Strategic Planning for Your Medical Practice

Great Lakes Orthopaedic Center, a 12-physician orthopedic practice in Traverse City, Mich., functions like a well-oiled machine today. But years ago, the then seven-physician practice struggled to stay on track. One of the biggest problems: dissension among the ranks, says practice administrator Steven Smith.

The practice had formed from a merger of two entities and shortly thereafter, it had added two physicians from solo practices to its team. "As you probably know, mergers can be a difficult thing culturally and in other ways," says Smith. "The management was having difficulty bringing this all together, melding the cultures and so forth."

Smith credits strategic planning sessions - meetings during which physicians and other leadership team members discuss challenges, opportunities, and goals, and reach shared decisions regarding things like adding new physicians and staff, implementing EHRs, and call schedules - with turning things around. Since the practice began strategic planning more than a decade ago, it has doubled in both size and revenue, says Smith. "Physicians are very independent; they're trained to be that way," he says. "Their practices, even within a group like ours, are different. We still have disagreements, but over time, we've put processes in place ... to get things out on the table, talk about them, and resolve them, and then, as an entire group or business, be able to move forward as one."

Strategic planning is a healthy exercise for any practice, but experts say there's no better time than now to get started. The more well-thought-out and united decisions your physicians make, the more likely it is your practice will thrive in this rapidly changing healthcare environment. Here's how your practice can begin the planning process.

Framing the plan

The term "strategic planning" suggests that the end result of this process is a clear, concise, organized document. But that's not always the final product - nor is it necessarily what you should strive for, says Kenneth Hekman, president of medical management consultant firm The Hekman Group, based in Holland, Mich. "Strategic planning is much more of an exercise, much more of a process, a discussion, than it is filling out outlines," says Hekman, who assists Great Lakes Orthopaedic Center with its planning. "If there is something written, it's more a documentation of the discussion that took place and the agreement that you made together."

That discussion, which Hekman recommends practices hold at least annually, should be framed around your practice's current challenges and opportunities, and those you will likely experience during the next three years to five years. Still, Hekman says, the majority of the discussion should be focused on making "concrete plans" and goals for the next year.

Prepping and planning

Before holding the discussion, identify who should be involved. At a minimum, your administrator, lead accounting person, and physician owners should participate, says Michael J. Reilly, a partner at Dannible & McKee, LLP, an independent accounting and management consulting services firm in Syracuse, N.Y. You may also want your physician non-owners to participate (as they may be the owners someday), and depending on your practice, the nonphysician providers.

Once you've identified the key players, gather information that will help facilitate the strategic planning discussion. Financial information, including budget, overhead rates, and accounts receivable performance, for instance, can give you a sense of how your practice is faring and where it needs to improve.

Also interview physicians before the strategic planning discussion to determine what strengths, challenges, opportunities, and threats they believe your practice has and is facing; and ask them more personal questions about their goals and their future plans, says Reilly.

Finally, conduct an analysis of your practice's external environment, he says. This should include an evaluation of any changes that could affect your practice such as what's happening with competing physician practices and nearby hospitals.

Retreating and brainstorming

Once you're armed with the necessary information, gather the troops for a "strategic planning retreat." Holding the retreat off-site during a weekend morning or evening will help minimize distractions and keep everyone focused, says Hekman.

During the retreat, discuss any big decisions that need to be made and key challenges or changes your practice is facing (or is likely to face), says Hekman. For instance, if your physician interviews revealed that two of your four physicians plan to retire in the next three years, how that will be handled should be a top discussion item. Or, if your external analysis indicated that a nearby hospital is asking practices to join an accountable care organization, discuss if that's something your practice is interested in. "It's kind of a guided brainstorming exercise, getting people enough information so that they can make intelligent decisions, wise decisions, and support it with data, support it with research, but then also make sure that there is an open free exchange of ideas within the group," says Hekman.

Strategic planning can also focus more generally on where you would like your practice to be in the future and how it will get there. One way to jump-start this discussion is through a SWOT (strengths, weaknesses, opportunities and threats) analysis. "I can't emphasize the importance of [the SWOT analysis] enough because in the end that's what really tells them the most about their practice - what they're really good at, what they're really bad at," says Stuart G. Kertzner, partner-in-charge of the healthcare group at Gettry Marcus, an accounting firm in New York. "Understanding, perhaps from outsiders and consultants, what opportunities they have, what's going on in general that they might not be aware of in terms of options with hospitals, options with mergers, what the threats are - they really, really have to understand that and be honest with themselves."

(To download a SWOT analysis template, and to see an example of a practice's completed SWOT analysis, visit bit.ly/sample-analysis.)

Assigning and acting

Before the retreat comes to a close, draft a plan of action, says Maureen Waddle, a partner and senior consultant for BSM Consulting Group, a practice management consulting firm in Incline Village, Nev. While this part of the process may sound intimidating, it doesn't need to be, she says. "I'm not talking about volumes and volumes of work, I'm talking about each year we have an action plan that is one or two pages and maybe has what we would call the three imperatives. These are the things that are most important to our organization to either remove an obstacle that's keeping us from getting to our vision, or to take advantage of an opportunity that's really going to help us achieve that vision." (A sample key imperatives document is available at bit.ly/key-imperatives.)

Make sure to link each imperative to specific action items, each action item to a deadline, and each action item to an individual in your practice who will be responsible for completing it. Also, ensure someone is responsible for a monthly review of the action plan, as well as following up to ensure each action item is completed by the deadline. "By setting a clear action plan, that's where the success of strategic planning truly comes into play," says Waddle. "It's where the rubber hits the road."

Ready to create a strategic plan for your practice? Ask your practice administrator or lead physician to visit bit.ly/planning-presentation. In this helpful video presentation, Lynn Spragens and Tom Gualtieri-Reed of healthcare consultancy Spragens & Associates walk viewers through the key strategic planning elements.

While a strategic planning meeting is a great way to outline your practice's goals and priorities in the year ahead, it's also a great opportunity to create a more formal strategic-planning document outlining your practice's mission, vision, competitive advantages, and more. To view a full list of the items that should be included, visit bit.ly/key-components.

Aubrey Westgate is an associate editor for Physicians Practice. She can be reached at aubrey.westgate@ubm.com.

This article originally appeared in the January 2014 issue of Physicians Practice.