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Every medical practice is a small business, and being a successful
doctor is not just a question of having the requisite medical
skills or purchasing the newest medical equipment . You also
need to be an 'entrepreneur' and to learn basic business skills
in order to run a private practice successfully.
Many doctors adopt a self -oriented rather than a patient
-oriented approach to their activities. This means that they
decide what medical services to provide, and at what price
to sell them, without analysing what patients want and need.
They try to sell their skills, rather than try to provide
what sells. They blindly follow tradition rather than look
for market opportunities – and as a result , they are
more likely to fail.. They are going against the law of business,
which says that businesses exist in order to satisfy demand,
not to satisfy their owners.
Physicians often fall into two distinctly different profiles:
"healers" and "dealers." The healers prefer
to practice medicine free of management, financial and administrative
demands; they see business as a necessary but unappealing
part of health care delivery. The dealers, on the other hand,
are energized by the business of medicine; they apply their
entrepreneurial energy to building organizations that can
compete for business in a demanding market.
For many physicians, management is not a pleasant role. They
don't see management as being consistent with their altruistic
mission of helping patients. They are simply not motivated
to manage, since they don't derive any satisfaction from being
efficient administrators. However, doctors must learn that
they need to manage their clinic efficiently, if they hope
to achieve their final goal of providing good medical care
to their patients !
Remember that it’s not possible to provide
good care to your patients unless your employees
are happy. Instead of focusing solely on patients,
you also need to focus on the satisfaction and happiness
of your employees. Physicians can derive immense
satisfaction from knowing they have created an environment
in which their employees enjoy work – because
this is the sort of practise in which their patients
will be well looked after ! As more physicians get
the sense of satisfaction that can be derived from
caring leadership , they will no longer perceive
management as being at odds with patient care but
instead will recognize their unique position to
enrich the lives of their employees – and
through them their patients.
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The principal issue facing most medical practices is simple:
Will you succeed or perish? The business, regulation, technology,
and profession of medicine are quickly evolving. Your medical
practice needs an advantage, and you need to act upon the
advantage to assure your continued success. A well thought
out strategic business plan will provide that advantage. While
most doctors just muddle along, and grab opportunities as
and when they come, strategic business planning can help you
improve your chances of becoming successful. Use this basic
business tool to help improve your practice.
Typically, strategic planning is performed in five stages.
Stage 1: Analyze Your Practice and Its Environment
You need to evaluate several factors, including :
Patients: Where do your patients come from? What attracts
them to your practice?
What do they expect from you? Are you satisfying all their
needs, providing all the services you should ?
Referring physicians: Visit your top referrers personally,
and find what they like and, more importantly, dislike, about
your practice.
Services: Know which medical procedures you offer make money
and which lose money. Understand where your profitability
lies and try to maximize these.
Competition: Find out what competing doctors are doing for
their patients and referrers. Know which ones are forming
networks and what kinds of deals they are offering. Most importantly,
know each competitor's strategy and philosophy.
Regulation: Know what legislation has been recently enacted,
what is proposed, and how your practice may be affected by
it. Keep tabs on changes in practice patterns and standards
of care.
Stage 2: Analyze Your Strengths and Weaknesses
How is your practice different from anyone else’s ?
You should assess your practice in the following key areas:
patient friendliness; referrer convenience; "clinical"
quality (outcomes); technology (state of the art); price/cost
(economic advantage); and allies and barriers (competitors,
financing, networks, etc.). A candid analysis of these factors
will help you determine the strategy for your practice. You
may be a technology leader, or have an inherent price advantage.
Whatever your strength, go with it. If you have no strengths,
seek a way to obtain one. As for your weaknesses, instead
of ignoring them - do something about them.
Stage 3: Establish Goals
You must establish objective goals to monitor your success.
Establish practical goals in income, patient visits, referring
sources, and procedures performed. Your plan should include:
a prioritized timeline for adding specialists, equipment,
and administrative support staff; a continually updated (every
year) list identifying possible expansion sites; and multiple,
contingent funding options.
Stage 4 :Implement Your Plan
Your plan is absolutely worthless if you leave it in the computer
or in a desk drawer and expect it to implement itself. Most
strategic plans fail because they are ignored or forgotten.
Involve your staff in the planning, execution, and monitoring
phases.
Stage 5: Monitor and Adjust Your Plan
Don’t expect all your plans to become reality.
Just like complications can occur after surgery,
often through no fault of yours, you need to handle
business complications the same way – don’t
ignore them, but correct them and keep going without
altering your core strategy.
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If you are planning to offer a new service, you can use the
following formula to develop a business plan.
For (target customers - your main market segment only)
Who are dissatisfied with (the current market alternative)
Our product/service is a (new product category)
That provides (key problem-solving capability)
Unlike (the product alternative)
We have assembled (key whole product features for your specific
application/solution)
Here's an example of how it might work for an infertility
clinic, for example.
For infertile couples
Who are dissatisfied with running around from gynecologist
to sonographer
Our medical practice is a new personalized, integrated infertility
clinic
That provides couples with complete clinical services under
one roof
Unlike current gynecologic clinics
We have assembled a complete service including sonography,
specialists, lab tests and counseling
Sometimes it’s hard for a doctor to understand
business terms . Just like doctors use medical jargon,
administrators too use management jargon. This can
be easy to understand, if you remember that managing
a business is very similar to taking care of a patient
! The following “ translator “ can be
a useful guide.
| Management word |
Clinical synonym |
| Act |
Treat |
| Advise, recommend |
Consult |
| Audit |
Annual checkup |
| Bottom line |
Outcome |
| Delegates |
Refers |
| Difficulty |
Symptoms |
| Eliminate |
Cure |
| Gut feeling |
Hypothesis |
| Implement |
Manage |
| Pilot study |
Research |
| Organization chart |
Anatomical structure |
| Problem |
Malady |
| Reduce impact |
Reduce side effects |
| Strategic plan |
Service plan |
| Goal |
Outcome |
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Thus, if you read: ” The alternatives,
as a result of this audit, are to coordinate a
plan, delegate to our department managers or develop
a solution on my own. “, in your mind, you
can translate this as: “ The treatment options,
as a result of our annual checkup, are to integrate
a service care plan, refer to specialists, or
to treat the situation myself.”
If you encounter a business problem while running
your practise , think of it as a patient with
an illness and it will be much easier for you
to develop a treatment plan to solve it ! Thus,
if you are losing money, then this is the illness,
and your balance sheet is the equivalent of the
pulse and BP of the patient ! Just like you ask
your nurse to monitor the patient’s vital
signs to ensure he is getting better, you need
to ask your accountant to monitor your cash flows
to ensure your practise in improving. Think of
a bank loan as the equivalent of a blood transfusion
for your practise’s financial health; and
just like stopping smoking helps to improve your
patient’s vital capacity, getting rid of
surly and inefficient staff can help to boost
your practise’s profitability . One can
carry the analogy even further. If you have a
patient with a difficult problem and find that
you are stuck, what do you do ? Ask a specialist
for help, of course ! Similarly, you can use a
tax consultant to help you to reduce your tax
liabilities. As a doctor, you are used to managing
patients with complex medical problems. You can
apply this expertise to managing your practice’s
business problems as well !
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