It has been said that failing to plan is the same as planning to fail. This was not always true for medical practices -- little planning was required when buyers (employers) did not use their purchasing power to effect medical care and practice, but only shopped among insurance plans. Insurers and patients had little incentive to control costs or shop for the best value in medical care. But as the costs of health care spirals upward, the employers' laissez faire approach to purchasing health insurance for employees has been largely replaced by employers who demand control of expenditures from the insurer -- hence the emergence of "managed care," and the need for better physician practice marketing and planning.
Marketing is the act or process of buying and selling in a market. In the medical practice, it is the exchange process through which patients and physicians receive mutual benefits -- medical services and treatment in exchange for remuneration and professional satisfaction.
According to some, strategic pursuit of paying patients is unethical, since it is the partial responsibility of the individual practitioner to address issues of distributive justice by pursuing indigent patients. Thinking in terms of selling services may be viewed as unprofessional or unethical, degrading the physician by making the practice of medicine merely another business.
Marketing is not advertising, although advertising may, or may not, be part of marketing. Advertising is the paid use of media. Anyone who provides goods or services is involved in marketing. The issue, then, is not whether physicians engage in marketing, but rather whether they do it well.
Not all changes to a medical practice will be considered in terms of the marketing plan. But marketing decisions are frequently made without considering the full impact on the practice. There are monthly articles in publications such as OBG Management and Medical Economics that pertain to practice marketing, though those words are seldom used - articles about fees, information systems, gaining referrals, serving as a primary care physician, improving scheduling, pleasing patients - these are all part of a marketing strategy.
Developing an effective written marketing plan is an important part of a successful medical practice. It is not important what it is called -- a marketing plan, a strategic plan, or The Plan. All physicians and as much of the staff as possible should be involved in developing a marketing plan. Staff is unlikely to buy into a plan if they do not help develop it, and understand the reasons for the changes that are expected.
Marketing is a continuous process. It consists of these steps, which may be listed as sections of your marketing plan:
- Research and Analysis. Gather and digest pertinent information about the environment and about your practice. Identify needs of the community, and identify strengths and weaknesses of your practice.
- Defining Goals. Include a mission statement. Identify what is desired.
- Establishing strategy. Decide which actions that are necessary to achieve the goals.
- Implementation. Apply the plan.
- Monitoring. Both before and after the changes are made, you must establish methods to measure the effects of changes. Then return to step 1, and begin the cycle again.
Research and Analysis
This consists of looking at what is happening in the marketplace, predicting what will happen in the future, examining your own practice, and conducting a self assessment.
The self assessment will require that you examine your expectations, in terms of the amount of time that you want to spend on the practice, your income and retirement expectations, and your professional goals. Physicians must know their professional capabilities and skills, and must recognize their limits. A realistic view of patient perceptions of the physician, in terms of image and bedside manner, is important. This is best achieved by using a patient satisfaction survey.
During the practice assessment, all aspects of the practice should be examined - financial status and trends, staffing, fee schedules, facilities, clinical capabilities, communications methods and systems (for inter-staff, patients, and other medical providers), extent of involvement with various payers, patient demographics, financial resources, scheduling capabilities, hours. It is not just today that you are investigating, but also tomorrow. Look at information covering several years, if possible, to see where the practice is headed. Trends may show that you are headed for trouble, even though problems have not yet developed.
Assess referral relationships. Do the ones exist that you want? Are they improving? Deteriorating? Are HMOs significantly changing your relationships with referral sources? Questionnaires should be sent to referral sources to identify criteria for making referrals, the number of ob/gyn referrals made, and which managed care plans provide them with the most volume.
Patient satisfaction surveys are extremely important as a monitoring tool to assess the practice and the practitioners. Ask only questions that are useful to you, and that are not redundant from other sources of information available to the practice. The method of conducting the surveys must be consistent. The time the survey is given to the patient has a large effect on the patient's response to the questions. Monitoring patient satisfaction should be a continuous process. A one time survey will provide limited useful information.
Conclude the practice assessment with a realistic list of strengths and weaknesses.
Begin the external assessment by seeing what competitors are doing, and what they are planning. Remember that your professional peers are also your competitors. Are new IPAs developing? Are new doctors being recruited by the hospital? Are new inpatient or ambulatory facilities opening? Are nurse practitioners or midwives joining the other ob/gyn practice in town? Are the family practitioners beginning to do more ob care? Discussions with your colleagues in medical practice will reveal the answers to most of these questions. Once again, trends are as important as current status.
