Many physician practices lack a strategic plan, which means that they may not be enjoying the benefits of employees working towards common aims, a framework in which to make decisions, and a roadmap to reach the goals they establish. Other practices may have a strategic plan, but it may not be up to date. With huge leaps in healthcare technology, acquisition of physician groups by hospitals, healthcare reform, and other major changes in the environment, it may be beneficial for practices with a plan to revisit it this year.
In her recent article in Physicians Practice, Aubrey Westgate provides the example of an orthopedic practice which grew from seven to twelve physicians. The merging of different physician cultures resulted in a lack of unity of purpose, which was later remedied to a great extent by a formalized strategic planning process. Much of the benefit was derived from the process itself, rather than the final document created. Just getting the planning session on the calendar is a step in the right direction, as too many practices wait until major changes create urgency.
A contract CFO or consultant serves as a valuable resource to practices which are ready to benefit from a better planning process. The primary role of the CFO consultant is to facilitate meetings, but they may also use financial and other metrics to assess the present state of the practice and assist with an environmental analysis. Environmental analysis, in addition to evaluating competitive concerns such as the opening of a new practice or surgery center nearby, may look at regulatory changes affecting practice operations and revenue, how the local economy may be impacting large numbers of workers, and any other considerations potentially affecting the business. The orthopedic practice described in Smith’s article increased substantially in both volume and revenue after the commencement of the formal planning process. Some of the issues addressed in their sessions included call schedules, staffing decisions, and EHR implementation. Other subjects which would normally be addressed during strategic planning meetings include new site selection, major technological changes, participation in an accountable care organization, or the addition of new services or providers.
The contract CFO compiles information from the planning sessions into a polished document which captures the decisions and priorities of the group. The CFO consultant can assist with periodic updates as the regulatory and competitive environments change. Westgate quotes Kenneth Hekman from the Hekman Group, who maintains that the strategic plan needs to be revisited at least annually. Hekman also suggests that practice leaders concentrate on a three to five year horizon as they identify opportunities and challenges ahead.
The assistance and value provided by a CFO consulting does not necessarily stop when the plan is complete. Contract CFOs can help translate high level goals into clear, measurable steps with a time frame. Some of these next steps in pursuing the opportunities identified during planning sessions may require market research, financial modeling and analysis, or other actions where a contract CFO’s skills can be beneficial. Don’t wait until the practice falls behind competitors or ends up adrift in the wake of major industry shifts- get your practice’s planning session on the calendar today.
CFO Business Growth Solutions, LLC is a provider of part time CFO and interim CFO Services, nationwide accounting & bookkeeping Services, debt restructuring and management turnaround, business intelligence applications and due diligence support services. For more information go to http://www.cfobgs.com/
Torrieri, M. (2013). How to Create a Strategic Plan to Improve Your Medical Practice. Physician Practice. http://www.physicianspractice.com/mgma13/how-create-strategic-plan-improve-your-medical-practice
Westgate, A. (2014). Strategic Planning for Your Medical Practice. Physicians Practice. http://www.physicianspractice.com/managers-administrators/strategic-planning-for-your-medical-practice.