic Capabilities Analysis Strengths L+Ms strengths in developing a comprehensive Breast Health Center include their strategic plan to strengthen oncology and surgery service lines, their comprehensive vision of the center, and their newly created affiliation with Dana-Farber Cancer Institute (DFCI). One of L+Ms strategic priorities is to grow and expand oncology and surgery service lines. As of January, L+M has a new Chief of Surgery who is determined to improve and elevate the surgical services offered by L+M. In September of 2013, L+M is opening a new cancer center in affiliation with Dana-Farber Cancer Institute, which will offer patients access to clinical trials and the advancement of evidence-based medicine. L+Ms relationship with a world-renowned cancer institution provides the community with world-class cancer care,
25

close to home; no longer will patients and families have to drive two hours to Boston or New York. L+Ms steering committee, led by the Medical Director, is working on gathering the data to achieve program accreditation with the National Accreditation Program for Breast Centers (NAPBC). Accreditation by NAPBC will raise awareness of L+Ms comprehensive program and demonstrate their commitment to a multidisciplinary approach to care. In addition to accreditation, the programs business plan proposes a number of enhancements to L+Ms breast health services including pre-treatment conferences, access to clinical trials, and patient navigator and coordinator services. Weaknesses Developing a new center of excellence requires significant collaboration and participation by numerous physicians and support staff. Services are currently fragmented and are located in multiple buildings and practices. Furthermore, the physicians interests and needs must coincide with the hospital in order to fully develop a program. For example, besides aligning the radiologists and surgeons, there are two competing oncology practices that need to come to consensus regarding the direction of the program and implementing new policies and procedures. Securing physician support and cooperation from key members and other specialists, has been a challenge for L+M. Changes in procedures, like who is responsible for communicating to patients they have cancer, has caused some tension amongst specialists. In the past Radiologist shared that information with the patients, but under new procedures the referring physician, like primary care or obstetrician, will be responsible. Another area of concern is being able to coordinate care and timing of care between the different disciplines. Timely access and delayed results have been an issue and the perception is residents are leaving the market for care as a result. Flexibility in scheduling is required to accommodate timely visits; L+M is currently working on this initiative. Lastly, L+Ms breast surgery market share has declined 15% since 2009 due to loss of three surgeons coupled with competitor initiatives. One of the female surgeons moved to a local competitor and she continues to receive referrals from L+Ms two largest female primary care practices. Opportunities L+M has many opportunities to successfully implement a new Breast Health Center. The demand for oncology services is growing in L+Ms primary service area, driven by population growth, aging and an increase in survival rates.

26

Increasing patient access to information and offering coordinated care through timely appointments, individualized treatment plans, and a multidisciplinary approach will improve patient care and differentiate L+Ms Center. L+M also has the opportunity to improve collaboration among physicians and create a more comprehensive, streamlined service line. Furthermore, by defining the value of program (high tech, high touch, high quality) to patients, as well as referring physicians, will lead to changes in referral patterns. With a successful marketing campaign and well-coordinated team approach to breast health care, L+M can increase their breast surgery volume and market share. In turn, this will also create downstream volume and revenue. The incremental volumes are expected to result in a positive operating margin by Year 3 of program operation. Threats Increased competition is L+Ms biggest threat and its not only from other hospitals, but outpatient centers as well. As more providers and outpatient alternatives focus on cancer care, hospitals will face more competition for these services. The main competitor hospitals, Backus Hospital Breast Center, Middlesex Hospital Comprehensive Breast Center, Yale Smilow Cancer Hospital and others capture 31% of L+M primary service area market share. This is does not include the percentage of patients that leave the state to go to Boston or New York City for their cancer care. Another threat to the Breast Health Centers success is physician loyalty. Primary care physicians make up the majority of the referral base and many have existing allegiances to physicians that may not be affiliated with L+M. It is difficult to change long-standing referral patterns and L+Ms new Breast Health Center will need to demonstrate comprehensive and coordinated services and clinical distinction. Not only is physician loyalty a potential issue, the Association of American Medical Colleges (AAMC) Center for Workforce Studies claims that the projected demand for Medical and Radiation Oncologists is going to far exceed the supply by 2025. (Dill, et al., 2008) L+M currently has strong relationship with their Medical and Radiation Oncologist, but its important to understand the future directions of these Specialties. Finally, to control the rising cost of healthcare, state and federal governments, as well as private insurance companies, are going to squeeze reimbursement rates. This will require L+M to work lean and efficiently to provide highly coordinated care. Using a multidisciplinary team approach can help achieve these goals and improve patient outcomes.