Increasingly important is the behavior of the purchasers of care - the employers and the insurers. Managed care organizations are already paying for 75% of the care in some areas. In others, it accounts for only 5% or less of the market, and growth is expected to continue at a snail's pace. Employers may be contracting directly with health care providers, or they may be planning to.
Look at the demographics in your community or service area. The latest census report, available in your local library, will have most of this information. What parts of the population are growing, and what parts are shrinking? Is the population aging? Is there a fast growing ethnic group? Moves by major employers will affect the demographic predictions. For example, how many women will move into (or out of) the community (or decide to have babies) as the result of the manufacturing plant that is opening (or closing) next year? Is the local economy growing?
The trends in your community should be compared to the trends in your practice. Perhaps the average age of your patients is increasing, with fewer births, while the population of younger women in the community is increasing. This could be the result of competition, location, or other characteristics of your practice. Do your best to determine the causes of the trends. List the needs of the community which your practice may be able to address.
During the research phase of a marketing plan, you will develop a good idea about the community and your competition, and your capabilities and expectations. Develop a list of threats and opportunities in the community that your practice could address. From the self and practice assessments, develop a list of the practice's strengths, weaknesses, and of your expectations. Using this information, you can develop realistic goals for your practice.
Your professional expectations should help to define a simple mission statement. For most practices, this will be something basic, such as "we will provide compassionate, comprehensive, cost effective, quality health care to women of all ages," or "our practice will provide the highest quality gyn/onc services in the metropolitan area." Not appropriate: "I'm in the business of medicine." "I practice surgery." "We deliver babies." The mission statement will give a framework for developing the rest of the plan. Ideas that do not help the practice achieve the mission statement do not belong in the plan. Change the plan, or change the mission.
Goals should be realistic and concrete, but should require some effort to achieve. Deadlines should be included. Some examples that an ob/gyn practice might use:
- Increase number of referrals from Groups X and Z by 20% next year
- Decrease patient waiting time to an average of 15 minutes or less by Oct. 20XX
- Increase number of patients with indemnity insurance by 25% before Jan. 20XX
- Develop an ob/gyn IPA covering the entire county by June 20XX
- Return all phone inquiries from patient within 30 minutes
- Increase the patient load by 15% monthly by July 20XX
Goals are measurable desires.
A strategy is a set of actions that describe how you will achieve a goal. Include as much detail as is needed. List the responsible person, and include a deadline for accomplishing the action.
Goal: Decrease waiting time to an average of 15 minutes or less by October 20XX
- Increase time between appointments from 10 minutes to 12 minutes effective immediately (Appt. Clerk - Marilyn)
- Begin using block appointment method for all future appointments effective immediately
- Hire and train a physician's assistant by October 20XX (Prac. Mgr. - Jim, Dr. Smith, Dr. Jones)
- Begin reminding all patients of their appointments 24 to 48 hours before the appointment by September 20XX (Prac. Mgr. - Jim, Receptionist - Liz)
Some actions may help to achieve multiple goals. Hiring a midlevel practitioner may decrease waiting time and increase referral base.
A well developed marketing plan will result in identifying several areas where your practice needs to be changed. This may mean altering the organization or the physical plant. It may mean that the physician may need to spend less time with each patient, or more. It is important to approach the goal setting and the strategy development with an open mind, to allow the most promising solutions to develop.
Sometimes it may be unclear whether an idea is a goal, or a strategy. For example, you may decide that you need a new electronic medical record system. This may be a means to an end, but it is also a goal that will require several actions to achieve. It is not important how it is categorized, as long as you get it done.
There are many ways to increase a practice's attractiveness to managed care organizations, just as there are many types of managed care plans. Quality is increasingly important to employers and plans, so be prepared to demonstrate your Quality Assessment (QA) activities. This should include chart reviews, treatment protocols, patient satisfaction surveys, and minutes of staff QA meetings.
All physicians belong to networks, though some are more formal than others. The importance of developing and strengthening relationships with other practices will continue to grow. This may mean establishing a group without walls. It may mean selling your practice. It may also mean calling your referral sources more quickly with information about the patient.
