Today, building a medical practice for local customers is harder than ever. Combining elements of medical tourism into the mix is creating frustration, confusion, and many dilemmas for physicians and medical centers around the world.
Many specialists are facing a crowded marketplace as competition for local and international medical services are growing rapidly. For medical centers, establishing a local presence and affiliations with local third-party payers is no longer enough to establish a strong referral patient base which is loyal.
Whether you are a physician or medical center with years of experience, or a new medical practitioner just starting, you will face new challenges which healthcare businesses have not experienced before. Despite all these, the rewards of practicing medicine in a private setting are enormous – from saving lives, to innovation, and financial benefits.
Physicians and Medical Centers today must take an entrepreneurial approach in practicing management, such as building a resilient patient base (which is sustainable using innovative business practices) and engaging with patients on a continuous basis thru education.
However, lack of such efforts will result to irrelevance in the international and local industry. To prevent such, here are proven techniques (that are successful in other industries) which medical practitioners and hospital managers can use to survive and evolve in the global healthcare industry.
First, a medical practice must think how to compete in a very crowded marketplace. Questions that should be considered are the following:
- How will you differentiate your practice? What’s unique about your practice?
- How will you remain to get patient referrals? What are new sources of generating sustainable customer base?
- How would you transform and re-think of patient-centric facilities which offer convenience and patient-friendly processes?
- What technologies are you going to use to improve ongoing patient interaction such as mobile apps, Electronic Health Record (EHR), and other patient portals?
- What is your business plan to help evolve the business over the years? Will the strategy remain the same year after year? Will you bring new elements in the business which will help you grow consistently?
Here are five (5) effective ways to help sustain your medical practice, you must consider them to create a global healthcare business.
1) Revenue Model:
Understanding your revenue model is critical to establish your presence in the marketplace. The financial model should elaborate facility delivery costs, which includes: labor and doctor’s salaries, overhead, per patient variable costs, facilities costs, marketing and sales costs, among other costing elements. The critical reason is that it will give you perspective on how to price your services accurately. As the industry effectiveness grows, price is becoming a main aspect which drives consumer purchasing behavior. Having an impeccable financial model will result in optimizing costs, and refining pricing from market demand perspective.
Many doctors and hospitals compare their prices with American counterparts in the medical tourism industry but do not compare prices among peers in the same country or region they are in (which are their true competition.) As a result, such comparisons gives false hope of what price point should be versus “what I should charge” in the marketplace.
2) Customer Acquisition Model:
The medical practice should not rely on hopes of building a business around international patients as this focus has proven to fail. This is because the realities of medical tourism are not very well understood. Based on a significant industry research, 80-90% of the business should be generated from local/regional customers and only 10-20% reliance on international business. Any other industries besides locally-driven businesses also help in a diversification strategy that will contribute towards long-term business sustainability.
3) Employee Development/Customer Service:
The medical practice is never a one-person job! It needs to follow some basic business fundamental functions such as clinical staff, sales & marketing, administrative staff, business management among others. For a starting medical practice, either these functions can be combined in general or outsourced to others who have core expertise in managing such functions.
Moreover, a sustainable medical practice would require attention in all aspects of the business, as this will establish whether the medical practice can survive for long-term, considering increasing rivalry at local, regional or global level. Continuing training and development for each function is also extremely essential as the market dynamics are changing rapidly.
4) Process Efficiency:
Whether you market with a domestic or an international patient, it is critical that the process will lead towards patient care and overall satisfaction, acquisition; elimination of waste, reduction in general cost of delivering services and most of all, better boundaries which will contribute towards business profitability. To survive each streamlined process will not only improve the customer experience but will give a financial competitive advantage that will create a sustainable business.
5) Continuous Innovation:
Last but not least, critical thinking and continuous innovation is a very critical element of the equation. By having international relations with industry leaders will help in implementing the latest advancements in medical techniques, processes, and marketing strategies to improve customer communications as well as providing the best to your customer base.
By adopting these basic innovative business solutions, a medical practice will not only survive the high competition but also strive. Below are identified initiatives that could help a doctor’s medical practice.
- Create more proceeds and profitability
- Improve productivity
- Improve cash flow
- Constructing real customer centric processes to create a better patient experience
- Generate new revenue – new services
- Enhanced competitive business strategy and marketing channels
In today’s economy, running a successful local medical practice, one must understand the best practices, innovations, as well as opportunities that may exist now or in the near future. For this understanding, the local and global competition may bring additional perspectives which may not be readily available in today’s local market. Additional recognition as well as income from a diversified portfolio is a critical element of any business expansion strategy.