HCS 498 Week 3 SWOT Analysis Example

Better Outcomes, Fewer Doors In: A SWOT Analysis of a Nonprofit Rehabilitation Hospital Facing Plan Denials, a For-Profit Neighbor and a Therapist Shortage

[Student Name]

University of Phoenix

HCS/498: Strategic Decision Making for Health Care Managers

Week 3 Assignment

[Instructor Name]

[Date]

The rehabilitation hospital and its internal figures are composites written for a model paper; national data and research come from the sources listed.

The planning committee of the rehabilitation hospital had two weeks of material: a new mission centered on patients returning home and a scan of external developments headed by Medicare Advantage denials. This section turns that material into a SWOT analysis. The committee set two rules. Every item must be supported by a figure from the hospital's own records or a cited external source, and no quadrant may hold more than four items, so that the analysis points to choices rather than cataloging everything.

Strength One: Patients Return Home

The hospital's risk-adjusted rate of discharge to the community is 69.5%, above the national median of 67.2% reported by the Medicare Payment Advisory Commission (2025). This is the outcome the new mission names, and it is published where referring case managers can see it.

Strength Two: Specialized Programs

The hospital runs the region's only dedicated brain injury unit, with 12 beds, neuropsychology and a family education program. Its stroke program follows national rehabilitation guidelines, which recommend inpatient rehabilitation over skilled nursing care for stroke survivors who qualify (Winstein et al., 2016), and stroke accounts for 31% of admissions.

Strength Three: Relationships and Mission

As a nonprofit with a 40-year history, the hospital has long relationships with four acute care hospitals, three of which place their residents on rotation there. Its board includes two physicians from those partners.

Strength Four: Experienced Staff

Median tenure among nurses is nine years, and eight therapists hold specialty certifications in neurologic or orthopedic practice.

Weakness One: Therapist Vacancies

Fourteen percent of physical and occupational therapist positions are vacant. Contract therapists fill the gap at about 1.6 times the cost of employed staff, and patients sometimes receive therapy from therapists they have not met before.

Weakness Two: Margin

The hospital's Medicare margin is 9.2%, below the 14.8% national figure for 2023, and its total margin is 2.1%, leaving little cushion for investment or a payment cut.

Weakness Three: Slow Authorization Process

The admissions team submits Medicare Advantage authorization requests by fax and phone, taking a median of 26 hours from referral to submission. Referring hospitals facing pressure to discharge send patients to facilities that respond faster.

Weakness Four: An Aging Building

Therapy gyms are small and there is no simulated apartment or car for practicing daily activities, which families notice on tours.

Opportunity One: Federal Limits on Plan Decisions

Rules published in 2023 require Medicare Advantage plans to follow traditional Medicare coverage criteria for services such as inpatient rehabilitation, and rules published in 2024 require standard prior authorization decisions within seven days and urgent decisions within 72 hours from 2026. Combined with findings from the Office of Inspector General (2022) that some denials of post-acute stays met coverage rules, these changes give the hospital grounds to appeal and to press plans for faster decisions.

Opportunity Two: Home Transition Services

Referring hospitals and plans are judged on readmissions and total cost. A program in which therapists visit patients' homes before and after discharge would extend the hospital's community discharge strength into a service plans and partners value.

Opportunity Three: Rural Competitors' Losses

Two rural rehabilitation units are losing their rural payment adjustment over three years, which may lead them to reduce beds and refer complex patients elsewhere.

Opportunity Four: Partnership

One of the four acute care partners has no rehabilitation affiliation and has asked whether a formal partnership is possible.

Threat One: Plan Denials and Payer Shift

Medicare Advantage admissions rose from 18% to 24% of the total in three years, and 14% of those referrals were denied last year. Every percentage point of payer mix that moves to plans with high denial rates takes patients away from a hospital that is otherwise performing well.

Threat Two: Payment Pressure

The advisory commission recommended a 7% cut to the Medicare base rate for 2026. It was not adopted, but a similar recommendation in future years could be.

Threat Three: Competitor Joint Ventures

A for-profit chain opened a 50-bed hospital nearby in 2024 and another company has announced a joint venture with a regional acute care system, giving it a referral stream the hospital does not have.

Threat Four: Labor Competition

Competitors offer sign-on bonuses to the same small pool of experienced therapists, which could deepen the vacancy weakness.

What the Committee Left Out

Several items were proposed and rejected under the evidence rule. Board members suggested "strong reputation" as a strength, but the hospital had no survey of referral sources or patients to support it, so the committee commissioned one instead. "Changing regulations" was proposed as a threat and rejected as too vague; the specific rules were already listed as opportunities or threats. "Technology" was dropped from opportunities because the committee could not name a specific device or service that would change admissions or outcomes within the plan's five years. Leaving out unsupported items kept the analysis honest and each quadrant short enough to act on.

Pairing the Quadrants

The committee paired quadrants to generate options. Using strengths to seize opportunities: build the home transition program on the community discharge strength and offer it to the unaffiliated acute partner as the basis of a formal partnership. Fixing weaknesses to seize opportunities: move authorization requests to electronic submission and appeal denials that met coverage criteria under the new rules. Using strengths to counter threats: market the brain injury and stroke results directly to case managers and plans. Reducing weaknesses to avoid threats: a therapist recruitment and retention plan, including a residency program with local universities.

Options Carried Forward

Two options go forward to the goals section as the plan's core: first, faster authorization and appeals, since denials are the most immediate threat to volume, and second, the home transition program with a partnership offer, since it builds on the hospital's strongest outcome and answers the joint venture threat. Therapist recruitment will be treated as an enabling goal, because neither core option works without therapy staff.

Conclusion

The SWOT shows a hospital with better-than-average outcomes and a clear clinical identity but too few ways in: patients are lost to plan denials, slow authorizations and competitors with hospital partners. The strategic answer is not to change what the hospital does well but to widen the doors, through faster authorization, a home transition service and a formal partnership, while rebuilding the therapy workforce that makes all of it possible.

References

Medicare Payment Advisory Commission. (2025). Inpatient rehabilitation facility services. In Report to the Congress: Medicare payment policy (pp. 247-263). https://www.medpac.gov/wp-content/uploads/2025/03/Mar25_Ch8_MedPAC_Report_To_Congress_SEC.pdf

Office of Inspector General. (2022). Some Medicare Advantage organization denials of prior authorization requests raise concerns about beneficiary access to medically necessary care (OEI-09-18-00260). U.S. Department of Health and Human Services. https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf

Winstein, C. J., Stein, J., Arena, R., Bates, B., Cherney, L. R., Cramer, S. C., Deruyter, F., Eng, J. J., Fisher, B., Harvey, R. L., Lang, C. E., MacKay-Lyons, M., Ottenbacher, K. J., Pugh, S., Reeves, M. J., Richards, L. G., Stiers, W., & Zorowitz, R. D. (2016). Guidelines for adult stroke rehabilitation and recovery: A guideline for healthcare professionals from the American Heart Association/American Stroke Association. Stroke, 47(6), e98-e169. https://doi.org/10.1161/STR.0000000000000098