There is an ever growing need for access to timely and accurate information about your practice. You must monitor such things as revenue per health plan, days in accounts receivable, patient demographics, and patient outcomes. To get appropriate information, one must have the right information system. Examine your needs carefully, and be prepared to invest in your practice.
All efforts to improve your practice, to meet the needs and remedy the deficiencies you identified, are next to useless unless your customers (patients, employers, and health plans) find out about them. Word-of-mouth from patients and colleagues will partially, but not completely, serve this purpose. That is why the marketing strategy should include the use of media and public relations.
Some texts on practice management may refer to "communication pieces" due to the traditional taboo against professional advertising. However, the 1977 Supreme Court decision affirming the right of attorneys to advertise opened the path for any professional to advertise without fear of legal ostracism, and in 1979 the FTC ruled that the AMA and other medical organizations engaged in illegal conspiracies to restrict competition by prohibiting advertising. The restriction of advertising, rather than the advertising, has now been accepted as unethical. The AMA's revised ethical guidelines on the use of advertising and publicity state that advertising must not be misleading, false, or deceptive.
Although media advertising continues to be important to the success of many practices, the effectiveness of such advertisements may be of decreasing importance in markets that are largely managed care, since patients will use the lists provided by their health plans to select their physicians. In such markets, marketing plan goals may include increasing the number of managed care patients seen. This may mean participating in more plans, or it may just mean increasing the number of patients from particular plans.
Managed care has resulted in innovative appeals to employers and consumers. One California group used television to advertise directly to potential patients, telling them that ob/gyns were allowed to be their primary physicians, describing their practice, and suggesting that patients ask their employers to get the medical group onto their HMO's panel.
As mentioned previously, referral relationships are increasingly important for specialists. Specialists may offer late hours to take calls from referrers; reserve time slots for patients who need immediate attention; and write personal thank you notes to referral sources. It is very useful to track referral sources by the number of referrals and the payers of those patients.
Public relations (PR) is part of any marketing plan. PR involves the active participation in community groups and activities. Physicians and practice staff may already do this, without considering it public relations work. Great personal satisfaction may come from community service activities. These activities are opportunities to meet people outside the medical profession, to get away from the office, and to become a more well rounded individual. Community activities increase your visibility and prestige in the community. For example, volunteering to serve as physician for a local sports team can be fun, while establishing bonds with athletes and their families that may last for years.
Marketing strategies should include a budget. A detailed cost/benefit analysis is not necessary, but you should have a pretty good idea of projected costs and benefits. This will allow you to ensure that needed resources are available, to measure progress, and to estimate the return on investment.
Assign who is to do what, by when. Let everyone know what is expected. Talk about it. Agree to it. Post it. Distribute it. And do it!
Monitor progress on a weekly or bi-weekly basis, and remind everyone that progress is monitored. A brief monthly in-house newsletter highlighting achievements (and special events such as birthdays, kids soccer championships, and anniversaries) will help stimulate everyone from physicians to file clerks to stay on track. Some weeks nothing will be done. But by continually monitoring and reporting, progress will be made, tasks will be accomplished, and goals will be met.
A Word on the Use of Consultants
It is possible that developing a marketing plan is best done by an outsider, at least the first time through the process. Hiring a consultant will demonstrate commitment, and will allow the process leader to operate unencumbered by internal problems of the practice. With or without the consultant, this process requires the commitment of everyone in the practice, most importantly the physician leaders. For additional information on hiring a consultant, refer to the ACOG web article Tips on Choosing and Working with Consultants.
The marketing plan should be completely reevaluated at least once annually, starting with assessing your own expectations. The health care environment is constantly changing. This planning process allows physicians to determine their future.
Other sources of information:
This is a short list of resources that may be useful to you as you develop a marketing strategy. Most books on practice management include a chapter or more about marketing a practice.
Amazon offers several books on practice management and marketing, including The Physician Manager's Handbook, 2nd Ed., by Robert J. Solomon, (Jones & Bartlett, 2007), and Marketing Your Clinical Practice, 4th Ed, by Neil Baum, MD, and Gretchen Henkel.(Jones & Bartlett, 2009) www.amazon.com
The Medical Group Management Association (MGMA) sells several books on marketing, including A+ Marketing for the Healthcare Industry. Other practice management materials are also available. www.mgma.com or 877-275-6462