How Much Do You Know About Running a Successful Practice? Between increased competition, more regulation, and dwindling reimbursements, there are many reasons why physicians need to approach their practice as a business and not consider financial and administrative concerns as an afterthought. What is strategic planning, and why is it critical for making your practice successful? Strategic planning can help a medical practice control and shape its future in the face of changing healthcare legislation, regulations, and patient populations in your area. Strategic planning has many components, including analysis of the market and creation of a plan that will develop sustainable, competitive advantages; implementation of the plan and creation of measurable results; and evaluation of the results and implementation of revisions, if necessary. Strategic planning should take place at the inception of the business. To stay relevant and competitive, however, established practices should update their strategic plan at least every 3 years, addressing any changes in the market, the economy, and the environment in which the practice operates. After you've had a year to measure and monitor your results, you can evaluate to see which elements worked, which could be tweaked, and whether you need to develop alternative plans. The critical thing to understand, however, is that for a practice to thrive and not just survive in the current healthcare environment, you need to be proactive. The first step any business should take is to develop the mission and vision statements that should be at the center of any business decision. If the mission and vision statements are kept in mind when issues arise, it is usually easier to identify the correct decisions. Both the mission and vision statements have a function in strategic planning. A mission statement explains the practice's reason for existence. The vision statement describes the practice as it would appear in a future successful state. To create a mission statement, spend time to come up with several ideas, thoughts, and impressions that resonate with what you would like the practice to become. Then take those key words and put them into a sentence that clearly defines what the practice does so that patients, employees, and others can easily understand what the practice is about. The objective is to be able to accurately convey your practice's philosophy. The vision statement is a future goal. It is a statement of what the practice sees itself being in the long term to the owners, employees, patients, and the community. A vision statement is brief and does not define the methods that will be used in obtaining that goal. An example of a vision statement that might be used by a clinical department of anatomy is, "We will strive for excellence in anatomy education." Business strategy programs use a very effective tool called a "situational analysis." This method identifies—from physicians, staff, patients, and others—what the practice's strengths, weaknesses, opportunities, and threats (SWOT) are. This can be accomplished in an interactive retreat with all of the key providers and staff, or it can be done with several group meetings that are combined by a steering committee to provide summarized, combined results. The group organizer should create a safe place for people to speak up so that all of the real issues get heard. For example, if the physicians are routinely arriving late so that appointments run behind all day, that should be listed as one of the weaknesses. Finally, during the SWOT analysis, take a long, hard look at every area of the practice. Examples of the areas to consider are: legal and tax structure; number of providers; use of technology; practice location and physical layout; increase or decrease in number of patients; employee turnover; office hours; number of patients seen per room; number of patients seen per hour; ancillary services offered; payer mix; and hospital affiliations. The group meetings that are created to do this work must include all of the physicians and other clinicians; the key administrative staff; and, where possible, patients and leaders of the community. These outside perspectives will uncover the blind spots that can't be seen by those within the practice. It is also a good idea to have a professional facilitator who is an expert in these types of conversations in the healthcare industry. Professionals can provide a much broader view that keeps the conversations from being lost in details, and they can add what they are seeing in the industry. When deciding which strategy suits your goals, the strategic planning group should determine the top 10 strategies with the most financial, competitive, or creative impact on the practice. Any other ideas created during this process can be considered during future strategy sessions, but most practices can effectively implement only a limited number of changes at a time. One method of evaluating the top 10 strategies is to measure the impact on the key drivers of success. The key drivers of success are specific to each practice, but common examples are: time to implement; cost/effort to implement; financial impact on the practice; and volume impact on the practice. A rating from 1 to 5 should be assigned to each strategy, in which 5 is the most positive and 1 is the least positive. Source
