Go Southwest for Advice

October 23, 2008

Other industries can teach us a lot about managing our own businesses.

Other industries can teach us a lot about managing our own businesses. Take Southwest Airlines, for example. Its founding premise of low cost, flexibility, and reliability has guided every decision made by the leadership at Southwest, and with good results. To illustrate, here’s a comparison between Southwest Airlines and other major carriers:

What’s more, in 2005 Southwest enjoyed a 23 percent cost advantage over American Airlines, then the largest carrier.

Now let’s apply the Southwest philosophies to a medical practice:

  • What are you doing in terms of patient “transportation,” from the front desk to the exam room and back to check out? How many stops are made and how efficient are those stops in terms of steps taken and time utilized during the process? Can you, say, consolidate vital signs and phlebotomy into a single area, and remove processes that fail to contribute to the patient experience?

  • Are you working to optimum capacity? Or are there empty seats or unused space in the office that could be used to provide better care for your patients?

  • What is your scheduling model? Does it maximize your fixed costs associated with space?

  • Are you achieving or surpassing your benchmarks? For example, how many employees are involved in each patient visit, per FTE provider, or some other relevant measure for benchmarking? Benchmarks don’t just mean what others in the industry are doing. They can also be in-house acid tests to mark how you are doing this year compared to last year. I am not big on benchmarking if it is used to achieve a level equal to others; your personal benchmark should be the starting point at which you challenge yourself to improve by a specific percentage.

  • How about your costs? Have they increased over the past year, two years, or every year for the last 10? Have you calculated your cost-per-patient-visit and compared that to your total costs? If you look at cost per visit, perhaps this has actually decreased when measured against the number of patient visits per provider, over a given period of time.

The lessons are simple: Know your mission, focus on it, and stay consistent. Use your mission statement as the basis for every decision you make in your practice. Keep track of your costs of providing care to your patients; and be aware of others’ benchmarks as well as your own year to year.

Owen Dahl, FACHE, CHBC, is a nationally recognized medical practice management consultant with over 24 years of experience in consulting for and managing medical practices and author of Think Business! Medical Practice Quality, Efficiency, Profits. He can be reached at odahl@comcast.net or 281 367 3364.