| Course | HLTH 5613 Leading and Strategy Development in Healthcare Organizations |
|---|---|
| Module | Module 1 |
| Paper type | External environmental analysis |
| Length | 1,170 words, about 4 pages plus title and reference pages |
| Format | APA 7 student paper |
| School | American College of Education |
| Program | MHA |
| Updated | October 2026 |
Free sample paper for HLTH 5613 Module 1
Where the Joints Went: An External Environmental Analysis of Orthopedic Volume Leaving a Community Hospital's Service Area
Student Name
American College of Education
HLTH5613: Leading and Strategy Development in Healthcare Organizations
Module 1 Assignment
Instructor Name
March 6, 2028
The Paradox
Cedar Plains Regional Medical Center, a 180-bed nonprofit community hospital invented for this assignment, performed 612 hip and knee replacements five years ago and 488 last year, a decline of 20 percent. Over the same period, the number of joint replacements performed on residents of its primary service area, a county of about 210,000 people, rose by an estimated 16 percent. Demand grew and the hospital's share of it shrank. The strategy committee has asked for an external analysis before any response is proposed.
Ginter et al. (2018) describe environmental analysis as the process by which an organization identifies external issues, including demographic, economic, regulatory, technological and competitive trends, that may affect its future, and they stress that the scan should be focused on the issues most relevant to the organization's strategic choices. This analysis focuses on one service line and asks four questions in order: how much demand is there, who controls where it goes, what changed in the rules and who is capturing the volume. The inside of the hospital cannot explain a loss of share when demand is rising; the explanation is almost always outside.
Population and Demand
Demand for joint replacement is driven largely by age, obesity and osteoarthritis. Census estimates for the county show that residents aged 65 and older made up 16 percent of the population five years ago and 19 percent now, and state demographic projections place that share at 23 percent within ten years. Adult obesity in the county, as reported in public health survey data, is above the state average. Both trends point to rising demand for hip and knee replacement for at least the next decade.
The state's hospital discharge database and its outpatient surgery data together show where county residents actually had their procedures. Five years ago, Cedar Plains performed about 64 percent of joint replacements on county residents. Last year it performed 44 percent. The academic medical center 50 miles away increased its share from 21 to 27 percent, and a physician-owned ambulatory surgery center that opened in the county three years ago now performs about 17 percent. The remainder went to scattered facilities outside the region.
The Referral Network
Patients rarely choose a hospital for joint replacement independently; they follow their surgeon. Three orthopedic groups practice in the county. The largest, with seven surgeons, joined the academic medical center's physician network four years ago, and its surgeons now perform most of their inpatient cases at the academic center's campus. The second, with four surgeons, is the majority owner of the new ambulatory surgery center. The third, two surgeons, remains independent and performs nearly all of its cases at Cedar Plains.
Primary care referral patterns reinforce the shift. The two largest primary care groups in the county are employed by the academic center's network, and the network's electronic referral system directs orthopedic referrals to network surgeons by default. The volume did not leave Cedar Plains patient by patient; it left surgeon by surgeon, and the surgeons followed ownership and referral networks.
The Regulatory and Payment Change
A federal payment change accelerated the shift to ambulatory settings. The Centers for Medicare and Medicaid Services removed total knee replacement from the list of procedures that Medicare would pay for only as inpatient procedures, beginning in 2018, and later made the same change for total hip replacement and added both to the list of procedures payable in ambulatory surgery centers. The effect was rapid. Burnett et al. (2023) found that the share of Medicare knee replacement patients classified as outpatients rose from 1.8 percent in 2015 to 57.2 percent in 2020, although most outpatient-classified patients still stayed in the hospital more than 24 hours.
The change reduced hospital revenue per case. Haas et al. (2020) found that hospitals received, on average, 30 percent less from Medicare for outpatient knee replacements than for inpatient cases, about $3,682 less per case, while Medicare saved money on both hospital payments and post-acute care. For Cedar Plains, which still performs most of its joint replacements as hospital cases, the payment change reduced the margin on the cases it kept and made ambulatory surgery centers, with lower costs and physician ownership, a more attractive setting for surgeons.
Who Is Capturing the Volume
Two competitors are capturing the volume Cedar Plains has lost, and they are doing so for different reasons. The academic medical center captures complex and higher-risk patients and the patients of the surgeon group it employs; its advantages are its network, its brand and its referral system. The ambulatory surgery center captures healthier patients whose procedures can be done safely outside a hospital; its advantages are lower cost, convenience and the financial participation of its surgeon owners. Cedar Plains competes directly with neither on its main advantage.
Commercial insurers in the region have begun to steer patients toward lower-cost settings through benefit design and site-of-care policies for elective procedures, a trend that favors the ambulatory surgery center. The state has no certificate of need law restricting new surgery centers, so further entry is possible.
Technology and clinical practice have moved in the same direction. Rapid recovery pathways, regional nerve blocks and improved pain management now allow many healthy patients to go home the day of surgery or the next morning, which makes the setting less important to the patient than the surgeon and the convenience. Cedar Plains adopted a rapid recovery pathway two years ago, but its median length of stay for joint replacement remains above two days, longer than the surgery center's same-day model and longer than the academic center's reported figures. That gap is internal, but it matters to the external picture because surgeons and payers compare it directly.
