DESTIN, FLA. — Success in a rheumatology practice requires that the medical practice also be viewed as a business, and a cornerstone of a good business is its business plan, according to Dr. Max I. Hamburger.
Almost all other entities in medicine have business plans, including insurance and pharmaceutical companies and government agencies, he said. These groups study the marketplace; they know the leadership, have a plan for achieving their goals, and have tools for measuring their success.
Physicians can level the playing field by being equally prepared with a working business plan in place, Dr. Hamburger said.
Rheumatologists tend to resist defining their practices as businesses, but thinking of them as such can improve both quality of care and the bottom line, said Dr. Hamburger, assistant professor of clinical medicine at the State University of New York, Stony Brook.
It helps to recognize that the skill sets required for good patient management and good practice management are similar in many ways.
For example, both require evaluation and management through the collection of subjective and objective data, assessment, and planning.
It also helps to view a business plan as a tool that simply defines what you are going to do, where you are going, and how to get there, he said, challenging his audience to “resolve to draft a practice and business plan upon returning home.”
“You have to write it down,” he said, explaining that the act of putting the plan on paper serves as a “cognitive commitment” to follow the plan.
The goals, however, must be achievable, which requires a solid knowledge of the environment in which you are practicing.
Not only does a business plan document your vision of all the details of your practice, it also can help you identify gaps in preparedness, force an objective examination of all the details of the practice, identify necessary resources, project financial needs, and serve as an “owner's manual” for daily operations and activities.
A number of metrics tools are needed to evaluate the practice's progress and success. Year-to-year budget comparisons, cost accounting, and claims analysis are particularly important, Dr. Hamburger explained at a rheumatology meeting sponsored by Virginia Commonwealth University. He added that other useful tools include 3- to 5-year projection spreadsheets, relative value unit-based provider and payer analyses, and productivity formulations.
Practices are more likely to fail when they don't have a good business plan in place and when they fail to employ proper metrics; there are ways of improving the odds of success: Agree on a practice vision, write (and follow) a business plan, employ proper metrics to measure performance and refine goals, and review and modify the plan annually, he advised.
Dr. Hamburger's presentation was made during a symposium supported by an unrestricted educational grant from Centocor, Genentech, and Smith and Nephew, all of which he has served as a member of the speakers bureau, and from which he has received educational grants, and/or conducted clinical trials.