Twenty years ago, reimbursement changes and the introduction of managed care and capitated plans fostered fear and uncertainty among orthopaedic surgeons. However, once they were able to get past their fears of the unknown, many made decisions that had a significant impact on their future success. Orthopaedic surgeons became smarter and began to view their practices as professional services firms that provided clinical services instead of as medical clinics. Several practices hired professional business managers and offered ancillary services to help grow their business.
In the process, practices reevaluated their businesses and made changes that were within their control. They became more focused, responded with value they could provide at a reasonable margin, and leveraged their strengths.
Today, concerns about changes to Medicare reductions, increased government involvement, and aggressive health systems looking to control the delivery systems are creating similar fears and uncertainties. Smaller practices may join healthcare systems, while larger practices consider affiliations with accountable care organizations.
But just as before, the professional service firm philosophy is playing a larger role in medical practices. Practices are continuing to mature and leverage their strengths to be more competitive, thus protecting their revenue streams and independence.
During this year’s Practice Management Symposium for Orthopaedic Surgeons, presented during the 2014 AAOS Annual Meeting in New Orleans, attendees learned about the “Growth Prescription,” a way to continual improvement and progress for growth-oriented orthopaedic practices following a professional services firm philosophy.
The following steps in the Growth Prescription outline proven marketing management principles. Taking these steps will help practices decide where to put their time, money, and resources so they will generate more value and additional resources for critical initiatives or partner distributions.
Baseline measurement is essential. Almost every important clinical decision an orthopaedic surgeon makes has an element of research. But when it comes to marketing or promoting the orthopaedic practice, data and research are almost always ignored or overruled by subjectivity and opinion. Yet, successful growth depends on using data and research to drive these decisions.
Among the data sources available to orthopaedic practices are the front office system, patient surveys, and direct referral discussions. Fundamentally, baseline information should include the status of the practice in the eyes of patients and referral sources as well as their views on competitors.
Less than 10 percent of practices nationally have a shared vision when it comes to marketing communications. Often, some partners believe too much is being spent, while others believe too little is getting done.
The value of obtaining solid data on the needs and wants of patients and referral sources (measurement) is that objective information increases the likelihood of understanding and agreement among partners. Then, the practice can commit to a clear direction and pace. More facts and fewer opinions can result in a shared vision among partners.
Focused communication plan
Once the practice has reached a shared vision of objectives based on research from each of its primary market segments (current patients, prospective patients, primary care, workers’ compensation, sports community.), it can establish a focused plan to allocate resources appropriately. Partners can review the plan and clearly understand how and why the resources are going to be allocated and their expected impact.
Measuring data, developing a shared vision, and establishing a focused communication plan are of little value if the plan cannot be executed in a timely manner. Marketing communications need to be managed and overseen daily. In addition, communicating news about the execution is important. Partner status reports and semi-annual overviews are important elements to reinforce the trending metrics, the objectives, and the overall plan.
This brings the Growth Prescription full circle. Not only does a reassessment hold the current plan accountable, it provides a springboard of insight and knowledge on what is and is not producing value. Where are results being generated and, equally important, where are they not? The value of each reassessment is to advance the practice toward producing more value with often fewer resources, especially as a percent of practice receipts.
Practices that follow the Growth Prescription generally see the following results:
- They are more aligned with the needs of the market, seeking out and executing approaches that better align with the needs of prospective patients and other referral sources.
- They are not just busy; they are strategically busy—busy enough to support the next 3-year objectives of recruiting, payer negotiations, and health system discussions. Patient volume and market preference are among the assets a practice has that influence its independence.
- They are leveraging their strengths rather than minimizing their weaknesses.
- They make plans. Practices that routinely plan have at-length discussions on the pressing issues, gain more of a shared vision, and are better able to make important decisions.
- They execute the plans they make. The ability to make a decision and execute a plan is the most important managerial asset professional service firms have.
By choosing to position their practices as professional services firms and continuing to mature and leverage their practice’s strengths to be more competitive, orthopaedic surgeons position themselves to ride this and other healthcare waves successfully.
Orthopaedic practices are doing well, but most would agree that their success is based on decisions made 2 years ago. So the question for orthopaedic surgeons today is, “What are you doing now to be stronger 2 years from today?”
Bill Champion is president of Venel, a marketing communications firm focused exclusively on orthopaedic providers. Tony Edwards is senior vice president of Venel. They can be reached at Bill@Venel.com and Tony@Venel.com