You can’t pick up a newspaper or journal these days without seeing frightening macro trends and legislation impacting the healthcare industry. No one is unaware of the challenges, although it’s those who are charged with providing patient care while keeping the doors open that are losing sleep.
If you’re in charge of making decisions for the financial well-being of a healthcare organization, where do you start? You probably know you need to develop long-term strategies to proactively address trends such as “retail-ization�? and payor reform, right?
Well, yes… but think smaller.
You probably read SHSMD’s Bridging Worlds: The Future Role of the Healthcare Strategist on how to address changes in the industry and agreed that one thing we need to do is to “generate data-driven insight.�? And, lucky you, healthcare organizations have TONS of data and research! For example, you could look at the trends in your financial data to determine where your growth is coming from and focus more resources there. How’s that?
Getting closer, but not there yet. Think even smaller. Think about your local healthcare consumers. Sue, Tom, Betsy, and Dwayne. They ultimately drive the success of your organization, right?
How do patients decide whether to come to you or a competitor? Knowing how your customers make decisions is the secret sauce when it comes to devising a strategy to improve profitability. If we understand it, we can influence it.
At the core of every challenge you face is one of your customers making a decision. Declining revenue? Think about why your most profitable patients are choosing to go elsewhere. Why are physicians choosing to not refer to you? Why are patients choosing to not follow-through on their discharge instructions and therefore being readmitted for costly services? It all comes down to choice.
Break your challenges down to the level of a consumer choice and dig in. What factors do they weigh when making a choice and how do they think you perform? When you have insights at this level, you have your marching orders – taken directly from the mouths of your local customers. The people that provide your revenue.
So, what if this isn’t what your team is doing today? Well, they’re not unusual, but it needs to change. It’s natural for us to have an “inside-out�? perspective when making decisions. We think in terms of service lines, units, discharges, etc. But we need an “outside-in�? perspective to drive strategy - starting with the customers' needs and wants.
After all, patients are why we do what we do. It’s what connects everything, so why wouldn’t they inform our strategy? In the midst of government debates and national trends, we can’t lose sight of this. At its heart, healthcare is local. Healthcare is small. And when we focus at this level, it suddenly seems more manageable.
If you’re in a leadership role, you’re probably a visionary – an idea person, and that’s a good thing. It goes with the territory. “Thinking small�? doesn’t sound very sexy, but you have to fight the right battles with your limited resources. Viewing the competitive landscape from your patient’s eyes and understanding what matters to THEM helps you pick the right fights and win.
5 Steps to Thinking Small
- Break it down. Take your large organizational problem and do the Lean Six Sigma “5 Why�? exercise.=
- Our revenue is declining. Why?
- Our biggest revenue driver, our outpatient surgery center, is seeing a declining number of surgeries. Why?
- We’re losing patients to a local competitor. Why?
- Our physicians are referring to them instead of us. Why?
- Hmmm. Good question. We need to learn what is factoring into the physician’s decision to refer and where we can improve. We also need to understand the patient perspective.
- Brainstorm internally. What do you think is important to physicians when deciding to refer patients to you or a competitor? Are these same things important to patients or do other factors impact their decision making? How do you think you do vs. your competitor on these factors?
- Gather customer feedback. Want to know what physicians and patients think? Ask them. This isn’t about trying to sell them on what you do best. This is just about you learning and listening.
- Compare. What did you get right? What did you assume incorrectly? The gap between the two views provides insight into how much your team will need to shift thinking to succeed.
- Act. How can you build upon your strengths? How can you neutralize a competitor’s strength? Are there things you are doing now that you can stop doing because they aren’t as important as you thought? Use customer insights to drive your strategy. Fight the good fight and win!
To learn more about what factors patients analyze when choosing you or a competitor, see the Inside the Mind of the Healthcare Consumer webinar.