Medical Practice Planning: Be Prepared for the Future

Hospitals have had a formal strategic planning process for years. It doesn’t mean that planning ensures success but the failure to plan most likely would ensure failure. What does this have to do with physicians? Before we address that question, let me pose some others.

What would the impact be on your practice if all payers reimbursed you at Medicare rates? If the shift from volume to value takes place in your market, what will that do to your utilization? Is there technology available that could make your practice more efficient or reduce your operating costs? How do you compare against evidenced-based care standards? Do you have an exit strategy?

If you have answers to these questions, don’t waste time reading the rest of this post. If, perhaps, you don’t have answers I suggest a formal planning process would help, especially given these changing times. Not all markets will see the same shift in volume/value focus, so what is your best guess about yours? If you find ways to reduce the volume of care that your practice delivers and the financial carrot doesn’t shift, that isn’t a positive step.

First let’s address what planning isn’t:

• Planning isn’t a single physician, alone in her study, deciding what is ahead.

• Planning isn’t an event, it’s a process.

• Planning isn’t designed to reinforce your opinions.

• Planning isn’t easy.

• Planning isn’t always right.

If we are now clear on what planning isn’t how, then, should physicians approach the process so that they get the maximum benefit from their time investment? The answer will vary somewhat on your specialty and planning is typically a full course in MBA programs but there are key elements that, if followed, will offer some insights into how to prepare for the future.

Setting: Get away from the office or, at least, pick a time when the phones don’t ring and there are no other distractions. A number of clients have found that a conference room at a nearby hotel or the practice conference room on the weekend are good choices.

Resources: Include as many physicians as can be available. This includes both stockholders and new associates. Also consider adding key staff members such as your manager, marketing manager, and revenue cycle supervisor, anyone who has knowledge that can help.

Assignments: This is not a time to guess. Participants should be instructed to do some research before they attend the session. Data related to market population trends, the thoughts of your specialty society on the impact of healthcare reform, profiles of your reimbursement by payer, your current and recent financials, and the new clinical trends and developments within your specialty are all important to the process.

Facilitation: If you have never conducted a formal planning process before, find someone who has and invite them to lead the session. This could be your accountant or attorney, a practice management consultant, your banker, or other business leader. This will help you stay on task and will take personalities out of the process.

Time: Unless you have a very small practice, the planning process will take a half- or full day. Be sure everyone knows what to expect before they come and that they have committed to the time required. You don’t want colleagues leaving early because they have other plans.

Process: Start the session by describing (and agreeing) on the current state of the market, as it relates to your specialty. Have you seen declines or increases in patient volumes?  Has there been a shift in referral practices?  Have any actions by the local hospital had impact? What are the key payers doing? These are all important questions that should be answered before proceeding. Once the foundational data are in place then you do a "what if." What if reimbursement moves to Medicare levels?  What if the hospital recruits new physicians?  What if a key referral source retires?  What if clinical standards change? What is part of your reimbursement is tied to quality metrics, including patient satisfaction? Also explore what impact these changes might have on the role and type of support staff in your practice.

Opportunities: Describe action steps that will benefit the organization if your assumptions are correct. Should you seek to partner with the hospital in co-management or bundled payment programs? Should you approach payers with shared savings programs?  Should you link with other physicians in an IPA? Should you start the process to become a medical home? Or should you explore new technology that can have significant benefit to you or your patients?

The outcome of the planning process is a document that summarizes the best thoughts of the group about what steps are needed and when they should be taken to give the practice the best opportunity for success. This plan should be modified as you learn what assumptions you had are correct and which didn’t come to pass as you envisioned.

This is the process part of planning. Your strategic plan is a dynamic document. This also isn’t a one-time event. Schedule a session at least annually. Some do it quarterly. The worst you can do is never doing it.