Opening a wound care center? Do your homework or go down in flames

Competitive analysis, stringent planning are prerequisites

Judging by today’s fast-growing interest in wound care and the concurrent spread of wound care centers owned by all manner of health care entities, you might think such an undertaking is a straightforward exercise: Find some space, assign or hire wound care specialists to operate the center, market the services, and wait for patients to show up.

But some health care organizations still seem to adopt a lackadaisical attitude when establishing wound care centers, and the mistakes show, say consultants who guide people through the process of taking wound clinics from conception to operation. To do it right, you have to, well, do it right.

Gerit Mulder, DPM, MS, president of Denver-based consulting service Wound Sciences Inc., often has seen medical organizations set up wound clinics in a tremendous rush while forgetting along the way to include key components such as detailed policies and procedures and a comprehensive marketing plan. Mistakes like this demonstrate that opening a wound care center of any size should be done methodically, thoughtfully, and thoroughly.

"I see some [wound clinics] open and close because few people bother to do the proper research," says Mulder, who has worked in wound care for 16 years and at one time managed a wound care clinic. "Others fail because they only consider part of the puzzle." Facilities that focus on potential profits instead of patient care will suffer from their shortsighted vision, he adds. "It’s easy to say, I’m going to open a wound clinic.’ To do it effectively is another story," he notes.

Process begins with mission statement

Mulder and others experienced in wound care consulting offer advice to organizations opening or considering opening a wound care clinic. Some of the steps may seem obvious, but Mulder says it’s surprising how many planners still pay little heed to them:

Develop a mission statement for the wound clinic. This advice comes from Jan Cuzzell, RN, MA, CNS, a consultant and vice president of THA services, a home care management company based in Savannah, GA. "The proposal needs to contain ideas and concepts that are consistent with your organization’s overall goals and values," Cuzzell says. The mission statement also forms a foundation upon which subsequent goals and objectives for patient outcomes and satisfaction can be based, which in turn dictate the direction of the facility’s policies and procedures.

Analyze the competitive environment. This includes an assessment of the demographic make-up of the planned wound clinic’s service area. As Cuzzell says, "Demographic information is used by every U.S. industry to identify markets for their products and services. Those in health care also depend on demographic projections to anticipate the distribution and composition of tomorrow’s patient population and identify the health services that will be needed."

Augment your research with a SWOT (strengths, weaknesses, opportunities and threats) analysis of the planned facility. This forces you to look both inward at your organization and outward into the market. Because the SWOT analysis is a common practice in the business world, plenty of published information about how to perform one is available, according to Cuzzell.

Ask fundamental questions that affect your clinic, and answer the questions as thoroughly as possible. These could include: Who else in the area offers wound care and of what scope? What specialized wound care needs are not being met in the community? What are the economic conditions in the community? Do people tend to carry health insurance, or are most dependent on Medicaid and Medicare? What services would make the clinic attractive to patients, payers, and referring physicians? If the clinic is not hospital-based, will it get enough referral business from other sources? Are there mechanisms in place that can be used to coordinate patient care between the hospital, wound clinic, home care, and other parts of the health care continuum?

The bottom line is to paint the most detailed picture you can of your internal strengths and weaknesses, the competitive environment, and the opportunities within the community you serve.

Take a team approach. No clinician should try to tackle this process alone, Cuzzell emphasizes. "Include all of the disciplines involved in wound care. Then you have the support and the buy-in of the people who really want to make the effort to produce good outcomes: physical therapy, nursing, vascular surgeons, dermatologists. The more buy-in you can get during the planning phases, the better chance you have of selling the idea to the administration," Cuzzell says.

Decide which management model you want to use. Will the clinic be run by a nurse or nurse practitioner, physician, physical therapist, podiatrist, or another specialist? All are suitable candidates. The academic degree and specialty are less important than knowledge and dedication, according to Mulder. "One of the biggest reasons for failures of large hospital-based clinics is they didn’t have the right people directing it; they based the choice on degree rather than expertise," he says.

Decide which specific services the clinic will offer. Typical services might include debridement, diagnostic services, surgical procedures, physical therapy, podiatry, hyperbaric oxygen, electrical stimulation, lymphedema, and orthotics. The choice will be based on such factors as the demographics of your service area and which specialists will be available to provide services.

Based on the services to be offered, determine procedural costs and payment sources. Sources of payment include Medicare, Medicaid, self-payment, and a wide range of managed care programs.

Consolidate all the information you’ve gathered into a detailed business plan. This provides the blueprint for building the clinic. The contents of any business plan will vary depending on an organization’s needs, but all business plans share some similarities. One is that they elucidate goals and measurable objectives that must be met in order for the clinic to fulfill its mission. Cuzzell advocates the inclusion of a time line in which target dates are set for the completion of various development phases. Avoid an open-ended project with no target date for completion.

Estimate costs and revenues

Though difficult to predict accurately, give your best estimate of costs, revenues, and the number of patients you expect to serve. Both direct expenses (e.g., rent, maintenance, utilities) and operational expenses (e.g., salaries, benefits, management consultation fees) must be considered.

Experts emphasize that all of the planning steps are interrelated, meaning planners should expect to adjust and redirect their efforts as the process moves forward.

There are bound to be obstacles at every turn. For instance, Cuzzell cautions that turf wars are likely to occur during the development of a hospital-based wound clinic because the process involves crossing operational territory lines, which often elicits defensive and protective reactions from staff who are used to running their own show.

"One reason health care has so much difficulty with managed care is that it sometimes means giving up control over territory," she says. "To manage patients across a continuum of one area of care to another with efficiency and good outcomes, some people must be willing to give up some control over their areas and work with a multidisciplinary focus." Not only does the wound clinic planner need sound business judgment or guidance; he or she needs to be something of a diplomat as well.

Focus on care, not profits. Cuzzell warns that the formation of a wound care clinic does not guarantee large revenue streams. Wound care is time- and labor-intensive, and the financial success of a center depends on numerous factors, such as the mix of payers between managed care, government, and fee for service; the patient population; the availability of the appropriate clinicians; and the ability to contain costs while maintaining high-quality care.

Mulder adds that a well-run wound clinic can definitely be a money maker, but too often he has encountered administrators who are preoccupied with making quick profits. Almost inevitably, he says, they neglect the most important factor: giving patients the best care possible. Do that, and the money will follow, Mulder assures. "You have to give the best care because patients have to be happy or they won’t return. The referring physicians have to be happy, and the insurance companies have to be happy with outcomes. If you only focus on the money, the clinic will ultimately fail."

"Certainly, if you have a lot of managed care contracts, you could potentially generate a lot of revenue," Cuzzell explains. "But the true value of a wound clinic, particularly if it’s hospital-based, is the [maintenance] of the continuum of care: getting the patient out of the hospital more quickly, preventing readmissions, and reducing admissions from skilled nursing facilities. A properly operated wound clinic can essentially case-manage those patients."