There was a time, not long ago, when physician practices believed they need not trifle with pedestrian business ideas such as ‘strategy.’ Strategy required making choices. And choosing smacked of not caring for whatever patient walked through the door. That ran against the ethical standards of medicine.
Instead, physician practices simply made do without having a legitimate business strategy. The protection of the medical license, high enough reimbursement rates that allowed for a decent standard of living, and the fact that everyone played by the same set of rules, meant that strategic avoidance, was not a fatal or even serious flaw.
Things sure have changed, haven’t they?
Economic pressures have become a vise grip; ‘providers’ of all sorts encroach on the physician’s domain from all angles; and new competitors don’t operate with the same business models as physician practices.
In a world that is increasingly competitive and increasingly driven by a consumer mindset, for physician practices to succeed, they have two choices: be the only surgeon for 500 miles or get very clear about who they are, who they are going to serve, and how they are going to serve them.
Developing and executing a real strategy is hard work because it involves choices and trade-offs saying ‘no’ to some good ideas in order to really stand out in a specific way. It is about creating a difference that is clear enough for those people who are specifically seeking that difference.
Let me take a moment to dispel the frequent default answer: ‘Delivering high quality care’ is not a strategy. First, how is high quality care different from what all other physicians seek to provide? Second, what version of high quality care are you delivering?
This brings us back to the concept of being different. Companies that excel in the market, those who grow and are strong financially, have made decisions about the subsets of customers they are going to serve and how they are going to serve them. They have then aligned all of the things they do around that idea (which customers, what needs) so that they deliver on that, whatever it is, at an exceptional level.
The same is now true for physician practices. Different matters, different wins.
Let’s take a hypothetical example. An internal medicine practice finds itself with a couple of concierge physicians over here, a chain of walk-in retail clinics over there, and the employed physicians of the big health system seemingly everywhere. What are they to do?
If they have no clear strategy and if in the eyes of the market there is really nothing unique that makes them stand out, they will start to lose. The folks wanting high touch will go over here and those who value convenience and a low price will go there. Soon, the practice will start noticing a slow decline in patients. Maybe the example is not so hypothetical.
A better alternative is to do the hard work of deciding where and how to be unique in the market. Then do the heavy lifting to make that a reality so that the segment of the market that wants what you are selling, will want to go nowhere else but to you.