Business Planning Essentials

Core Elements of Business Planning1. Environmental Assessment 2. Strategies/Tactics for Growth3. Volume Projections4. Staffing and Other Resource

Needs5. Financial Analysis

1. Environmental Assessment

Internal Environment

National Trends

Local & Regional Environm

ent

Internal Environment

VolumePatient OriginReferring ProvidersPayor MixFinancial PerformanceStaffingDownstream

Local and Regional Environment

Market Size and GrowthPrimary Competitors

◦Volume ◦Physician/Educator Supply◦Payor Mix◦Service Offerings

Market SharePayor/Reimbursement Trends

• Growth of healthcare costs• Healthcare reform• Increasing demand for services• Reduced escalation in payment levels• Increased focus on clinical outcomes • Inpatient Outpatient• Provider consolidation & service regionalization

National Trends

SWOT Analysis

Strengths- Internal- Resources and capabilities that can be used in developing a competitive advantage

Weaknesses- Internal- Characteristics about your clinic that place it at a disadvantage relative to competitors

Opportunities- External- Elements in the environment that create potential for growth

Threats- External- Elements in the environment that could create problems

2. Strategies/Tactics for Growth

Strategies and Tactics for Growth

Techn-ology

Patient Origin

National Trends

Compe-titors

Regula-tions

Payor Mix

Financial Perfor-mance

Referring Providers

Local & Regional Trends

3. Volume Projections

Should build on:◦Environmental Analysis What is the demand? What is the projected incidence in the community?

Impact of regulations Impact of competitors

◦Clinician capacity

Supply vs. Demand Example

Population in Service Area 2,242,988

Prevalence Rate of Diabetes 8.3%

Portion of Patients Requiring an Endocrinologist 10%

Population Requiring an Endocrinologist

18,617

Number of Endocrinologists in Service Area 5

Number of Patients per Endocrinologist 2,500

Unmet Need 6,117

Incremental Endocrinologists Required 2.45

4. Staffing & Other Resource NeedsResulting from:

◦ Increased Volume◦Changes in Practice Models◦New Technology

May Include:◦Physicians◦Nurse Practitioners◦Educators◦Support staff◦Equipment◦Space

5. Financial AnalysisRevenue generated from incremental:◦Clinic visits◦Educations visits

Costs associated with incremental:◦Physicians◦Support staff◦Equipment