Turning Around A Private Medical Practice

Michael S., an Orthopedist, decided to leave a large group practice to strike out on his own.

Determined to get off to a fast start he designed a snazzy, four-color, tri-fold brochure, took out an expensive yellow pages ad, participated in every insurance plan he could, and pressed the flesh with countless Primary Care physicians to generate referrals.

His strategy to fill his practice paid off. Soon his waiting room was full and his appointment book was overflowing.

But something’s wrong.

Now, 4½ years later, he finds himself cramming too many patients into too little time just to cover his overhead, inundated with paperwork, and having none of the autonomy and satisfaction he was looking for when he moved from “physician employee” to “owner.”

When you look at how Michael went about starting his practice, on the surface, it looks like he did everything right.

He leased space in a great location, promoted his practice extensively, developed good relationships with referral sources and took care of all of the billing and paperwork for his patients.

But the fact is, the results he got didn’t come anywhere near his expectations.

Now he is both overwhelmed and disillusioned. He wonders whether he has a future in private practice. And, like many physicians, he questions whether it’s even possible for a dedicated doctor to have a rewarding private practice in today’s economy.

Diagnosing the Practice

The real problem isn’t with the state of medicine today or with the economy. I can point to a number of orthopedists who own satisfying practices and have enviable lifestyles.

The problem isn’t even with the tactics Michael used to build his practice.

After all, they brought in the patients!

The problem is that Michael didn’t begin with the end in mind. He didn’t have a plan to guide his actions. So while he was able to build up a full, (practically overflowing) practice, relatively quickly, it was a very different practice than the one he envisioned. It offered him none of personal satisfaction, financial security or confidence in the future that he expected after 4 ½ years.

Before Michael can solve his practice’s problems, he needs an accurate diagnosis.

Symptoms: Too many patients. An overworked, underpaid, disillusioned doctor.

Etiology: Doing anything and everything that looks like it will bring in the patients and increase practice revenue.

Diagnosis: Lack of Strategy

Like most physicians who struggle, at this point Michael is so busy with day to day patient care that he doesn’t have time to step back and look at his practice objectively. If he did, he would see that the reason his practice looks like it does is because of the actions he took when he first opened his doors – and the actions he has continued taking ever since.

Michael, like so many other physicians, has no real business strategy for his practice. Sure, he has an income goal, but he has no clear vision of the practice he needs to create in order to achieve it.

And since he doesn’t have that clear vision, there is no path for him to follow. This means that he has no criteria for selecting the right practice-building options for him. So he ends up jumping on every opportunity that looks promising, from expensive practice management, software and billing services, to new practice marketing and promotion deals.

This floods his practice, but wreaks havoc on his cash flow.

While Michael has done a great job of filling his practice with patients, he has not achieved the autonomy, satisfaction and lifestyle that he expected.

Like so many physicians in his position, he believes that declining reimbursements and the “deterioration of medicine” as a profession are the cause of his dilemma. However, we were able to show Michael a number of highly profitable orthopedic practices around the country, whose physician owners had enviable lifestyles.

So, clearly, having a successful medical practice today is quite doable – if you follow a strategy.

Michael’s major problem comes from jumping right into practice without planning out his business strategy. As a result, his practice is running “by default.” He has a heterogeneous patient population that comes to him largely because he’s “in their plan.”

Once Michael became a client of BAC Medical Marketing, I advised him that he take the following few steps immediately, to begin to turn his practice around:

Treatment Plan

1.       The first thing Michael needs to do is recognize that he has the power to direct the future of his practice. He needs to change his perspective from “coping” with decreasing reimbursements and increasing paperwork, to deciding on the hours he wants to work, the types of patients he wants to see, and the specific procedures he wants to do.
 
If he wants a high volume practice, he can have that. But he needs to increase his staff, and develop better business systems so he can more efficiently care for a larger number of patients.
 
If he wants a lower volume practice he can have that too. But he needs a strategy for attracting those higher profit cases that will enable him to keep his practice small.

2.       Second, Michael needs to position his practice. Right now he’s a generalist. And while there’s nothing wrong with seeing all kinds of orthopedic cases, he gives patients no specific reason to choose his practice, other than his being “in their plan”. So Michael is stuck having to accept whatever insurance companies are willing to pay.
 
As Al Reis and Jack Trout pointed out many years ago in their monumental book, Positioning: The Battle for Your Mind, positioning is how you and your services are perceived by your prospective customers.
 
It goes without saying that being perceived as one of many “general” orthopedists will make Michael’s practice less valuable to his patients than if he is perceived as a specialist – for example, a specialist in arthroscopic surgery.

3.       Third, once he clearly identifies what he wants to deliver — let’s say arthroscopic surgery — Michael needs to evaluate the patient population he wants to attract. He needs to make sure that he’s promoting the benefits that this group of patients wants and needs. The way to do this is to develop an effective Patient Value Proposition. For example, Michael needs to promote his services in terms of the benefits his patients will get. “Athroscopic meniscal repair” doesn’t mean as much to a patient as “Be free of knee pain.” Instead of “minimally invasive endoscopic spinal surgery,” “get rid of your back pain today, and be walking again tomorrow” highlights the benefits of the minimally invasive procedure as well as the ultimate result the patient is after.*

4.       Finally Michael needs to make sure that every piece of literature that comes out of his office - every brochure, every ad, every letter or article reinforces his practice’s new “specialized” position in the mind of his current and prospective patients as well as his referral sources.

Once Michael has a practice-building strategy in place he can more effectively select the right tactics that will move him toward his goals.

Instead of taking a shotgun approach, he’ll be able to target the exact patients he wants with laser precision.

Plus with a clear strategy, he’ll be able to put systems in place that will allow him to deliver quality care, while still having a life.

* Needless to say, I'm not suggesting that you “guarantee” the results of any treatment or procedure. What I'm talking about here is making sure that your prospective patients can understand the value of your services - in their language.

Don’t assume that they have already researched specific procedures and treatment plans for their conditions. Don’t assume that they understand professional terminology. You can explain procedures and treatments in your informational materials, or when they present for their first appointment.