Like it or not, given our weakened economy, medical practices no longer have the option of relying on self-referrals to guarantee that patients (and payers) will continue to line up at their doors.
Like it or not, given our weakened economy, medical practices no longer have the option of relying on self-referrals to guarantee that patients (and payers) will continue to line up at their doors. Those days are long gone. Today’s medical practice must be proactive, understand the market(s) in which it operates, and plan for the future if it is to thrive, let alone survive. Conducting a competitive market analysis is a critical first step toward the financial success of any medical practice.
An investment of time. Given the importance of understanding your market, a competitive market analysis should not be done between patients or on the fly. It takes preparation. It takes time and thought. It is, in my opinion, imperative; with the end result reflecting the amount of time and effort devoted to the exercise.
The tools and tasks. Practices often use the PEST (Political, Economic, Social, Technological) and/or SWOT (Strengths, Weaknesses, Opportunities, Threats) analyses to understand their market base. PEST analyses provide a framework of macro-level factors of import (e.g., Medicare cuts) that may influence key strategies; SWOT analyses help identify/prioritize internal/external factors that bear directly on the organization and its objectives.
To conduct these types of analyses, I recommend the following steps:
Having collected this valuable information, protect it! Share it with key stakeholders, but only under an assurance of confidentiality. This information is valuable to you but perhaps priceless to your competitors. Schedule a half-day retreat for your team to evaluate the findings and set a strategic course for the future of your practice.
Action and inaction both carry risks. Chart your course using hard data. Knowing your practices’ strengths, weaknesses, and competition - and acting on this knowledge - is a great way to improve your market position, and ultimately the financial success of your practice.
Lucien Roberts, III, MHA, FACMPE, is executive director of Neuropsychological Services of Virginia. He also consults with medical groups and health systems in areas such as compliance, physician compensation, negotiation, strategic planning, and billing/collections. He may be reached at email@example.com.