Five potential development trajectories for your practice
We recently went jet skiing for the first time. Jet skis, if you’ve never tried them, are a thrilling way to enjoy the water. You can cruise along quietly and enjoy the scenery or you can let ‘er rip, hitting freeway speeds. But for all of the exhilaration, the faster you go, the less stable you are and the bigger the potential wipe-out — especially if there are waves or wakes from other boats.
Everyone has their own tempo and comfort, and this was visible out on the bay. Twenty-something guys in board shorts would take their boats to full throttle and zoom off looking for a wave to jump. More sedate riders were comfortable pottering along enjoying the bird life on a sunny day. Between these extremes were all manner of intermediate riders. The slow cruisers, the acrobatic donut racers and the occasional rider falling off because they turned too fast or weren’t paying attention.
The same can be said about practice development and the obvious balance one has to strike between the thrills of a “go-man-go” practice and adopting a more leisurely growth pace.
Here are five potential development trajectories for an ophthalmology practice, couched in jet-skiing terms. Your practice probably fits into one of these today, and you may be thinking about revving up or down to a more exciting or sedate pace.
1. Just idling along
This practice has no significant growth or development effort to speak of. It is sleepy, seeing the same number of patients and surgeries each year like a jet ski bobbing around in everyone else’s wake. There is virtually no effort at referral development, outside of a perfunctory patient follow-up letter to referring doctors.
In most regions across the country, if you don’t have at least a 5% annual growth (the pace at which demand for eye care is now growing with a rising geriatric population), market share is actually being lost ... which may be just fine from your perspective. If you are nearing the end of your career and plan to shutter the practice at retirement, idling along could feel comfortable and be a perfectly acceptable option. But, if your succession plan is to sell to a nearby practice or private equity company or the practice will continue in a younger partner’s hands, it may be time to shift into a higher gear.
2. A slow cruise
This practice has a 5% annual growth rate and is cruising along, just about keeping even with demand growth and holding onto market share with minor effort. Practice owners drifting along with the market like this are often not tracking their annual growth rate and are not even aware of the relative senescence of their company. Perhaps many years ago they and their partners were great at practice promotion and networking and keeping up with referral sources. But the office got “busy enough, successful enough.”
Many established private practices, perhaps a slight majority today, fall into this category. You feel comfortable with how you do things, and the practice offers a sufficiency of financial reward. Increasing your patient volume (with a more tightly packed patient schedule, more stressful days or longer work hours) is no longer worth the trade-off of less personal time, even if the price is lower profits as costs continue to rise.
3. Let’s make this more exciting
This practice has an 8% annual growth rate. It probably has at least a rudimentary written business plan that defines goals for the next 5 to 10 years. Modest but specific marketing efforts are in place. Building an aligned management team and honing their skills is now a priority. Also, communication throughout the organization is more formal, including written operations manuals for each department and regularly scheduled meetings.
4. Wahoo!
This practice has a 12+% annual growth rate. Now things are getting a bit exhilarating. This practice continues to build on all aspects of the “Let’s make this more exciting” practice above, but the difference between an annual growth of 8% vs 12% is noticeable.
With a 12% growth practice, you have to start driving more carefully and paying more attention. For example, processes or policies you had in place that worked so well last year now need revision. Policy conflicts can appear with little notice, causing staff and provider frustration and the need for prompt realignment. Like driving a speeding jet ski, lots of little course corrections work better than jerking the handlebars left or right.
5. Skirting the edge of a wipe-out
This practice has an annual growth rate of 20% or higher. This practice has leapt ahead of the pack, and the owners and manager may feel justifiably proud and exhilarated. But practices (or jet skis) running at maximum speed are susceptible to overheating, burnout and crash landings.
Great speed is not sustainable without great caution, vigilance and attention to detail. Even with great care, the fastest-growing practices typically have higher staff turnover, lower profit margins, more frequent customer service complaints and incipient provider burnout. Smart practices (like careful jet skiers, perhaps) will pulse high growth with periods of slower growth, allowing everyone on the team to catch up.
WHICH PRACTICE DO YOU WANT TO BE?
In the current post-pandemic environment, as practices are just getting back to something approaching normal, it’s a good time to reflect on where your enterprise and career are heading and how fast you want to get there — then to make active choices about both.OM
