How independent practices can compete with health systems

If you own an independent practice, it's more and more common that a hospital-based or health system-based competitor to you is nearby. On the surface these competitors can seem daunting. They are larger than just about any independent practice. With size appears to come strength in name recognition and marketing budgets. What's a smaller, independent practice to do?

As an independent practice, you have more going for you than it might seem. Size is not always a strength. In fact, in some important ways, the size of a hospital or health system is one of their greatest liabilities when competing against independent practices.

Let's look at a fictitious independent practice, Independent Pediatrics (IP), to see how this can work. IP has three full time pediatricians in one office. They've been open for a little over a decade. About three miles away is a health system-based community hospital that also houses a pediatrics practice, Suburban Children's Practice (SCP). SCP used to be another independent practice, but the owners sold to the health system about five years ago.

Start with what you already have

As a large health system, the owners of SCP need predictable, growing profits for their investors and to pay their large overheads. Building predictable profits in large organizations forces standardized processes and policies, and it usually results in siloed departments. Both constrain creativity when doing almost anything. SCP is forced to adopt all of the tools, systems and processes of the large health system.

The owners of IP originally worried how they'd compete. They didn't panic. Instead, they watched closely how SCP behaved in the local market compared to what IP knows families care about. IP noticed that they offer some differences that matter:

Same familiar staff. IP has built a friendly, family-first culture. One of the benefits has been a very stable staff. When a parent calls, they talk with the same people. The same nurses and pediatricians have worked together for years. That familiarity helps create a great patient experience. For SCP it's been different. Their leadership is driving more of a numbers-based results culture, which has motivated some SCP staff to quit. It hit the administrative, MA, and nursing staff the hardest.

Flexible scheduling. IP knows that some patients will need more than, say, 10 or 15 minutes to diagnose a condition, talk with the parents, calm the anxious child down, and deal with other unplanned situations that arise. The pediatricians review the upcoming schedule and tweak appointment times accordingly. Patients like the personal feel. When unexpected events happen that extend appointment times beyond planned, their other patients understand because they know they'll get the same attention. SCP doesn't have that flexibility. They're driving fixed time appointments, and there's talk of double booking in the near future.

Easy to work with. When a family calls IP, they get a person, not a phone tree. They have good parking, and their EMR's scheduling feature makes scheduling appointments easy. SCP no longer has its own direct phone number. Parents must call the hospital main number and go through a phone tree to reach SCP. While the hospital does have a parking lot, it's huge, and bringing your kid there on cold or snowy days is a pain.

Can get out in their community. IP knows that choosing a pediatrician is a very personal thing, so they get out into their community. As one example, every summer there's an outdoor fair. IP has had a booth since they opened. There's a modest fee to rent the booth. IP just pays it. SCP does not have its own budget. It would have to submit a request for approval. After spending a month to submit and getting denied a few times, they gave up.

Can promote themselves. IP's family first culture is something that families have complimented. IP has fun showing its personality publicly on social media, at events they host and attend, and wherever the opportunity arises. Additionally, they're good about keeping their online presence up to date and getting reviews from families. SCP pediatricians know these are all important, but since they don't have a budget, and since the hospital compliance team would need to approve any content before it's published, SCP stopped trying.

Look for gaps when expanding

When SCP first opened, one of IP's fears was how they could compete against a health system that offers so many services that any family might need for their child. IP worried that a "one stop shop" model would chip away at their patient volume.

When IP dug deeper, they realized that offering a lot of services is different than offering them in ways that create a good patient experience. Once IP realized this, they started to look for opportunities to expand their services.

One example is pediatric urgent care. SCP's health system offers urgent care, but there are no pediatricians on staff. SCP knows that treating children is different than treating adults. They lobbied to get pediatricians on staff in urgent care, but they were rejected.

IP already has daily time slots for sick visits, but after reviewing a few charts of their patients who were treated at the health system's urgent care, they decided to add their pediatric urgent care a few years ago. Their logic to parents is straightforward: we already know you, we already know your child's health history and temperament and we know how to how to take care of children. IP's urgent care has been very successful. Parents are more satisfied than they were before, IP no longer cleans up the mistakes made by other urgent cares, and IP now gets to bill for urgent care visits.

Compete on your strengths

Like a health system, IP would love predictable, growing profits. But the owners are smart businesspeople. They're profitable, and some years are more profitable than others. Most of all, they realize that compromising the experience for patients, their families, and their staff will ruin the practice. They've decided to take the long view one day at a time.

Carl White is the founder and CEO of MarketVisory Group, Inc., a Chicago-based health care marketing agency that works with independently owned medical practices nationally.