Recently the President addressed the nation regarding the economic situation we are all experiencing in this country and around the world. It is very clear that we are now seeing the very obvious signs of a national recession, despite whatever spin may be put on it by the politicians from both sides of the aisle. We know now, because it is becoming very clear to diverse business owners everywhere, that the crisis is not just going to be limited to the finance sectors or the housing sectors. And we know that it is likely to get a lot worse before it gets any better and that it won’t be over for some time. The economic problems go deep and it could possibly be a decade before we’re able to fully recover. That’s a moderate time frame, not overly optimistic or the doomsday scenario that some would have us believe.
That’s what’s happening today.
We have worked with health care professionals for over 25 years and have gone through several periods of down economic times – some called them recessions, some called them “stagflation”, as well as a variety of other names. Whatever cute label one wants to attach to tough economic times, there is no fooling people with the fact that the economy in general, and their specific economic situation is far from ideal. And today, it is stated as being the worst economic situation since the Great Depression of the 1930′s.
What we have seen happen with stand alone health care professionals during a recessionary period such as this is that the doctor/owner “tightens up”. By this we mean that they usually get very worried, get “conservative” and reduce their promotion. They may start letting go of staff people and make do with fewer personnel. They often cut corners and consequently the quality of their service may begin to suffer. When the quality of service goes down patients become unhappy and start looking for another practice. They look for a practice that provides better service. Doctors who act in this manner will begin to lose some portion of their patient base. Thus it can make it a perfect time for doctors who don’t succumb to such thinking to capture more market share and increase their productivity.
Our clients generally thrive during recessions because they know what to do. They have learned how to manage their practice through objective means. They know how to effectively market without it costing an arm and a leg. We’ve been through three of these economic downturns/recessions and we’ve seen how our clients are able to take advantage of the situation rather than be the effect of it. In fact, as part of our surveying, we recently found out that, on average, our clients who are trained and skilled in practice management, have been increasing their productivity by 10% to 15% percent during those years the nation has been in recession. And this includes all socio-economic areas of the country. This type of growth is generally not true for the average practice owner.
Our clients thrive because they are able to prepare for down economic periods. They know how to closely monitor all of key areas of the practice and thus are in control of the practice. They know if they are understaffed or overstaffed, or if they have underutilized staff. Our clients have efficient systems that keep “busy work” off their desks. They don’t have a desk full of backlogged activities. They don’t give new projects to overloaded staff people. They make realistic plans based on objective data and don’t squabble with their spouses over finances. They hire, train, and monitor staff objectively and systematically and they have composed a business plan, marketing plan and financial plan they can refer back to and review and re-evaluate as necessary.
This is called running good control over your practice. And that doesn’t mean, as some people think, that it means not having fun at work or not having relaxed staff people or having people obsess constantly over profit instead of paying attention to people and service. It simply means that you know what is going on in your practice, that your staff know their jobs and work well as a team together and, because of that, you and your staff enjoy the work environment much more.
Objective systems are the component that allow staff people to remain calm and competent. When they know their jobs inside and out, it allows them to respond creatively to unique and unanticipated situations. It allows them to be calm and composed even when work backs up or the amount of office traffic could easily overwhelm them. Staff become accountable and self motivated because their work is measured by objective statistics. They are productive rather than just busy.
Prior to the current economic situation, we have seen a large percentage of practices and businesses supported and inflated by the bull markets. But this often was an artificial inflation, built on credit and people living outside their means. Now that credit is less available, it becomes obvious which offices have the infrastructure capable to handle the change. It isn’t enough to do the same old thing. Every income source must be maximized and must be maximized with the best interest of the patient in mind. Staff must be able to communicate the importance of delivering the highest quality of care without seeming to be solely motivated by profit.
Everyday we work with practice owners to put together plans and implement those plans. We do this so practice owners are able to grow and thrive in a sane manner, in economic uncertain times, and in a time frame that allows the creation of a stable infrastructure. Not only is this possible in these times but it is essential to your financial future.
To survive any activity, you must be trained and knowledgeable in that activity. You wouldn’t be an effective doctor if you weren’t adequately trained in your profession. The business environment is very tough right now. The fact is that your practice is a business and the better you are trained in the running of your business – i.e. practice management – the better you will be able to not only survive this economic crisis, but to actually be able to expand during these tough times.