Strategic Planning – A Real Key to Success
How does a medical practice respond to competition? How does a medical practice
respond to a decline in patient visits and decreased revenues? How can a practice grow?
Medical practices everywhere are struggling with these questions as they work to
position themselves for the future. In other words, if they are to grow and prosper,
medical practices need to think strategically and formulate a plan.
Where to Begin
Like all businesses, medical practices should develop an annual business plan. Along
with goals for growth, the business plan typically includes a financial projection or
budget with targeted goals for revenues and expenses. Typically, the annual plan focuses
on reviewing the current year and projecting operations into the next period. Strategic
planning includes the basic components of the annual plan, but also includes goals that
go well beyond the next fiscal period. Strategic planning goals are “futuristic.” The
strategic plan anticipates what the practice must do to adjust to new modalities and
breakthroughs in technology, meet the needs of the practice’s current and future
patients, respond to competition and enable growth.
Strategic planning begins with a work session involving physicians as well as top
managers. The planning session works best if held at an off-site, convenient location in a
facility that will provide for uninterrupted interaction by the stakeholders. An
independent, experienced and knowledgeable facilitator should be selected by the
practice to guide the process to ensure impartiality and inclusiveness. Prior to the
planning retreat, accumulate practice data. The data should include comparative
financial statements (compared to prior year, budget, and median for the specialty);
comparative analysis of charges; accounts receivable aging information; computation
and comparison of the gross collection percentage, net collection percentage, and
accounts receivable ratio; practice payer mix information; practice fee schedule; and
comparative analysis of charges by referral source for at least a two year period.
In addition, all physicians should identify issues that they want addressed. Before the
retreat, analyze the data and summarize results by compiling the answers to the
physician survey and highlighting areas of concern, such as equipment needs or low
Strategic Planning Session
An interactive planning session provides the time and structure for listening to,
discussing, and understanding each person’s views and perspective. Through open
discussion, consensus and commitment to a course of action and desired outcomes are
achieved. First, consensus should be established for commonly held values. For example,
a practice whose providers value time with their families may set a different course than
a practice that seeks revenue at any cost.
The next step is to identify where the practice is today. The practice must understand
and agree on the current status of the practice before considering strategies for future
direction. In this phase, the financial data gathered prior to the planning retreat is
introduced. The practice can use this data to identify strengths and weaknesses and to
identify areas that require immediate attention for improvement. Once the current
situation is summarized, the practice can develop its vision for the future. This last phase
of the planning retreat includes development of goals, objectives, strategies and action
It is time to answer the question, “How do we get there?” It’s important to do more than
simply outline long-term strategic goals. Specific plans and measurable tactics must be
established. In addition, these plans and tactics must be accompanied by reasonable
guidelines and timelines, and assigned to an appropriate individual who has the
resources and knowledge to complete them.
Implementation and Monitoring
Put the strategic plan in writing so there is a blueprint for implementation and
monitoring. It is important to include each of these elements:
• Introduction — mission statement
• Practice summary — current situation analysis
• Vision for the practice and practice goals
• Strategies and objectives
• Assignment of responsibility, and monitoring and evaluation techniques
Once the plan document is completed, it must be clearly communicated to all the
stakeholders. Everybody must understand their roles in accomplishing the strategic plan.
Monitored follow-up is critical to ensure that the practice moves forward. The practice
should review — at least quarterly — the progress toward accomplishing the action plan.
Additionally, a progress report should be provided at all physician meetings.
Strategic planning is a process that will assist a practice in identifying the forces that
drive change, analyzing the effects of those changes, and developing action plans for
navigating changes while moving toward goals. Strategic thinking — supported by
strategic planning and action — will help a practice be successful.
Reed Tinsley, CPA is a Houston-based CPA, Certified Valuation Analyst, and healthcare consultant. He
works closely with physicians, medical groups, and other healthcare entities with managed care
contracting issues, operational management, strategic planning, and growth strategies. His entire practice
is concentrated in the health care industry. Please visit www.rtacpa.com