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While medical practices vary widely in complexity and income, the successful ones all share one common trait: they plan ahead and look to the past for guidance.
As the CEO of your medical business, regardless of your actual title, it’s important to treat your practice with the forethought that any other business requires to survive in challenging economic times. I deal with successful doctors and practices of every type, from large corporate ones with big infrastructure and dedicated business management teams to busy small practices where the physician-owner is the lead doctor and the president.
While these practices vary widely in complexity and income, the successful ones all share one common trait: they plan ahead and look to the past for guidance. The end of the year is closing fast, now is the perfect time to review your business successes and failures over the last year.
Taxes typically dominate the discussion nearly every doctor has with their advisors at this time of year. My previous articles on some of the simple tax tips available and the inevitable amount of tax time fraud targeting doctors provide a look at two ends of that spectrum but that’s hardly the only issue to consider. Below is a simple starting-point outline of topics for a self-review that you and your “team” can perform, whether that means a board of directors or your spouse and a single key employee.
Is our business model working? Is what you are doing sustainable, even if it means tightening your belt, or are you living on borrowed money (and hence borrowed time) or depleting savings? The time to act on these issues is now and may require immediate changes to your personal and business overhead and work habits. Now is not the time to resist the changes in your “three-day-a-week lifestyle practice” if you were ever fortunate to have such a thing and heading a problem off is easier, cheaper, and less stressful than waiting until your back is against the wall.
Some key issues here are:
What care/services are most and least profitable?
Are you increasing the percentage of that profitable business and your capacity to provide it?
Are you meeting any changes in patient demands and demographic changes or is someone else doing that for your patients?
Are there opportunities you are not maximizing like closures of competing practices or changes in healthcare itself?
Can you reduce the cost of any core expenses?
What worked and what didn’t this year? I’m regularly surprised by people who continue to do things that aren’t producing the results they want and pay for year after year because it’s become a habit. No calls from the super-coupon guide? Try a community paper. CPA just handed you a bill for what you owe Uncle Sam but none of the new ideas he promised? Fire him. Action that has proven to be ineffective and that you repeat equals inaction. What do you have to lose if it’s not working anyway?
Do we need to reduce staff or replace anyone that’s not performing? This is a sensitive issue at any time of year but especially so at the holidays. I cannot state this strongly enough based on the number of employment related lawsuits we see in medical practices: Keeping people on who create liability with other staff or patients threatens the livelihood of your family and everyone else you employ, not to mention the care of the patients that rely on you. If you have to do it, learn to fire and discipline the right way. Do it sooner rather than later including updating employee policies that aren’t working and need to be changed for the New Year. This is also a great time to evaluate the compensation of key employees that support your efforts and practice so that you are able to pay them appropriately and remain an attractive employer.
What didn’t get done? We all have long lists of “someday” projects including some essential business planning issues that help squeeze more time and money from our efforts; too few of those items are written down and made a real priority. Create an action list of the things that you read or heard about that you wanted to implement in your practice and then edit it down to 12 items or less, one per month. Identify which of those issues can be delegated and do it, but set specific parameters and time frames and enforce them; 12 months from now you’ll be 50 pounds lighter with the weight of those “loose ends” off your shoulders.
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