What the Outside Picture Means
The environmental analysis points to three conclusions for the strategy committee. First, the lost volume is not a sign of weak demand; demand is growing and will keep growing. Second, the volume moved because surgeons moved, and surgeons moved because of ownership and employment relationships and a payment environment that rewards ambulatory settings. Third, Cedar Plains' current position, hospital-based joint replacement with independent surgeons, is being squeezed from both sides: complex cases by the academic center and simple cases by the surgery center. Any strategy that addresses only the hospital's internal quality or marketing will miss the forces that actually moved the volume. The next module examines the competitors and payer mix in more detail before options are developed.
Conclusion
Cedar Plains lost a fifth of its joint replacement volume in five years while its community's demand rose. The external analysis explains the paradox: an aging population is producing more demand, but the largest orthopedic group joined a competing network, another group opened its own surgery center, and a federal payment change made ambulatory settings more attractive for many patients. Seeing where the volume went, and why, is the foundation for choosing where the hospital should try to compete.
References
Burnett, R. A., Barrack, T. N., Terhune, E. B., Della Valle, C. J., Shah, R. P., & Courtney, P. M. (2023). Over half of all Medicare total knee arthroplasty patients are now classified as an outpatient: Three-year impact of the removal from the inpatient-only list. The Journal of Arthroplasty, 38(6), 992-997. https://doi.org/10.1016/j.arth.2022.12.029
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). Strategic management of health care organizations (8th ed.). Wiley.
Haas, D. A., Zhang, X., Davis, C. M., Iorio, R., & Barnes, C. L. (2020). The financial implications of the removal of total knee arthroplasty from the Medicare inpatient-only list. The Journal of Arthroplasty, 35(6), S33-S36. https://doi.org/10.1016/j.arth.2020.01.074
What the HLTH 5613 Module 1 instructions ask for
HLTH 5613 opens with the world outside the organization, and Module 1 often asks for an external environmental analysis of one service line or organization. Most prompts expect demographic and demand data, referral patterns, regulatory and payment changes, competitors and what the findings mean for strategy. Many sections name a framework, such as PEST or Ginter's general and health care environment, and ask for data sources to be named. Expect about five pages of body text, often with a table of market share over several years. The Canvas instructions state whether the organization must be your own and whether market data must come from state discharge files or may be composite. Pick one service line rather than the whole hospital, so the scan has a question to answer.
Inside the HLTH 5613 Module 1 example
The analysis opens with a paradox: the service area is aging and joint replacement demand is rising, yet the hospital's orthopedic cases have fallen for three years. It defines the external scan from a strategic management text and focuses it on the question of where the volume went. The population section reports age projections and expected demand. The referral section is the core, showing that two orthopedic groups changed affiliation and that surgeon ownership of a surgery center redirected cases. The regulatory section explains the removal of knee and hip replacement from the inpatient-only list and what research shows about the outpatient shift. The competitor section identifies who gained volume and how. The final section states what the picture means for the hospital's options.
Reading the HLTH 5613 Module 1 rubric
Environmental analyses in the MHA are graded on evidence and focus. Framework credit requires a recognized scan defined from a source and aimed at a clear question. The demand row rewards projections with sources and a link to the service line. The referral row usually carries the most weight, because it explains the data with specific changes in physician affiliation and ownership. Graders give credit for regulatory and payment changes explained accurately with research on their effect. Competitor marks go to who is gaining and why. Implications that set up the strategy modules, clear tables and APA 7 complete the grade. A market share table spanning several years usually makes the paradox convincing at a glance.
HLTH 5613 Module 1 help: mistakes that cost points
Environmental scans most often list trends in every category without answering a question. Another frequent weakness is ignoring physician referral patterns, which drive volume in procedural service lines. Students also describe a payment change without saying what it did to volume. Start with a puzzle in your data. Name the sources for every figure. Follow the surgeons. Explain the rule change and its effect. End with what the picture means for strategy, not a summary of trends. Keep market share figures consistent between table and text. If your service line is cardiology, obstetrics or behavioral health, the desk can draft an environmental analysis for it.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official American College of Education document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.
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HLTH 5613 Module 1 questions, answered
What data sources are useful for a healthcare environmental analysis?
Census and state demographic projections describe the population; state hospital discharge and outpatient surgery databases show where residents receive care; Medicare public data describe provider volumes; and payer policies and federal rules explain regulatory change. Name each source and the time period it covers.
Why include referral networks in an environmental analysis?
Because in many service lines patients follow their physicians, and physicians follow employment, ownership and referral relationships. A change in which network employs a surgeon group can move volume faster than any change in quality or marketing. Mapping those relationships often explains shifts that market-share data alone cannot.
Where can I find a free HLTH 5613 Module 1 sample paper?
No sign-up needed. The HLTH 5613 Module 1 external environmental analysis above covers "The Paradox", then "The Regulatory and Payment Change", then "What the Outside Picture Means".
Why did joint replacements move to outpatient settings?
Medicare removed total knee and then total hip replacement from its inpatient-only list in 2018 and 2020, allowing these procedures to be done as outpatient cases, including later in surgery centers.
What is the inpatient-only list?
It is Medicare's list of procedures it will pay for only when performed as inpatient hospital care. Removing a procedure from the list lets it be performed and billed in outpatient settings.