27

SWOT
Strengths Affiliation with Dana-Farber Cancer Institute Strategic priority to grow oncology and surgery service lines Working on accreditation with the NAPBC Weaknesses Physician buy-in questionable Lack of scheduling flexibility Market share declined since 2009 All services are not in one building Opportunities Improve patient access to information Coordinate care Define value of the program Improve collaboration among physicians Increase breast surgery volume and market share Create downstream volume and revenue Threats Increased competition Physician loyalty Workforce shortages Reimbursement squeeze

Summary L+Ms proposed Breast Health Center aims to elevate the level of care breast health patients receive and to provide treatment that is individualized and coordinated among a multidisciplinary team. The program also aligns with L+Ms strategic vision to grow their oncology and surgery service lines. Through research analysis, the GW team found that the high incident rate of cancer and the demographics of the population in the primary service area warrant a comprehensive center for breast health. L+M is also faced with tough competition, with three accredited breast centers within a fifty-mile radius, looking to increase their market share. It is anticipated that the partnership with Dana-Farber Cancer Institute, the opening of a new Cancer Center this September, the hiring of three new general surgeons and the anticipated accreditation of L+Ms program in early 2014, will result in an increase in market share, as well as surgery and ancillary volumes. With the Situation Analysis complete, the GW team hopes to create a strategic marketing plan that will distinguish L+M from their competitors and will target both physicians and the community. Establishing physician and community awareness and confidence in the services provided will be key components to the success of the program.

28

APPENDIX Financial Profit and Loss Statement, L+M Hospital Breast Center (Shraddha Patel, Director of Planning)
Lawrence & Memorial Hospital Project: Breast Center Forecasted Profit and Loss Statement Assumptions: Incremental to FY 2012 volume Based on "Anticipated" Volume Projections Year 1 = FY 2013, Year 2 = FY 2014, etc. FY 2013 Year 1 Volume Incremental Surgical Cases - Breast Incremental Physician revenue Total Ancillary Volume EKG Lab Imaging Surgical Reconstruction Outpatient Physical Therapy Average Rate/Case w/ Ancillaries Total Net Revenue $ $ 50 50 50 100 100 100 110 110 110 120 120 120 380 380 380 FY 2014 Year 2 FY 2015 Year 3 FY 2016 Year 4 FY 2017 Year 5 Total Rate per Procedure $ 3,720 $ 594 Notes 130 cases in FY 2012 Volume Projections year 0 year 1 year 2 year 3 year 4 year 5 130 130 180 230 240 250

$ $

7 50 12 8 4,774 $ 238,708 $

14 100 23 15 4,774 $ 477,416 $

16 110 25 17 4,774 $ 525,157 $

17 120 28 18 4,774 $ 572,899 $

54 380 88 57 4,774 1,814,180

$ $ $ $ $

28 50 283 1,500 400

14% 100% 0% 23% 15%

of all cases of all cases of all cases of all cases of all cases

Ultrasound and Mammo Rate is contribution margin

Operating Expenses Direct Expenses Salaries & Wages Professional Fees Cosmetic Fee Non Salary Total Direct Expenses

