A strategic plan is your practice’s road map to a successful operation
Long-term goals help maximize returns
Instead of complaining about changes in health care and how it affects your practice, it’s time to step back and figure out how to do things differently so your practice can prosper in difficult times. This is where designing a strategic plan can help.
Strategic planning gives you a chance to:
• review past challenges and accomplishments;
• set goals for the future;
• re-examine the practice’s mission, values, and expectations;
• consider pressing issues outside the office environment.
"A physician practice is a business, and any business needs planning to determine how best to spend time and expertise to maximize returns," says Diane Peterson, president of D. Peterson & Associates, a Houston- based health care consulting firm. Physician practice strategic planning may have been an oxymoron in the past, but that has to change if today’s practices are going to succeed, she says.
In the past, physicians could count on dealing with the same patients, increasing fees slightly, and being sure of the making the same income year after year, explains Michael Parshall, vice president of The Health Care Group, a Plymouth Meeting, PA-based consulting company. No more. Now physician practices are faced with declining reimbursement, increased competition, consolidation of medicine, and blurring of the turf. When he talks to physicians about strategic planning, he is fond of quoting a colleague who asserts: "If you don’t know where you’re going, any road will take you there.
"Every successful business has a strategic plan. If it wants to do better, it has to figure out how it’s going to happen," he adds.
Planning is more important than ever in a health care environment where the rules and the needs of your patients are constantly changing. Planning will allow you to step back and look at your environment and figure out how to respond, Peterson adds.
If you’re a practicing physician, you have a limited amount of time and you need to decide how to best apply it to maximize a return — not just a financial return but a return in the feeling of satisfaction that results from doing what you want to do.
"A physician or physician group is a business. All the physician has to sell is his or her time and expertise. Any business needs to determine how to best spend time and expertise to maximize the return," Peterson says.
With a strategic plan, you set important goals with a timetable attached and deal with big issues, those you don’t deal with on a day-to-day basis. "Physicians are often so concerned with taking care of patients that their big goals are pushed aside and never put in writing. Unless you sit down and do strategic planning, you will mosey along, never getting to those important and big questions," Peterson says. Strategic planning forces physicians and other members of their practice to look at the big issues, rather than the immediate priorities, she adds. "It’s better to deal with things well in advance than to be making rash decisions."
Dick Hansen, a Palo Alto, CA-based health care consultant with the Medical Group Management Association, facilitates 20 to 25 strategic planning retreats for physicians each year. He’s worked with practices that range in size from three physicians to more than 500. Medical groups should do strategic planning to have some control over their future and to clarify the practices’ approaches, he says. "Unless all the members of the group are basically on the same page, the group won’t be able to move forward quickly."
He gives the example of a physician practice that made all of its decisions by consensus of its members. The group made a unanimous decision in a meeting one afternoon, but by the next day, one physician had changed his mind and the process had to be repeated.
"Medicine is a business, and large practices can’t conduct all decision making by consensus," Hansen says. The problem could be eliminated by including ways to streamline the decision-making process in the strategic plan. For instance, the group could specify which decisions would be made by consensus and which could be made by majority vote, he adds. Strategic planning sets out your goals in a clear, understandable manner and lets everyone in the practice knows what is expected of them.
Planning also enhances communication between people in the practice. "When you share information and involve people, productivity tends to go right up. People feel they are truly invested in the practice," Peterson says.
Hansen tells of practice that hired two new physicians who refused to go to the satellite office they had been hired to staff. "The group never made it clear that the site was where they were expected to go," he says. A strategic plan could have eliminated the problem.
You don’t have to have a strategic plan, but it makes it easier to operate if you have one, Hansen says. Having a plan is essential when there is a new leader in the group, a new president or administrator. For instance, a new administrator who has 10 different physicians telling him or her 10 different things to do may never accomplish anything. But with a strategic plan, the administrator will clearly understand the goals of the practice, he adds.
Having a plan that sets out reasonable goals will give everyone in the practice a sense of accomplishment, Hansen says. "It’s harder and harder to be a physician these days because of all the outside pressures. If you have a strategic plan with measurable goals, you get a feeling you are accomplishing something," he adds.