July 1997 Bulletin

Repositioning may require new attitude

Orthopaedic group must meet payers' needs

by James S. Isom

James S. Isom is immediate past president of The BONES Society and executive vice president and chief executive officer, Orthopaedic Surgeons East, PC, Birmingham, Ala.

Since the inception of what has become known as "managed care," orthopaedic group practices have been advised repeatedly to position themselves to contend with a future in a restructured system. What does that mean and who is responsible for making it happen? Every group is different, therefore, the answer is different for each group.

Many orthopaedic surgeons are still in the state of "denial," especially in parts of the country where managed care is not yet a major factor. Therefore, the physician cannot take the lead in evaluating and providing vision for the group. Generally, the chief administrative officer is responsible for providing a strategic plan to the governing board of the group.

To position the group, a critical, in-depth evaluation must be made of the group's strengths and weaknesses. What is your marketing advantage? What assets do you bring to the medical community which other groups cannot or do not offer?

We were told during the recent series of seminars sponsored by the Academy that clinical expertise is no longer enough to maintain a market share. Every doctor seems to think he or she does the best job with the patients, but we cannot rely on good patient care as the only tool for success.

In assessing its current position, the group must determine the needs of the payers who contract for managed care, and if the group is able to meet those needs. It is imperative to be brutally honest in answering these questions. Some examples of questions that may be asked are:

  1. Do we have a diversity of well-trained subspecialists which will allow a payer to get a full range of services from our group?
  2. Do we cover the geographical area which they desire, so the payer can cover its desired market area with our group?
  3. Do we have privileges at one or more of the hospitals which they desire to use?
  4. Are our lengths of stay at acceptable levels?
  5. Can we schedule the patients to be seen in a timely manner?
  6. Are there long waits for the patients on the day of their appointment?
  7. Is the image of the group attractive to the public, therefore, making the group attractive to the payer?
  8. Is the group attractive to the referring physicians in the area? Do not assume that this answer is "yes."
  9. Does the group have adequate management to evaluate the group's status and to take the steps required to position the group for continued success?

After sufficient evaluation and strategic planning, the group must look for answers and action. There is no single answer that would apply to every group. Some orthopaedic groups may need to investigate and consider merging with another group or groups in the area. This has the tendency to reduce costs on a per doctor basis and make the larger, more diversified group more attractive to payers.

However, mergers, for various reasons, may not be the best solution. The group may consider opening satellite offices in different market areas in order to reach and increase the market available to the group. This can be accomplished by adding physicians or, in some cases, using the current physician staff on a part-time basis to provide services in the satellite clinics. This decision, however, must be carefully made because there are circumstances in which using a part-time physician will not work in a market area. This decision must be made after careful study.

Probably the most important message is that most of us are going to have to develop a new and entirely different attitude, state of mind and thought process. Much can be learned by observing other types of businesses which have been subject to economic pressures for many years.

A few years ago banks considered it unethical to advertise. There were few, if any, branch offices. Banks had large, magnificent buildings downtown with the president of the bank sitting in the back office very independent, very self-assured. However, competition and economic pressure changed all of that. Banks now have huge marketing and advertising budgets. There seems to be a branch office on every corner. They are going to the customer instead of forcing the customer to come to them. Mergers and buy-outs are taking place at an unbelievable pace. Some banks have not been able to adjust and are no longer in business.

Those orthopaedic surgeons who examine their position and aggressively pursue a strong strategic plan will not only survive, but perhaps even thrive.

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