Strategic planning well worth the time invested

Managed care complexities make planning essential

By Reed Tinsley, CPA

President, O’Neal, McGuiness & Tinsley, PLLC


Declining revenues, increasing competition, and proliferation of merger activity throughout the physician practice field is enough to make anyone feel they are faced with an uncertain future.

Practices can no longer afford a "business as usual" attitude. They need to decide how they intend to position themselves in the future in order to maintain their net income, grow their practice, manage cultural and operational transitions when mergers occur, and compete with others for patients and managed care contracts. In other words, medical practices need a strategic game plan.

Is planning for the future important to you?

So where do you start? The first step in this process is to meet to discuss how the practice intends to address the future, and whether or not a strategic planning meeting might be in order. Decide if planning for the future is important, and whether this process might get all of the doctors reading from the same page.

Try to set a specific date for the strategic planning meeting. All physicians and administrative personnel should attend. So as not to take away from patient care time, this meeting usually is held on a Saturday. Also, consider hiring a facilitator, such as the practice’s accountant or an independent consultant.

Before the meeting, gather input from everyone in the practice who will be attending about those issues they really want brought up and discussed. This usually is given to the facilitator, who then will use this information to develop the meeting agenda. (See a sample outline that can be used at the meeting, below.)

I. Discussion of desired meeting outcomes

A. Common understanding of where the practice is today

B. Everyone needs a cooperative view of "soft spots" and opportunities for improvement

C. Everyone must develop a consensus of where the practice wants to be in the future

D. Everyone must agree to design an action plan and implement it

II. Practice overview

A. Financial

B. Billing and collection benchmarks

C. Overhead

D. Accounts receivable

E. Financial history

F. Provider income levels

G. Personnel

H. Other

III. Participant observations about the practice

A. Positive points

B. Negative points

IV. Overview of local health care service area

A. Managed care plans, penetration and growth

B. Amount of capitation growth

C. Consolidation activities

D. Identify competitors

V. Review of key objectives and critical success factors

A. What makes practices unique

B. What makes practices successful

C. What is the doctors’ shared vision

D. Review key undertakings of past year

VI. Top issues now facing the practice

A. How practice tends to address each issue

B. A detailed discussion follows, including any obstacles that must be overcome to effectively address the issue

VII. Issue 1 _____________________

A. How practice tends to address the issue

B. Obstacles to overcome to ensure success

VIII. Issue 2 _____________________

A. How practice tends to address the issue

B. Obstacles to overcome to ensure success

IX. Issue 3 _____________________

A. How practice tends to address the issue

B. Obstacles to overcome to ensure success

X. Issue 4 _____________________

A. How practice tends to address the issue

B. Obstacles to overcome to ensure success

XI. Issue 5 _____________________

A. How practice tends to address the issue

B. Obstacles to overcome to ensure success

XII. Goals for next period

A. Strategic undertakings for the practice

B. Financial goals for the practice

C. Other key efforts for the practice

XIII. Summary

A. Summarize key successes/challenges

B. Reiterate key goals

C. Create action plan committee

D. Set next meeting to review implementation status

E. Thank you to all attendees

The next step after the meeting is to draft a strategic planning document. This document details and expounds upon most of the items included in the planning checklist above. Arguably, the most important portion of this document is the action plan. The action plan makes sure each task is started and accomplished on a timely basis.

Unfortunately, this is where the planning process usually breaks down. A meeting goes well, everyone is fired up, and then nothing seems to happen. The action plan keeps everyone focused and on track. It should be the practice manager’s or practice CPA’s job to monitor the implementation process and make sure every task in the action plan is getting done. It is imperative that the status of the action plan’s implementation is a regular agenda item at the physician meetings, and that progress is continual.