How external environment can affect your practice

Look at competition, community, market trends

If you want to create a special program for your diabetic patients, it probably wouldn’t be a good idea to locate it across the street from a major diabetes center. On the other hand, if you have a pediatric practice and want to expand, a location near a master-planned community designed for families might be ideal.

Those are examples of how a review of your practice’s external environment can help you in the planning process. An external environment review takes a look at demographics, payers, employers, referral relationships, competitors, hospital, community information, and market trends, says Dick Hansen, a Palo Alto, CA-based health care consultant with the Medical Group Management Association.

Gather information on who your patients are and where they come from, suggests Michael Parshall, vice president of The Health Care Group, a consulting firm based in Plymouth Meeting, PA. He suggests creating your own database of patients and importing it into a map program to see exactly where your patients live.

If you are considering opening a branch office, locate it where most of your patients are. Keep up with population trends in your city. Contact your county planning commission to see what their population estimates are and what kind of developments are on the drawing boards.

For instance, if there’s a large retirement community being planned, it might be an ideal location for a gerontology or endocrinology practice.

Knowing who your patients are and what their needs are can help you come up with strategies for the future. If you know that your diabetic populations are growing each year, consider adding a nutritionist or a weight loss program. If your practice does a good job managing diabetic patients, your goal might be to increase the number of diabetic patients you treat. Your practice might decide to publicize your success with diabetics by sponsoring an educational event, such as a talk by a diabetes educator and invite the public and the news media.

Get a sense of what is going on in your marketplace. If your hospital consolidated with a bigger hospital, look at how is it going to affect you.

Check out the competition, too, suggests Diane Peterson, president of D. Peterson & Associations, a Houston consulting firm. Find out if other practices in your specialty are consolidating, or if they’re moving into your neighborhood. If your group was once the only doctors’ office in your area of specialty but now four other practices have moved in, you’ll want to come up with a strategy to keep your patients.

Find out what other practitioners are doing for their patients and referral sources. Keep up with federal, state, and local legislation and how it will affect your practice.

Also monitor the requirements from your managed care payers. The federal regulations and managed care mandates for electronic medical billing may mean that it’s time for you to revamp your information technology.

Here are some potential sources of data for your environmental assessment:

- U.S. Census population projections;

- local planning department or economic development office;

- local hospitals and health systems;

- local chamber of commerce;

- local, state, and national professional organizations.