A visionary physician group anticipates the market rather than reacting to changes as they occur. Being aware of market fluctuations can lead to clinical and financial success, but being visionary and proactive requires thoughtful planning.
Strategic planning for physician groups differs from large healthcare organizations, such as hospitals, in many ways. The process and outcome for physician groups is often much more like a business plan given that critical issues and initiatives must be more actionable. The process is often expedited rather than long and drawn out.
Generally, the strategic planning process differs for each organization. Figure 1 (below) illustrates the differences between a traditional large healthcare organization and a focused physician group’s process.
A focused environmental assessment
Many factors can affect the level of focus involved in an organization’s environmental assessment. Physician practices should consider two key factors in limiting the assessment to the most necessary elements:
- Composition of the group will call for the need to include or exclude certain analyses related to:
- Depth and mix of specialties
- Size and geographic distribution
- Recent mergers and acquisitions (internally)
- Ownership structure
- Future assumptions about the local healthcare environment can influence the direction of the assessment:
- Traction in securing value-based payment arrangements
- Physician employment prevalence in the region
- Effects of competition’s initiatives
The environmental assessment serves as the foundation of the strengths, weaknesses, opportunities and threats (SWOT) analysis. For a physician group, that analysis will identify about four to five of each category and be a tool for use in both the development of the critical issues and the initiatives later in the strategic planning process.
A two- to three-year vision for the future
A vision statement should express the group’s ideals, standards and desired future state, but it should also be:
- inspirational, motivational, aspirational, and a realistic stretch
- a vivid description of the future state
- ideally one sentence long
- intended for internal audiences.
Practical and tangible critical issues
Critical issues are linked directly to achieving the organization’s vision. A physician group’s critical issues will be very practical, concrete and tangible, often different than the broad, multidimensional issues identified by large healthcare organizations. A large healthcare organization may identify four to six — or even eight — critical issues. A physician group may identify about four issues.
The initiatives pursued by a large healthcare organization will be high-level and enterprise-wide, while physician groups should pursue very focused initiatives, some of which may even be operational in nature, to address its critical issues.
A large multispecialty physician group may identify three to five critical issues. Examples include:
- Achieving cultural capability as a newly merged group
- Positioning for a value-based care environment
- Establishing and defining relationships with other provider entities
- Size, mix and geographic distribution of physicians and practice sites
These critical issues then tie to the group’s vision and inform the strategic initiatives. Identifying a group’s critical issues will set the stage for additional questions about the future and sustainability of the group. In the planning process, physician groups also will benefit from evaluating their ability to remain independent or their need to become employed or seek affiliation.
Focused strategic initiatives
Each critical issue should be addressed by several initiatives, which can be narrowed down as the planning process is refined. For example, if one of the critical issues is, “Establishing and defining relationships with other provider entities,” other example initiatives might include:
- Enhance and leverage current relationships with hospitals
- Develop relationships with other hospitals
- Consider acquisition by another physician group
- Partner with another physician group through back-office functions or a virtual model for the Medicare Access and CHIP Authorization Act of 2015 (MACRA)
- Proactively partner with or acquire small or solo physician practices
The strategic initiatives lead to the formation of the group’s three-year goals and one-year objectives. These goals and objectives are the backbone of the operational plan that should accompany the strategic plan. For physician groups, these goals will be operational in nature and should translate easily to a two- or three-year plan to operationalize the group’s vision.
Other common elements of the process include periodic check-ins to assess progress regarding implementation of the strategic plan. Mid-course corrections and refinements can be made as necessary.
One of the hottest topics to address in physician group strategic planning is evaluating the ability to remain independent in a world of consolidation, with respect to potential partnership/affiliation with another physician practice or with a hospital or health system. Assessing a group’s ability to remain independent starts with an evaluation of the group’s current position. Figure 2 (below) illustrates 11 operational, financial and strategic categories that provide insight into a group’s current position. Based on the graphic, the further right the group lands, the better the group is positioned for the long term. High-performing groups that are well-positioned for long-term independence and success should plan to maintain and enhance existing strengths.
Groups that score on the left end of the spectrum are not well-positioned to remain independent and successful, even in the short term. Under-performing groups should plan initiatives around improving their position and pursuing potential relationships with other entities.
This assessment is used as a guide to help a group decide whether to remain independent or to pursue employment or affiliation, but many factors are at play.
Keys to success
Whether the strategic planning process takes place internally or is facilitated by a third party, there are several keys to success:
- Establish stakeholder allies: Using a steering committee will provide the opportunity to identify and engage key stakeholders and to establish champions along the way
- Provide the appropriate level of education and information, applicable to all components of the planning process, from the environmental assessment to a board retreat, limit communication to the most necessary and critical information and use it carefully to establish a shared understanding early in the process
- Draw conclusions that are meaningful to all physicians and other clinicians — focus the conclusions through a lens of patient care, service, and quality
- Direct attention to the critical issues — avoid spending too much time nitpicking the environmental assessment (also known as “analysis paralysis”), and instead use it to create a shared understanding of the current state and move toward envisioning a future state by discussion the critical issues and focusing on their impact on the organization
- Understand cultural implications — especially in recently merged groups, taking the group’s temperature will ensure that the conclusions drawn, critical issues identified, and initiatives developed are conducive with the group’s culture
Many factors can influence a physician group’s ultimate strategy, making both goal-setting and implementation an intricate process. The identification of critical issues, crafting a clear and concise vision statement, and conducting a thorough environmental and independence assessment all contribute to the overall success of an organization. Given the ever-evolving healthcare market, there is no “magic bullet” for success, but adhering to a comprehensive strategic plan will aid any physician group in achieving its goals.