Why Strategic Planning is a Must for Medical Practices

By Nick Hernandez, MBA, FACHE | Published 2/18/2017 0

strategy game closeup 2048 x 1365

Photo by Ryan Thomas Ang on Unsplash

Strategic planning is not the same as operational planning. The former is focused on broad and long-lasting issues that ensure the medical practice’s long-term effectiveness and survival. The latter focuses on achieving objectives and carrying out short-term activities.

Strategic planning functions as the “design” just as a blueprint functions as the “how” to build something. Strategic plans are expressions of a physician owner’s dreams and visions of successful results. These plans must not be rigid because, as they meet detours and obstacles, they must be adjusted as the plan is implemented.

The strategic plan, to be of long-term value, must be treated as an ongoing business process. It must evolve and change to reflect changing market and industry conditions. While you cannot predict the future, the absence of strategic planning usually leads to operating nightmares. Consequently, conducting proper strategic planning can reduce those “days you’d rather forget.” Medical practices that plan strategies are unquestionably more successful than those that do not.

Is a strategic plan the same thing as a business plan?

So, a strategic plan is essentially a business plan, right? NO. A strategic plan itself consists mostly of words whereas a business plan is comprised of many figures and numbers. Strategic planning is a process that brings to life the mission and vision of the medical practice.

As the practice grows and the healthcare environment becomes more complex, the need for strategic planning becomes greater. A strategic plan, well crafted and of value, considers the internal and external environment around the business and is ultimately communicated to all staff members.

Everyone in the practice should understand the direction and mission of the organization. After all, the purpose of strategic planning is to set overall aims for your practice and to craft a plan to hit them. Furthermore, consensus can also enhance morale and motivation. This agreement, understanding, and alignment enable the achievement of improved practice performance in all aspects (clinical, business, financial, etc.).

Medical practices which consistently apply a disciplined approach to strategic planning are better prepared to evolve as the local market changes and as the healthcare industry undergoes reform. The benefit of the discipline that develops from the process of strategic planning, leads to improved communication. It facilitates effective decision-making, better selection of tactical options, and leads to a higher probability of achieving the physician owners’ goals and objectives. An important distinction in the process is to recognize the difference between strategic planning (the work being done) and strategic thinking (the creative, intuitive input).

The strategic planning process

Although there is no one formula for strategic planning, there are required steps that optimize the value. The strategic planning process must mirror the cultural values and goals of the medical practice; the process is very different for solo and small group practices than it is for large medical groups or hospitals.

Strategic planning can be a challenging process, particularly the first time it is undertaken in a medical practice. With patience and perseverance, as well as a strong team effort, the strategic plan can be the beginning of improved and predictable results for the business. At times when the practice gets off track, a strategic plan can help direct the recovery process. When strategic planning is treated as an ongoing process, it becomes a competitive advantage and an offensive assurance of improved day to day execution of the business practices.

Strategic planning can provide an overall strategic direction to the providers and managers of the practice and gives a specific direction to areas like financial strategy, marketing strategy, clinical development strategy and recruiting/retention strategy, to achieve success.

Use of a consultant can help in the process and in the development of a strategic plan. Be leery, however, of consultants who seem to think that strategic planning means planning the whole organization and so they produce vast schedules showing what is going to happen to every tiny corner of the practice for years ahead in meticulous detail. In some ways, strategic planning is a structured form of brainstorming.

As an outsider, the consultant can provide objectivity and serve as the “devil’s advocate,” as well as a sounding board. In the end, however, the plan must have the authorship and ownership of the physicians and managers who must execute and follow the strategic plan. It must be their plan.

The bottom line

Strategic planning, when treated as a work in progress, rather than as a binder on a shelf, or a file on a computer, provides a medical practice with a real and lasting competitive advantage. A living strategic planning process will help direct the business to where you desire it to be. Strategic planning is your medical practice’s roadmap to your vision and to achieving a competitive advantage.

You can find all of Nick Hernandez’ articles on TDWI here.


Nick Hernandez, MBA, FACHE

Website: http://www.abisallc.com/

Nick Hernandez, MBA, FACHE is the CEO and founder of ABISA, a consultancy specializing in strategic healthcare initiatives.

Since founding ABISA in 2007, his emphasis has been on developing and maintaining a strong relationship with physicians and identifying areas for business opportunity and support. The company’s client list includes physician groups, hospital systems, healthcare IT organizations, venture capitalists, private equity firms, and hedge fund managers.

Nick is a graduate of the United States Naval Academy and a former Captain in the U.S. Marine Corps. He holds MBA degrees in both Operations Management and Information Technology & E-Business Management from Wake Forest University. He is Board Certified in Healthcare Management and has been named a Fellow of the American College of Healthcare Executives.

He is a frequent guest lecturer and is often quoted in the national media. He has consulted with clients in multiple countries and has over 20 years of leadership and operations experience. Nick is a Subject Matter Expert in business strategy, practice management, telemedicine, health IT, and oncology.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comment will held for moderation