Putting your plan to work and then refining it

Part 3 of 3: To account for the unforeseen, the 4 C’s make strategic planning an adaptable, flexible process.

By Peter Wasserman, MD, MBA

The strategic planning process has moved on from COAST — commit, objectives, analysis, strategy and tactics — and the planning meeting, where we identified objectives and analyzed the practice along with our external environment. We defined strategies and came up with a list of possible tactics to advance these strategies.

Now is the time to tackle the 4 C’s: contingencies, continue planning, communicate and control. This is when you adapt your strategic plan to the real world, which is as important as the previous steps, if not more so. This article will look at how each of the four C’s can get you there.

C #1: CONTINGENCIES

Think a step ahead

Things do not always go as planned. By contingencies, I mean to think at least a step ahead of what might happen once the plan is put into action, including any unintended consequences. How you will respond?

We have already touched on competitive reactions — thinking like your competitors and how they will respond. In analyzing contingencies, you should think how you will respond to their reactions. If in response to your increased advertising, your competitors increase their media presence, are you going to maintain, cut back or increase your advertising budget? If you hire a retina specialist, what will you do if your competitors also hire one, or another subspecialist similar to what you already have in your group?

When plans go awry

Aside from competitive reactions, you should also consider what you will do if plans don’t work out as expected. What if your group decides to recruit a corneal specialist at a certain salary, but you do not find the right candidate? Do you increase the salary, look for recruiters or wait for the right candidate at your initial price?

If you decide to look for a larger space but all the available office space is too expensive, do you move anyway, stay in your present space, open up a satellite or build your own?

You probably won’t have all the answers, and there will probably be glitches and unexpected reactions. However, it is still important to think through as many of these possibilities as you can.

C #2: CONTINUE PLANNING

Crunching the numbers

So far, we have just discussed what occurs at the strategic planning meeting, as if planning is a one-time event. The initial meeting is important to set the tone and make the first set of decisions, but strategic planning continues. You may need to do further research, such as analyze demographics of a particular community or discuss advertising strategies with your marketing company.

You’ll also need to do financial analysis to ensure the viability of the projects you envision. Pro-forma statements (income/expense estimates) should show projected revenues and costs. Expenses may be easier to estimate than projected revenues.

Estimating big projects

If one of your strategies is to open a satellite office in an outlying town, analyzing expenses should be relatively straightforward. You should be able to estimate the costs, including space, supplies, equipment, marketing and personnel, and add them together to estimate expenses.

Estimating income may not be as easy. You should know the average revenue produced per patient in your practice, but projected utilization of the satellite is more difficult to estimate. Will the satellite be fully utilized, half-utilized or mostly empty in the first year? How long will it take to obtain full utilization, or even to just meet expenses? Will this new office be close to your present one, potentially siphoning patients from the existing office but not attracting many new ones?

This is where you need to make educated assumptions, which you should do with as much information as you can find. Look at demographics, such as numbers of potential patients and incomes in the community, and assess your competition in this new area. Even with all the information you can get, this exercise still gives you an estimate only; many pro-forma reports can fall short.

Tackling smaller endeavors

Financial projections of other projects, such as adding a new piece of diagnostic equipment, may be more straightforward. For this, you can determine what group of patients would benefit from the new equipment, the number of those patients within your practice, and how often they should be tested.

Multiplying the number of projected tests (by insurer) by the expected reimbursement (again, by insurer) should give you the expected revenues. Totaling the costs of the equipment, supplies and personnel required will give you the expenses.

C #3: COMMUNICATE

Delegate, set due dates, follow up

As I discussed in Part 2, it is imperative to clearly delegate tasks, with clear dates of completion, by the end of the strategic planning meeting.

Equally important: Those responsible for the particular tasks must complete their assignments on time and then promptly communicate that information to the partners.

Many physicians (myself included) are obsessive-compulsive, and we often assume that if we do not hear by the assigned date, the tasks have been forgotten. E-mail is an invaluable tool to keep partners in the loop and aware of what’s going on.

Keep staff in the feedback loop

Communicating to staff is also very important. Communication is not a one-way street. Staff may have valuable information to contribute about changes affecting their department, so ask them for their input when appropriate.

When explaining new ventures and actions, it is helpful if your objectives, strategies, and tactics align with the mission and values of the organization.

Timing is also important, because situations may arise when you cannot discuss new ventures in advance if the leaking of any information could compromise success.

C #4: CONTROL

Is the plan working?

You have now executed your tactics to achieve your strategy. Are you fulfilling your objectives? In other words, are you achieving the goals you desire? Are you achieving some goals but at the expense of other important aspects of the practice? Control is the process of analyzing the success of your plan.

Once your actions have had time to work, you can check your prior pro-forma by calculating real income and expenses. Are the estimates correct, and are they moving in the right direction? When appropriate, you can also check patient, referral source and staff satisfaction.

Give it time

Give time for your new strategies to take shape and bear fruit, but don’t hesitate to improve upon the programs while continually monitoring the effects of your actions.

However, on occasion you might have to pull the plug on some programs if they are not providing the desired benefits. If you give them sufficient time and attention, and if the goal is not integral to the practice, consider the pros and cons of shutting down vs. remediation of an initiative.

The COAST & 4C’s model provides a framework for strategic planning. Good planning takes time, but it makes the chance of obtaining your goals that much more possible. Just as you need a GPS to guide you to your destination, so it is that you need a strategic plan to get your practice on the right road to success. OM

About the Author
	Peter Wasserman, MD, MBA, is president of Concord Eye Care, PC, a multi-subspecialty ophthalmology practice in Concord, N.H. His e-mail is info@insight-healthcare.com. Disclosure: Dr. Wasserman is founder of Insight Healthcare Solutions, LLC, an ophthalmology consulting firm (www.insight-healthcare.com).