For hospitals and health systems, strategic planning is a critical business activity, with significant time and substantial resources devoted to such efforts. Unfortunately, the same cannot be said for most physician practices, where little or no time or resources are dedicated to strategic planning. Many physicians and practice leaders feel that they are either too busy or ill equipped to engage in any meaningful planning. In fact, many practices report that their strategic planning is done on a more informal “intuitive basis.”
But, with heavy competition for market share, referrals, and physician talent, practices are becoming aware of just how necessary strategic planning can be. Corazon believes that recognizing the inherent benefits of planning on more formal basis is a critical first step in the right direction; moving forward with a dedicated planning process with market share retention AND growth in mind is the logical next move.
While such an effort is not easy, the good news for physician practices is that comprehensive strategic planning can be accomplished without a cost-prohibitive, time-consuming effort. Especially if using expert outside consulting assistance, a “master strategic and business plan” can be developed in a matter of weeks. Despite the size, specialty, and scope of a practice, a full strategic planning process should, at minimum, address:
- Industry trending
- Local / regional / national performance benchmarks
- Growth opportunities
- High-level strategic activities
- Business functions required to support the strategic plan
- Potential recruitment needs relative to practice growth or expansion
- Contracting opportunities
- Return on investment potential
Corazon’s essential components of a practice-based strategic plan are outlined below:
First, an internal assessment looks at the current capabilities of the practice in the context of the external marketplace to provide an objective overview of the scope and distribution of services, provided the experience and qualifications of the staff, clinical outcomes, and financial performance. A SWOT analysis technique, an objective assessment of the strengths, weaknesses, opportunities, and threats, then creates the basis for strategy formation, tactical design, and future planning.
Next, an external assessment evaluates the marketplace factors that impact the practice, currently and in the future. Generally, the practice defines a service area based on expected patient origins using zip codes. Corazon advises that the practice use a consistent service area for all relevant demographic and utilization estimates within the strategic plan.
A competitor profile should be included here as well. For example, a SWOT analysis of practice competitors…Who refers to them and why? How are competitors’ products and services differentiated? How effective has the competitor been in creating consumer and payor awareness? What is their overall image in the community? What are the key quality and/or financial indicators for each competitor? Gathering and understanding this information can be invaluable when considering strategic initiatives and future plans for a competitive edge.
Finally, an estimate for growth potential results from an in-depth look at the last three years of historical performance versus current market share and population trending by disease state, and then current and five-year projections by age group, gender, etc. Interestingly, many practices using this approach have quickly identified significant lost market opportunity and consequently, new markets for targeted growth.
In addition to the above, Corazon believes a strategic plan should also address industry and technology trends within the practice setting, along with the critical success factors for the introduction of new technology and/or services, the required investments, and the potential return on investment.
Having gathered and assimilated a great deal of internal and external information through the previous activities, a practice would then be ready to begin the implementation of the strategic plan, outlining activities for targeting opportunities for quality, growth, and financial viability. Corazon recommends clear timelines and assigned accountabilities in order to assure the job is done and done right!
Through a sound, well-designed strategic planning process, physicians will be able to better understand their current state of affairs and future challenges. In this same regard, the practice itself will now have a clearly-articulated strategic and tactical plan that will only serve to assure success in both the short- and long-term.
Bruce is a Vice President at Corazon, Inc., a national leader in strategic program development for the heart, vascular, neuro, and ortho specialties, offering a full spectrum of consulting, recruitment, interim management, and physician practice & alignment services. To learn more, visit www.corazoninc.com. To reach Bruce, email firstname.lastname@example.org.