Developing Your Practice's 2023 Strategic Plan

00:00:00 Hi, it's Dr. Weitz. Thanks so much for joining me for this episode of the Private Medical Practice Academy. Happy New Year. Have you made your New Year's resolutions? One of mine is recommitting to my exercise program. I've got a goal of strength training three days a week, and walking a minimum of 10,000 steps per day. We all make personal resolutions,

00:00:24 but the new year is also a time for you to set goals for your business. I'm sure you've heard that goals are nothing more than dreams with deadlines, but goals have to be based on something other than wishful thinking. On that note, you may have heard me talk about why it's so important to have a business plan. The business plan is your roadmap to success.

00:00:46 One of the most important things to recognize though, is that plan is not static. To achieve your goals, you need a dynamic plan, an action plan, and today I'm gonna tell you how to develop a strategic action plan for your practice to thrive in the new year. To begin with, we need to look back to plan forward. If your practice is up and running,

00:01:08 you'll wanna gather your 2022 and 2021 profit and loss statements. You'll also want to gather your year end billing reports, including charges and collections broken down by payer, as well as your aging report. We need to analyze last year's data to find your business' strengths and weaknesses. Think of it like an autopsy. Did you have 2022 goals? If not, we're gonna correct that for 2023.

00:01:37 Did you meet your 2022 goals? Did your revenue grow? You can look at this over the course of the year. You can also look at it month over month. You can compare it to your revenue for 2021. Now, I want you to do the same thing for your expenses. Are your expenses consistent with what you budgeted for? Did you have any unexpected expenses?

00:02:01 Are there expenses that maybe you could reduce or eliminate? You also wanna look at how expenses occur. What do I mean by that? Are there months where you have more expenses than others? This is important for you to understand as you plan for your cash flow in 2023 and the moment of truth, your profit is your profit more, less, or exactly what you expected in 2022.

00:02:28 Just to be clear, if you're being taxed as an S-corp and you pay yourself a salary, remember that your profit includes that salary. Now, if you were in practice, how does your 2022 profit compare to 2021 at the expense of stating the obvious? Your profit is dependent on both your revenue and your expenses. Changes in either of these are going to affect your bottom line,

00:02:55 so by addressing the good, the bad, And the ugly, it will help you as we move forward. To set your 2023 strategic plan, I want you to think of this strategic plan like a roadmap. We just went through the exercise of knowing where you are now, where are you going? In other words, how much do you wanna take home in 2023?

00:03:19 Of course, this is the ultimate goal. Just like Google Maps, you need not only a start at an end point, but turn by turn directions. This year's strategic plan involves setting both yearly and quarterly goals for you and your practice. These goals are going to depend on the stage that you're at. One thing I want you to note is that your quarterly goals should build to achieve your yearly goals.

00:03:46 Some examples of yearly goals could be starting my practice by X state, or you may set a percent of year over year growth in revenue or in volume as the goal. Other examples could include, add a new physician or a mid-level or add a new revenue stream. These are big picture goals, but as with everything else in life, the devil is in the details.

00:04:14 Again, the question is how are we going to get there, and that's where the quarterly goals come into place. Let's say you wanna increase your revenue, you can increase your volume and see more patients. You can change your payer mix to get paid more per visit. Along the same line, you can renegotiate your contracts or you can improve your collections.

00:04:38 Of course, you can do all of these, but unless you have an action plan, you can easily get to the end of 2023 and haven't accomplished any of them. So here's how I would attack this. First I'm going back to my 2022 postmortem. What weaknesses did I identify, which needs to be addressed first? Is it that I'm not seeing enough patients?

00:05:05 In that case, my first quarter goal is increasing my volume by X percent. It's important to set a specific but realistic amount. Then the question is, how am I gonna do it? Do I have a marketing plan? Is my marketing plan working? Are my phones being answered by my staff or does it go to voicemail and so patients aren't actually getting scheduled?

00:05:26 What's my no-show rate? What percent of my patients cancel within 24 hours of their appointment? Each of these questions are things that you should be able to answer from 2022, and they in turn convert to a potential quarterly goal for you to improve on. Now, let's talk about reimbursement. Which insurer is my lowest payer? When are my contracts terminating? When was the last time I I renegotiated my contracts?

00:05:58 What does my AR look like? How many denials do I get a month? What percent of what does due from the patient am I actually collecting at the front desk? These are just a few questions that I need to have 20, 22 answers for. There are also your potential quarterly goals for 2023. For example, we will decrease our average days in AR from 60 to 45,

00:06:24 or we're going to decrease the percent of AR greater than 90 days from 25% to 15%. On the other hand, maybe you wanna increase the amount you're paid per visit. Your goal may be to renegotiate your contracts starting with your lowest payer, or you may decide to go out of network with your lowest payer. Another goal could be collect 95% of what's due at the time of the visit,

00:06:50 figuring out which of these is most important, reli on the fact that you actually have data to know where your issues are. Coming back to what I said about the business plan, I wanna reiterate a couple of things about goals. First. Once you achieve a goal, it's not really a one and done so even if you set a quarterly goal, you actually have to then maintain the goal that you've achieved.

00:07:17 Second, you can certainly have more than one goal at a time. You just need to be realistic. If you pile too much on, you'll end up not fully accomplishing any of them. If you're setting multiple goals, make sure that they're synergistic so that they are actually achievable. One of the hardest things to do when you're looking back at how things went in your business is to take a critical look at yourself.

00:07:44 How long is it taking you to finish your charts? Am I always running behind? What do my patient satisfaction scores look like? Is my documentation and adequate in the actual reason that we're getting denials? Or at a minimum, are the delays in reimbursement because of requests for additional documentation? All of these can affect your practice's health and your ability to meet your goals.

00:08:10 Turn each of these questions into a potential goal. So far, I've talked to you primarily about ways to increase your revenue or increase the amount of money coming into your practice. Let's also talk about expenses. Are there any expenses that you can prune? For example, am I using the lowest cost vendor or G P O? Can I renegotiate my lease?

00:08:35 Can I find lower cost benefits for my employees? Again, each of these is a potential goal and a way to improve your practice over the course of 2023. Now, I'm not suggesting to you that all of these should be your 2023 goals. I'm actually not Suggesting that any of them should be your 2023 goals. What I am telling you is that you need to identify which of the questions have yielded an area for improvement or growth.

00:09:06 Those answers turn into your goals, make a list of the goals, and start with the biggest win potential for the least amount of effort. From there, you have a strategic plan with your yearly and quarterly goals for 2023. You can pat yourself on the back for a great start, but if you haven't heard it yet, don't file this away and forget about it.

00:09:30 The purpose of this plan is to review it at least monthly. Am I on track to meet this quarter's goals? If not, what do I need to do so that I can actually get my practice to achieve those goals? Where am I relative to my yearly goals? One of the overwhelming advantages of being in private practice is being able to pivot and adapt,

00:09:53 but that only works if you are actively engaged in managing your plan and your practice wishing you health, happiness, prosperity, and enormous success in 2023. Please be sure to sign up from my newsletter below. I'll be sending you tips on how to start a practice, grow a practice, and then add multiple services so that you can maximize your revenue.