Seven characteristics of practices that thrive at any size
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Thrive (thrv), intransitive verb:
1. To grow vigorously
2. To gain in wealth or possessions
3. To progress toward a goal
Middle English, from Old Norse “thrfask”
– Merriam-Webster Dictionary
Most ophthalmologists are conditioned by their hard work and resulting high station to feel exceptionally talented, or at least exceptionally lucky. And many eye surgeons could be said to thrive, although not all do. But some, even when they are indeed thriving by any reasonable measure, feel they are falling short of their potential.
That is an easy sensation to have in the present environment. Fees are stagnant. Staff wage expectations are rising. Retirement nest eggs are deflating. Inflation burns. Recession looms.
At a time like this, it helps to affirm those enduring factors for practices to thrive at every scale, irrespective of their setting or context — corporate, institutional or private.
Here are seven important factors of practices that thrive. There are many others, and some of these may be more critical in your own situation. Review this list with your staff and partners. Celebrate the factors you are strong in, and commence work on those factors in which you may be falling short.
1. Provider engagement and ambition
Why are we putting this in first place? Here is a simple explanation. We have clients with middling interest in the affairs of their practice who barely hang on even though they are unopposed in their service area. And we have profoundly engaged clients who thrive in some of the toughest markets of America: Los Angeles, San Francisco, Denver, Miami.
What does engagement look like?
- Taking the time to step outside of your medical wheelhouse and learn new things: finance, benchmarking analysis, marketing, best HR management practices.
- Active participation in business and quality assurance meetings.
- Developing a memorized command of key performance indicators such as labor efficiency ratios, provider output standards and the like.
And remember, we are referring to “ambition” in the good sense of that word. Raw, grasping ambition driven by personal ego or self-doubt makes for toxic motivation. Those around you are unlikely to do their best work to soothe your insecurities. Your own achievements and those of the team will be higher if your ambition is more outer directed. “We are building a full-service practice for professional satisfaction and patient convenience.” Or, “Building five satellite offices over the next decade will make our care more accessible to our distant patients.”
2. Owner alignment on an agreed plan for the future
Solo practice is a dream in this area. No need to get multiple headstrong owners lined up and thinking the same way. Just look in the mirror and confirm with yourself the path ahead. But those in larger settings have the challenges inherent with human nature.
Interestingly, the biggest challenge is to get the owner cohort out of their daily grind and opening up a dialog about where the practice is heading in the years ahead. What is an appropriate planning horizon? For the average private practice, about 5 to 10 years: shorter if your environment is dynamic (a competitive market, an internal partner crisis), longer if you work in a more stable and predictable setting.
Once you can agree on an appropriate planning horizon, you can frame up the options by answering a short list of questions:
- What is our desired service area (our north-east-south-west boundaries)?
- What services will we add or subtract?
- What is the most appropriate provider mix of ophthalmologists, optometrists and others?
- What is our intended growth rate?
- As our owner base ages, what will be our succession plan?
3. Basic leadership and management competence
You and your administrator do not have to possess Churchillian levels of leadership to command a thriving practice. But you do have to develop the basic habits of effective leadership and operational control, chiefly:
- Putting in the time. As the saying goes, 80% of life is just showing up. If you are the managing partner of a smaller two- to five-doctor private practice, you probably need to commit no fewer than 8 hours a week to business affairs, no matter how terrific your administrator is.
- Steadfastness. Having an unwavering commitment in all things large and small. This includes even the most granular level. Your people will not do their best work for someone who vacillates between conflicting policies.
- Command over the details. Even the ones that bore you.
- Energetics. Watch an effective leader at work. Whether it is a classroom professor, shop foreman or CEO, great leaders bring an energy that others cannot help l but resonate with. (Think of the last time you needed to leave clinic early and started moving faster. Your techs probably stepped up their pace as well.)
- Engaging all of the stakeholders. This can be a very un-doctorlike behavior. Surgeons are accustomed to making their own high-stakes decisions on the fly. When you are considering a course of action outside of the OR, ask, “Who else needs to be involved with this decision?”
4. The luck (or wise choice) of working in a favorable market
Consider the tale of two cities, rural and urban. In the rural practice, you might have 50,000 people per ophthalmologist, 20+% of whom are older than 65 years with not great health habits. Your office facilities cost just 2% of cash flow; staffing costs another 25%. You personally bring home 50 cents of every dollar collected. On that income, you can afford the nicest house in town. Your average employee has a relaxing 10-minute commute to the office after dropping off their young kids at their mom’s house. Your average patient is grateful and compliant and bakes you cookies for the holidays.
In the urban practice, you might be lucky to muster 10,000 people per ophthalmologist. Perhaps 14% of them are seniors, and half of them are vegans with a gym membership. Your office costs you 10% of every dollar you bring in; another 35% goes out for lay staffing. With high overhead, your take-home pay is only 25% of collections, which is rough because your family of five has to squeeze into a 1,200-square-foot townhome. Your average employee arrives every morning with traffic-jangled nerves after dropping off their kid at a day care that costs a third of their salary. Your average urban patient is similarly stressed and will get a second opinion from Dr. Google after every appointment.
Where do you practice?
5. Reinvesting for growth and excellence
If you have a mature, steady-state practice and are at a happy plateau in your professional life, you can probably skip this one. There is no rule saying you cannot thrive on status quo.
But for most practices, “thrive” means “grow,” and growing costs money that either has to come from doctor profits or bank loans. Both of these can be problematic.
First, it is easy to develop the habit of draining your practice bank account instead of building internal capital reserves. Second, most practice owners are not oriented to think like capitalists.
Take a look at your balance sheet (the monthly report from your CPA showing assets and liabilities). If yours is the average practice, you probably will have little shown under long-term financing. And you might feel pretty great about being debt free (even though you are credit worthy and have access to a lot more capital than you are using). But a “real” business executive would look at the same report and see a company that is not harnessing the power of capital access to grow and thrive.
6. Always centering policy on optimizing each patient’s experience
Pleasing patients gets a lot of lip service. And periodically, practices will actually take it seriously, survey patients and make improvements. For a while.
Then they fall back to a baseline of relative neglect. Waiting times creep back up. Housekeeping stops getting after scuffs and dust bunnies. The techs go back to chewing gum and checking their text messages on the floor.
The truly thriving practices we work with embrace the importance of patient satisfaction durably, from the top of the organization. They keep up the survey work and make endless small improvements based on what they learn.
7. Market tenure
If you are lucky, you live near a decades-old deli or coffee shop. The best ones have a line out the door, and the wait is worth every minute. Such establishments thrive not because they were great when they opened, but because slowly, over the years, the owners learned how to hire better cooks and waiters, build a better menu and make a better sandwich. The luckiest eye surgeons are in the same position. After the inevitably tough start-up years, they finally “get” the formula for success and then keep things going until it is time to pass the enterprise on to new owners. The trick is to apply Nos. 1 through 6 above with enough consistency over time to finally arrive on top.
- For more information:
- John B. Pinto is the author of several books on ophthalmic practice management, including John Pinto’s Little Green Book of Ophthalmology: Strategies, Tips, and Pearls to Help You Grow and Manage a Practice of Distinction, UP: Taking Ophthalmic Administrators and Their Management Teams to the Next Level of Skill, Performance, and Career Satisfaction (with Corinne Wohl), Simple: The Inner Game of Ophthalmic Practice Success, and Ophthalmic Leadership: A Practical Guide for Physicians, Administrators, and Teams. Available now for purchase at slackbooks.com. Receive 20% off with promo code PINTO20. He can be reached at 619-223-2233; email: pintoinc@aol.com; website: www.pintoinc.com.