$ $ $ $ $

35,360 35,700 17,008 88,068

$ $ $ $ $

122,720 35,700 23,077 76,346 257,842

$ $ $ $ $

122,720 35,700 46,154 121,683 326,257

$ $ $ $ $

122,720 35,700 50,769 132,551 341,740

$ $ $ $ $

122,720 35,700 55,385 138,418 352,223

$ $ $ $ $

526,240 178,500 175,385 486,005 1,366,130

2,000

Indirect Expenses Fringe Benefits Other Indirect Depreciation Total Indirect Expenses

$ $ $ $

9,547 8,807 18,354

$ $ $ $

33,134 25,784 350 59,269

$ $ $ $

33,134 32,626 700 66,460

$ $ $ $

33,134 34,174 700 68,008

$ $ $ $

33,134 35,222 700 69,057

$ $ $ $

142,085 136,613 2,450 281,148

27% 10%

% of total salaries % of total direct expenses

Total Operating Expenses Operating Income (Loss) Cumulative Income Salary Detail: Nurse Navigator Data Extractor

$ $

106,422 $ (106,422) $ $

317,111 $ (78,403) $ (184,825) $

392,717 $ 84,699 $ (100,126) $

409,748 $ 115,409 $ 15,283 $

421,279 $ 151,620 $ 166,903

1,647,277 166,903 Base Salary $ 70,720 $ 52,000 $ Annual Increase 0.0% 0.0%

$ $ $ $

35,360 35,360

$ $ $ $

70,720 52,000 122,720

$ $ $ $

70,720 52,000 122,720

$ $ $ $

70,720 52,000 122,720

$ $ $ $

70,720 52,000 122,720

$ $ $ $

70,720 52,000 122,720

Non Salary Detail: Estimated Cost/Surgical Case - breast Accrediation Fees Education Expense Marketing IS support Medical Director Subtotal Depreciation: Breast Board $ $ 350 $ 700 $ 700 $ 700 $ $ $ $ $ $ $ $ 1,000 15,000 1,008 35,700 52,708 $ $ $ $ $ $ $ 54,338 4,000 2,000 15,000 1,008 35,700 112,046 $ $ $ $ $ $ $ 108,675 2,000 10,000 1,008 35,700 157,383 $ $ $ $ $ $ $ 119,543 2,000 10,000 1,008 35,700 168,251 $ $ $ $ $ $ $ 130,410 2,000 2,000 3,000 1,008 35,700 174,118 Amount 7,000

Rate per Procedure $ 1,087

Includes staff in OR

Years of Service 10

29

Primary (Green) and Secondary (White) Services Areas

Incidence of Breast Cancer (Shraddha Patel, Director of Planning) County New London (CT) Windham (CT) Middlesex (CT) Washington (RI) Kent (RI) 2009 Incidence 263 102 170 107 118 2011 Incidence 282 114 187 115 126

30

Activity Timeline, FY 2012 FY 2014 (Shraddha Patel, Director of Planning)

FY FY 2013 FY 2014 2012 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Physician Planning Meetings Business Plan Development Board Approval NAPBC Accreditation Planning Staff (1) Recruitment (Navigator, Coordinator) Media/PR Campaign NAPBC Application Filing/OnSite Survey Breast Prog. Leadership (BPL) Meetings Quarterly Business Development Meetings

