Business 101: Using Basics to Grow Revenue
As radiology practices nationwide look for new revenue streams to compensate for ever-declining reimbursement, the answer might be getting back to basics, according to Greg Thomson and Dan Simile Jr of Medical Management Professionals, Inc (MMP), Atlanta, Georgia. In the first installment of a four-part series on critical business principles, Thomson and Simile outline three ways in which practices can improve the effectiveness of their operations: goal setting and strategic planning, execution of goals, and communication and information sharing.
“If you do not have a business approach when dealing with the operations of your practice, you will be paralyzed. You will not be able to set goals, and even if you do communicate, you will get bogged down in areas that should not be the focus of the group.”
--Dan Simile Jr, MMP
Greg ThomsonRadiology groups, which are typically run as democracies, must face the twin problems of tyranny of the majority and obstructionism of the minority, Thomson warns. Because the principals in radiology practices are all professionals, it is difficult for leadership to emerge. He says, “Everyone is equal, and nobody wants to tell anyone else what to do, and it leads to inaction and apathy. Each physician may have a slightly different goal, and typically there is not a lot of communication in terms of setting goals, sticking to them, and measuring the results.” Goal Setting and Strategic Planning The first basic business principle named by Thomson and Simile is goal setting, which, as Thomson observes, can be a difficult process in a radiology group. “It is easy to name off 20 goals you may have as a practice,” he says. “The idea here is that if you list 20 things, you will do all of them poorly. Limiting the number of goals you set is key.” Thomson recommends using a philosophy from FranklinCovey® (a global business-consulting and training leader based in West Valley City, Utah) that calls for the annual establishment of three wildly important goals (WIGs). “WIGs are things so important that if you don’t accomplish them, it’s a failure for your practice,” Thomson says. “You need to set three main WIGs, and everything should revolve around those goals.” Successful WIGs have a few common characteristics: they are well defined, they are easily measured, and their progress can be tracked. Thomson gives the example of a radiology group in Florida that made one of its WIGs trimming $500,000 from its operating expenses. “That is exactly what a WIG should be,” he says. “You want to know where you were and where you need to be, and you need to be able to measure your progress.” Simile offers some cautionary words for groups establishing WIGs for the first time. “If your business is threatened, you may have to replace one WIG with another,” he warns. “If you think your hospital contract is going well, providing service might be one of your WIGs, but if something comes up that is a threat to that relationship, it is time to regroup and decide what is more important.” He also warns radiologists not to lose sight of the day job: arriving at work on time, reading the appropriate number of studies, and interacting with referring physicians. “All of that has to continue,” he says. “The WIGs are things to do in addition.” Goal Execution To ensure that practice members strike the right balance between the day job and the WIGs, Thomson and Simile recommend frequent meetings to reinforce strategic goals and look at how they can be better implemented as time goes on. “Executing your WIGs requires self-discipline,” Thomson stresses. “You need frequent meetings and scoreboarding. Your progress should be easily understood and visual.” Thomson and Simile recommend convening at least once a month to reinforce the importance of WIGs, measure progress, and look for ways in which each staff member can work toward the group goal. “There is a challenge in determining how each person can contribute,” Thomson notes. “The shareholders may all contribute in the same way, but then you have technologists, nonphysician clinical providers, and clerical staff. Everyone in the organization should see what his or her role is in contributing to the entire group’s goals.” Simile adds that goal execution is not limited to one area of the business any more than it is limited to one professional role. “You take the whole practice—business, clinical, and marketing—and you say, ‘One of our WIGs is offering better service to referring physicians, and we have discovered that we need to reduce turnaround time to make them more satisfied,’” he says. “Those are the kinds of things you have the opportunity to discuss in your meetings.” Communication and Information Sharing You have set your WIGs and reinforced them through frequent meetings; now what? “As you might imagine, it is not easy to communicate everything that goes on in your practice, especially as it relates to your goals, on a monthly basis,” Simile says, “so we recommend creating a platform where everything staff members might want to know is there and available to them quickly.” MMP is currently developing a proprietary informatics tool for this purpose, and Thomson calls it “Facebook for the practice.” The software acts like a more robust version of a companywide intranet (which is also an option for groups seeking to bolster their internal communications). “The principle here is based on the hierarchy of needs,” Simile notes. “When your staff members have comfort in being able to access the information they need easily, then they can focus on the needs of the group.” Thomson and Simile have identified key features of particular use to medical groups and their members: access to CME information, quick polling and surveys, and a library for documents requiring shareholder review. “Let us say everyone at the board meeting agrees to review a certain policy,” Simile says. “You can put the document in a library, and then they check it out, make their comments, and check it back in; for those who have not done it, you can send out reminder emails.” In addition to these features, the platform also includes workflow tools and date alerts. However a group chooses to bolster communication and information sharing, Thomson and Simile stress their importance to creating an ongoing sense of unity in pursuing WIGs. “The more information you can get out there, the more they can answer their own questions, so when they come to a meeting, they are better prepared,” Simile says. “They do not have to spend a lot of time wondering or making decisions based on inaccurate information.” By focusing on these three basic processes, practices can begin to renew their commitment to proven business principles. “A lot of times, radiology groups try to fast-track the methodology of good business practice,” Simile says. “The simplest issues have a tremendous amount of knowledge, background, and complexity to them. In most cases, issues are more complex than people realize. We want to make sure there’s a methodology behind every decision a practice makes.” Cat Vasko is editor of ImagingBiz.com and associate editor of Radiology Business Journal.