Strategic Planning: An Ongoing Process

A competitive assessment can provide vital information for your retina practice.

By Andrew Maller, MBA, COE
 

Having a solid strategic plan is a cornerstone for a successful ophthalmology practice. It serves as a road map of where an organization is and where it is going. But a strategic plan should not be a static document—especially in the current fluctuating health care environment. Rather, strategic planning should be thought of as a continuous process. This article examines some of the factors involved in strategic planning for retina practices in the rocky landscape of 2018 and beyond.

The ophthalmic marketplace today is full of disruptive elements, including an aging patient population, a coming physician shortage, rapidly emerging technologies, and changes in reimbursement patterns by Medicare and commercial payors. We are also faced with the trend toward practice acquisitions, mergers, and the rise of private equity. In this volatile environment, having a strategic plan is more important than ever.

Strategic planning is an ongoing process in which a business owner—in our case, the retina practice owner or owners—evaluates what has made the business successful in the past, and, more important, what steps can be taken to continue to thrive. A strategic plan should answer questions related to the future: What is the goal for growth? What should the practice look like as it grows? What changes in geographic coverage are desirable? How many providers will be needed to achieve those changes? It also helps to develop an understanding of any environmental changes that will affect the practice in the long run.

In order to answer these questions, it is critical to perform a competitive assessment, also called a market assessment, which involves answering key questions about the patient population a practice currently serves and identifying external trends in the marketplace.

Demographic Characteristics

One of the first steps is to identify where patients are coming from: Who is referring them and where do they live? Both types of data should be readily available using one’s electronic health record or practice management system. For practices with multiple locations, a better understanding of these data points allows the practice to determine where coverage is needed most. Practices should also track their own referral patterns to identify potential marketplace opportunities; this can be especially important for multispecialty ophthalmic practices looking to add retina coverage.

In identifying potential future locations or coverage areas, it is important to determine the demographics of the population. The US Census Bureau can be a good starting point for data on age, gender, race, and socioeconomic demographics in specific areas under consideration. Once this information has been gathered, the next step is to layer in reports on the prevalence of retinal disease and other relevant data in the areas in question.

There are multiple ways to access these data, one of which is through Prevent Blindness America.1 Users can determine prevalence rates by state for retinal diseases such as diabetic retinopathy and age-related macular degeneration. The database lists the percentage of each state’s population affected by the disease, and this can then be compared with the census data by zip code. Together, these data sets can help identify opportunities in specific patient populations, assess the prevalence of retinal disease, and find potentially underserved market areas through a competitive assessment.

Knowing the Competition

Developing an understanding of the competitive landscape is the next step in this process. A list of potential competitors should include not only those within the current coverage area, but also those in areas that could be added in the future. Consider including both retina-only practices and multispecialty groups that provide surgical and medical retina services. For retina practices that provide part-time coverage in satellite locations, the process of putting this information together is trickier.

Once this list of competitors is complete, your assessment should take a deeper look at some of your practice’s primary competition. Factors to examine include the competitors’ business models, the ages of their key physicians, and the strategic relationships they have with accountable care organizations, primary care physicians, health systems, and commercial insurance plans.

For practices looking to grow through acquisition, this comprehensive review of the competition makes it easier to identify potential targets.

The Payor Landscape

Due partially to the impacts of the Affordable Care Act and the Medicare Access and CHIP Reauthorization Act of 2015 on Medicare reimbursement, substantial changes are also taking place in the commercial or private health plans in many markets. As the payor landscape shifts from volume-based to value-based, many commercial payors have already introduced or will soon introduce contracts and quality data reporting requirements that move practices toward shared accountability and costs in patient care. These changes could have a significant impact on retina practices. As such, a solid understanding of the payor landscape is just as important to the strategic planning process as the demographic and competitive analysis.

Practices wishing to stay relevant in the evolving payor environment must not only understand the changes taking place but also look to develop relationships with the commercial payors and health systems that provide coverage to their patients. Unfortunately, many practices skip this step, as it is difficult to obtain some of the necessary information. This approach is not sustainable.

A Continuous Process

Health care is changing rapidly. Retina practices wishing to thrive in this climate must commit to the planning process, remain flexible, and look to the future. To ensure continued success, think of strategic planning as a continuous process rather than a one-time event. A market or competitive assessment is just one of many steps in the process, but it is arguably the most important.

1. Vision Problems in the U.S. Prevent Blindness America. http://www.visionproblemsus.org/. Accessed November 21, 2017.

Andrew Maller, MBA, COE
• consultant at BSM Consulting
• financial interest: none acknowledged
amaller@bsmconsulting.com

 

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About New Retina MD

New Retina MD delivers cutting-edge content to retina specialists in their first 15 years of practice. Each issue provides fresh insight from younger physicians plus established mentors on clinical and nonclinical issues affecting ophthalmologists in the earlier stages of their careers. NRMD features surgical pearls, clinical research endeavors, practice management, medical reimbursement and policy, continuing educational requirements, financial planning, innovations, and more.