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A well-structured strategic business planning process can help your practice in both the short and the long term
The business of medicine becomes more challenging each day. Throughout the country, physicians are experiencing organizational changes in the delivery system, reimbursement for demonstrated value rather than quantity of care, enhanced technology, and an ever-changing regulatory environment. Strategic business planning is more important than ever. Here’s our advice on why it’s important and how to do it successfully.
Why bother with strategic business planning?
Imagine building a house without a blueprint or taking a family vacation without a destination. Your practice is no different. Without a formal process to identify your mission, values, goals, projects, timing, barriers, opportunities, and strategies, you are likely to miss good opportunities and make serious and expensive mistakes.
What are the potential benefits of strategic business planning?
A well-structured strategic business planning process can help your practice in both the short and the long term. Let’s start with immediate value. First, strategic business planning provides clear direction, preventing the haphazard occurrence of activities that may actually work against each other. Second, the process offers an opportunity for practice owners, managers, and other workforce members to collaborate in setting the future direction of the practice. Participation in planning enhances the likelihood of successful implementation of agreed upon projects and priorities. Third, it allows the practice to set priorities. Everything can’t be done simultaneously, so consensus on a logical order makes more sense than launching multiple initiatives simultaneously. Fourth, strategic business planning offers the potential for enhanced financial performance. Fifth, clarity of focus can improve the quality of patient care.
In addition to all these short-term benefits, strategic business planning has great long-term value. After it’s done, a practice can use it as the benchmark against which to measure progress in achieving agreed upon goals. New opportunities for program expansion and operational improvement can also be vetted against the plan for consistency.
NEXT PAGE: How does the strategic business planning process work?
The strategic business planning process is straightforward, regardless of whether you are a medical practice or a corner store. Start with an honest assessment of all aspects of your current practice by asking these types of questions of all owners, senior managers, and other workforce members:
Who should be involved in a strategic business planning process?
We recommend both strong internal involvement and external facilitation by an experienced professional. Internally, greater involvement by owners, senior managers, and other workforce members bodes well for reaching consensus. External facilitation has many advantages over internal facilitation. In any practice there are likely to be differences of opinion, and someone outside the organization with no personal stakes in the outcome can best guide the discussion. An experienced external facilitator can also bring to the table lessons learned from other similar engagements.
What are typical steps in a strategic business planning engagement facilitated by an external consultant?
Assuming your practice has decided to engage an external consultant, begin by clarifying the scope of the consulting engagement. What will you do, what will the consultant do, and what will you do together? Next, collaborate with the consultant to develop a standard list of questions that can be asked of key individuals in face-to-face or telephone interviews. Make a list of important data that needs to be gathered. Following the interviews and information gathering, have the consultant aggregate the responses to the questions, maintaining confidentiality so no opinion is attributed to a specific individual. Schedule an off-site strategic planning retreat (either one half day or an entire day). Following the retreat, have the consultant summarize the results for the practice both in writing and in a face-to-face meeting. Agree to move ahead, making sure to delegate responsibilities to specific individuals and setting reasonable timelines.
What’s the cost of strategic business planning?
The cost for externally facilitated strategic business planning depends on the size of the practice and the number of people who will participate in the process. For example, we spent many more hours working with an eight-physician cardiology practice considering acquisition by a healthcare system than we did with a four-person internal medicine practice wrestling with ways in which to improve access to patient care. The more important question about cost is what’s the cost of not engaging in strategic business planning? It might be far more than what you would pay to have it done!
NEXT PAGE: An example of a strategic plan
We help medical practices start new practices or assess the feasibility of introducing a new program or process into an existing practice. The strategic business planning process is the same in both situations, with the exception of the fact that with start-ups, we’re generally dealing with an individual, not a team of clinical and administrative people.
We strongly advise starting a vision, not with numbers. After you know what you want to do and how you want to do it, add dollar amounts. If the financials look unreasonable, revisit your vision, adjust the numbers, and reiterate the process until you are satisfied with the result.
If we were helping a physician create a strategic business plan for a new practice, we would ask the following questions or request specific information. Everyone’s outcome is different. Some physicians look at the strategic business plan and move ahead. Physicians that need a bank loan take the plan to various lenders. Other physicians decide that the plan and supporting financials are not sustainable.