31

References Cited: Advisory Board Web Site. Available at: http://www.advisory.com. Accessed February 25, 2013. American Cancer Society. The Affordable Care Act: How it helps people with cancer and their families. 2010, American Cancer Society, Inc. No.560000 REV. 05/11 American Cancer Society. Cancer Facts and Figures 2012. Atlanta, GA: American Cancer Society; 2012. Available at: http://www.cancer.org/research/CancerFactsFigures/CancerFactsFigures/cancer-factsfigures-2012. American College of Surgeons. Cancer Programs. Accessed at: http://napbc-breast.org/ American College of Surgeons (Nov. 2010). National Accreditation Program for Breast Centers. What is NAPBC? Retrieved from http://napbc-breast.org/about/what.html Association of American Medical Colleges (AAMC) Center for Workforce Studies. Forecasting the Supply of and Demand for Oncologists. A Report to ASCO From the AAMC Center for Workforce Studies, March 2007. Backus About Us. For more than 117 years, Backus Hospital has provided quality healthcare to the residents of eastern Connecticut. Retrieved from http://backushospital.org/about-us.html Baralt, L, Weitz TA. The KomenPlanned Parenthood Controversy: Bringing the Politics of Breast Cancer Advocacy to the Forefront. Womens Health Issues 22-6 (2012) e509-e512. Breast Cancer Action. Inequities and Social Justice. Accessed at: http://bcaction.org/ourtake-on-breast-cancer/politics-of-breast-cancer/inequities-and-social-justice/ BreastCancer.Org (Oct., 2012). U.S. Breast Cancer Statistics. Retrieved from http://www.breastcancer.org/symptoms/understand_bc/statistics Collins, J.C., Good to Great. New York, NY: Harper Collins: 2001:17-40. Centers for Disease Control (CDC). Vital Signs: Racial Disparities in Breast Cancer Severity United States, 20052009. Morbidity and Mortality Weekly Report (MMWR). November 16, 2012; Vol. 61, No. 45: 922-926.

32

Center for Disease Control and Prevention (Feb., 2012). Medical Tourism Getting Medical Care in Another Country. Retrieved from http://www.cdc.gov/Features/MedicalTourism/ Centers for Disease Control and Prevention (Jan, 2013). Cancer Prevention and Control. Cancer Among Women. Retrieved from http://www.cdc.gov/cancer/dcpc/data/women.htm Connecticut State Data Center. Statewide Projection Data: Statewide Projections. Storrs, Connecticut: Connecticut State Data Center. Available at: http://ctsdc.uconn.edu/projections/ state_wide.html. Dill MJ, Salsberg ES. The Complexities of Physician Supply and Demand: Projection Through 2025. Association of American Medical Colleges. Nov 2008: 19-24. Ellsworth RE, Valente AL, Shriver CD, Bittman B, Ellsworth DL. Impact of lifestyle factors on prognosis among breast cancer survivors in the USA. Expert Rev Pharmacoecon Outcomes Res. 2012 Aug;12(4):451-64. Ganz PA, Desmond KA, Leedham B, et al: Quality of life in long-term, disease-free survivors of breast cancer: A follow-up study. J Natl Cancer Inst 94:39-49, 2002. Ganz, P (2008). Psychological and Social aspects of breast cancer. Oncology 22(6). Accessed at: http://www.cancernetwork.com/breastcancer/content/article/10165/1160706# Gonsalves L, Cartmel B, Mueller L. The burden of cancer in Connecticut. Conn Med. 2012 Jun-Jul;76(6):335-51. Gross CP, Long JB, Ross JS, Abu-Khalaf MM, Wang R, Killelea BK, Gold HT, Chagpar AB, Ma X. The Cost of Breast Cancer Screening in the Medicare Population. JAMA Intern Med. 2013 Jan 7:1-7. doi: 10.1001/jamainternmed.2013.1397. [Epub ahead of print] Joint Commission International (2013). Retrieved from http://www.jointcommissioninternational.org/ Khatcheressian, J.L., Hurley, P., Bantug, E., Esserman, L.J., Breast Cancer Follow-Up and Management After Primary Treatment: American Society of Clinical Oncology Clinical Practice Update. Journal of Clinical Oncology, Dec. 10, 2012. Available at: http://jco.asco pubs.org/content/early/2012/11/3. Accessed at February 24, 2013. Kohler BA, Ward E, McCarthy BJ, et al. Annual report to the nation on the status of cancer, 19752007, featuring tumors of the brain and other nervous system. J Natl Cancer Inst 2011; 103:71436.
33

