Preparing for the Future
As this year winds down, and next year begins to wind up, medical practices should give some thought towards how the next twelve to thirty-six months will look for the practice. The industry faces rising expenses, declining revenues, and regulatory uncertainty. All of these factors contribute to the urgent need to think proactively, taking concrete steps to stay ahead of the curve, rather than merely reacting. Hoping for the best is not the solution. What is needed is a focused strategy session by management.
This needs to be an ordered organized process: the key is to put together a structured conversation around strategy, goals, and execution. All key members of management who can directly contribute to the results should participate.
This conversation needs to contemplate:
- Strategy
As you assess strategy for the coming months, is the company on task to achieve goals set earlier? Does strategy need to be adjusted to reflect changes in the marketplace (ACO’s, mandated EMR implementations, demographic shifts, etc.)? Is there a shift in pricing, or in costs, and if so, what strategic movement by the practice should be contemplated to address identified issues and maintain or improve profitability?
- Goals
If management is satisfied that overall direction of the business strategy is sound, the next questions to be asked are around goals: What level of billings, patient encounters, or profitability is desired in 12 months? 24 months? 36 months? Do the goals carry implications for hiring, training, physical infrastructure, inventory or other key issues? If needed, are there sufficient financial resources, whether capital or operating cash flow, to support physical infrastructure requirements?
- Execution
Once management has determined the goals for the company, and has identified potential headcount, infrastructure, and other requirements that will need to be put in place in order to achieve the goals, it’s time for the final -and possibly most important - piece of the puzzle: execution. To help facilitate execution set extremely specific interim goals at least by quarter, and by item (hiring, training, marketing, etc); less frequent follow up risks losing a sense of urgency. Assign specific accountabilities with a crystal-clear timeline: who will address each item, and by when? And set follow up meetings where the individuals tasked with these items will report to the group on progress and success in meeting the goals set by management.
This conversation should be held in a location where interruptions are minimized. This might require that meeting be held offsite; the outcome of the proceedings are important enough that management can remain out of reach for a few hours absent critical emergencies. If possible, cellphones should be turned off. It might be helpful to have an outside facilitator manage the conversation and keep it on track; often that can bring forth a more balanced conversation that isn’t dominated by an internal moderator.
A major additional benefit to this exercise is the improvement in communication between the participants as they spend time working on the future together. Finally, by creating the opportunity to set strategy, goals and execution plans as a group, management can continue to drive the practice to the next level of success.
Addressing key strategic issues does not require bringing in a high-powered MBA on a full-time basis - strategic resources to facilitate and support a practice through such an exercise are well within reach of most medical practices.
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