Mark Nicholls (March, 2012). Multi-disciplinary team approach offers better breast cancer care. European Hospital. Retreived from http://www.europeanhospital.com/en/article/9517-Multi disciplinary_team_approach_offers_better_breast_cancer_care.html Medical Tourism Corporation. Low Cost Mastectomy Surgery, Abroad. Retrieved from http://www.medicaltourismco.com/oncolog/mastectomy-surgery-abroad.php Meguerditchian AN, Dauphinee D, Girard N, Eguale T, Riedel K, Jacques A, Meterissian S, Buckeridge DL, Abrahamowicz M, Tamblyn R. Do physician communication skills influence screening mammography utilization? BMC Health Serv Res. 2012 Jul 25;12:219. Nance-Nash, S. Breast Cancers Financial Toll: The High Cost of Fighting for your Life. DailyFinance, 10/5/11. Accessed at: http://www.dailyfinance.com/2011/10/05/breastcancers-financial-toll-the-high-cost-of-fighting-for-yo/ National Cancer Institute at the National Institutes of Health (June, 2011). National Cancer Institute Factsheet . Cancer Research Funding. Retrieved from http://www.cancer.gov/cancertopics/factsheet/NCI/research-funding National Cancer Institute (2012). Surveillance Epidemiology and End Results. Retrieved from http://seer.cancer.gov/statfacts/html/breast.html National Cancer Institute (Oct, 2012). A Snapshot of Breast Cancer. Retrieved from http://www.cancer.gov/researchandfunding/snapshots/pdf/Breast-Snapshot.pdf National Center for Complementary and Alternative Medicince (March, 2012). Cancer and Complementary Health Practices. Retrieved from http://nccam.nih.gov/health/cancer/camcancer.htm NewsMedical (Sept, 2010). Multi-disciplinary approach increases breast cancer survival rate: Study. Retrieved from http://www.news-medical.net/news/20100930/Multidisciplinary-approach-increases-breast-cancer-survival-rate-Study.aspx?page=2 Official L+M Hospital website: http://www.lmhospital.org/healthcareprofessionals/physician-liaison-program.aspx Parinello, A., Secrets of Vito: Think and Sell Like a CEO, Can: Entrepreneur Media, Inc., 2002 Pinheiro PS, Sherman RL, Trapido EJ, et al: Cancer incidence in first generation US Hispanics: Cubans, Mexicans, Puerto Ricans, and new Latinos. Cancer Epidemiol Biomarkers Prev 2009; 18:21629

34

Porter, M.E., (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors. The Free Press, New York. Porter, M.E., (2008). On Competition. Harvard Business Review Book Series, Harvard Business School Publishing, Boston, MA. Rosser, S. V. (2000). Controversies in breast cancer research. In A. S. Kasper, & S. J. Ferguson (Eds.), Breast cancer: Society shapes an epidemic. (pp. 245271). New York: St. Martins Press. Siddiqui, J., Kleiner, B.H., Human Resource Management in Healthcare. Health Manpower Manage. 1998; 24:143-147. Steingraber, S. (2000). The environmental link to breast cancer. In A. S. Kasper, & S. J. Ferguson (Eds.), Breast cancer: Society shapes an epidemic. (pp. 271302). New York: St. Martins Press. Studer, Q., Hardwiring Excellence, Gulf Breeze: Fire Starter, 2003. U.S. Census Bureau. 2010 Census Summary File 1, table Qt-P3: race and Hispanic or Latino origin. Available at: http://www.census.gov/. Wanchai, A. et al. (Aug., 2010) Complementary and Alternative Medicine. Use Among Women With Breast Cancer: A Systematic Review. Clinical Journal of Oncology Nursing. Vol 14:4. Retrieved from http://www.ons.org/Publications/CJON/Features/media/ons/docs/articlee45-e55.pdf Weisman, C. S. (2000). Breast cancer policymaking. In A. S. Kasper, & S. J. Ferguson (Eds.), Breast cancer: Society shapes an epidemic. (pp. 213244). New York: St. Martins Press.

35