Strategy and Implementation of Practice Office Expansion

Business Plan submission

Margaret Dalton, FACMPE

July 20, 2018

This paper is being submitted in partial fulfillment of the requirements of Fellowship in

the American College of Medical Practice Executives.

2  

Table of Contents Project Summary ........................................................................................................................... 3 

Executive Summary ....................................................................................................................... 4 

Company Overview ..................................................................................................................... 4 

Market Opportunity ..................................................................................................................... 4 

Capital Requirements & Acquisition ........................................................................................... 5 

Management ................................................................................................................................. 5 

Competitors .................................................................................................................................. 5 

Competitive Advantage ............................................................................................................... 5 

Mission Statement ........................................................................................................................ 6 

Income Statement Projections (3 years) ....................................................................................... 7 

The Organizational Plan ............................................................................................................... 8 

SWOT Analysis ........................................................................................................................... 8 

Strategy ........................................................................................................................................... 9 

Space Needs ................................................................................................................................. 9 

Real Estate Options ...................................................................................................................... 9 

Financial Considerations ............................................................................................................ 10 

Increasing Patient Care Revenue ............................................................................................... 13 

Managing the Construction Project............................................................................................ 13 

Project Timelines ....................................................................................................................... 13 

Managing the Relocation ........................................................................................................... 14 

Marketing ..................................................................................................................................... 15 

Goals .......................................................................................................................................... 15 

Target Audience ......................................................................................................................... 16 

Competition ............................................................................................................................... 16 

Market Trends ............................................................................................................................ 17 

Market Research ........................................................................................................................ 17 

Method ....................................................................................................................................... 17 

Marketing Budget ...................................................................................................................... 18 

Conclusion .................................................................................................................................. 189 

3  

Project Summary

According the American Academy of Dermatology, it is estimated that approximately 9,500

people in the United States are diagnosed with skin cancer every day. Based on the Health of

America Report published by Blue Cross Blue Shield, the state of Massachusetts’s rate of

diagnosis is 5 percent, which ranks sixth highest in the country.

The two most common types of skin cancer are basal cell carcinoma and squamous cell

carcinoma. Mohs micrographic surgery is considered the most effective technique for treating

both types of skin cancers. The Mohs procedure involves surgically removing skin cancer layer

by layer and examining the tissue under a microscope until healthy, cancer-free tissue around the

tumor is reached (called clear margins). The procedure is done in-office in stages while the

patient waits, and the entire procedure is completed during one office visit. Patients are typically

in the office for four to six hours on average.

Due to the increase of skin cancer diagnoses, this practice, if well positioned, can achieve an

increased number of patients by improving the overall patient experience. The practice will need

additional patient care space to accomplish an increase. Additionally, the increasing number of

American College of Mohs Surgery (ACMS) fellowship training positions over the last decade

has resulted in a greater number of fellowship-trained surgeons available and joining local

referring dermatology practices. This results in patients having more choice when selecting a

surgical practice. In order to be competitive, this practice needs to deliver the best cosmetic

results while ensuring the highest level of patient satisfaction. This can best be achieved through

convenient practice locations which are purposefully designed as patient-focused environments.

This practice has decided to expand its office and surgical space with patient-centered comfort as

a major component of this space planning initiative and will include architectural attributes to

improve overall experience and satisfaction. Patient waiting is a major quality survey component

that is measured routinely in the practice. Patients consistently report a need to improve their

surgical waiting experience which cannot be done in the current space. The goal of the space

planning initiative is to increase visit numbers and provide improved patient comfort while

successfully meeting the financial challenges of the plan.

This business plan will enlighten the strategy and implementation of a successful medical practice

office relocation and re-launch process, taking into consideration timelines, budget, scheduling,

marketing, and other project milestones. The positive outcome of new space will demonstrate

improved patient satisfaction, increased utilization of staff and physicians with space efficiency,

greater schedule density, and increased revenue.

4  

Executive Summary

Company Overview

This is an eight-physician multispecialty private group practice consisting of dermatology,

dermatologic surgery and plastic surgery, including Mohs surgery for skin cancer treatment.

While the practice has enjoyed significant growth and expansion over its 10-year history, it has

identified challenges related to maintaining market share. The practice currently operates in four

locations serving patients from eight hospital network systems. The practice is unique in that a

large majority of patients are referred for skin cancer affecting anatomically challenging surgical

areas of their head, face, and neck. The practice is well-known and well-respected in the

community for its attention to a patient-centered care culture and excellent surgical outcomes.

New and improved clinical space is critical to maintaining current patient volume, promoting

future growth, and to further expand the mission of the practice. Being a small to medium-sized

private practice, capital resources are limited, so thoughtful planning and budgeting are essential.

Market Opportunity

With the development of new clinical space, an opportunity exists to increase patient visits by

allowing for additional patient care sessions in more efficient space and to improve patient appeal

via their experience. The current office contains only three exam/procedure rooms and two

consult rooms. The clinical space can only properly handle one physician seeing patients per

session. This limits a physician who practices in this location from increasing their productivity.

The exam/procedure rooms are small at approximately 110 square feet each and the consult

rooms can only be used for non-procedure visits. There is one small waiting room where patients

who are having surgery will wait between their stages of Mohs surgery.

To improve visit efficiency and patient comfort, and capitalize on market opportunity, the

practice plans on adding additional office locations to strategically improve patient reach and

convenience. When planning these new spaces, special focus will be placed on achieving larger

exam/procedure and consult rooms as well as additional waiting spaces, including comfortable

private waiting rooms to accommodate patients currently undergoing treatment. This will allow

the practice to accommodate more patients and allow more than one of the practice’s physicians

to see patients at the same time and location. With the additional space, an opportunity exists to

offer a variety of new services such as laser, medical esthetician and additional cosmetic services.

Through superior patient experience, the practice feels it can capture a larger segment of the

existing market. There is additional opportunity via new demand driven by anticipated metro-

area population growth and increasing rates of skin cancer.

5  

Capital Requirements & Acquisition

The associated capital budget requirements have been determined by a calculation of income to

debt ratio and personally guaranteed by the physician owners and is a fixed amount that will be

carefully spent throughout this project. The components of the budget include the purchase of

new property and closing costs by the real estate LLC. Renovation cost (fit-up) and an equipment

loan is the responsibility of the practice. The fit-up loan is a construction mortgage and is

amortized over 20 years at 4.5 percent interest payable in monthly installments of principle and

interest. The loan for the new equipment is a short term loan amortized over a 5-year term at 4.5

percent interest payable in monthly installments of principle and interest.

Management

The practice is managed by a Board of Physician Directors, an Administrator, a Practice

Manager, a Chief Financial Officer, and Laboratory and Nursing management. This group of

highly skilled individuals collaborate on practice related projects and issues. Their input on every

aspect of this space planning proposal is essential to its success. The Administrator will serve as

the project manager for the entire project, having managed over twenty million dollars in prior

medical practice construction projects. The CFO will oversee all financial aspects of this project

and has over twenty years’ experience in a previous position in a construction management

accounting office. The Practice Manager’s expertise in the development of new workflows will

be essential for a smooth transition to new space. The Laboratory Manager will ensure that new

laboratory space meets all regulatory compliance rules of the Commonwealth of Massachusetts.

The Nurse Manager will ensure that the clinical space accommodates all supplies and equipment

necessary for patient care as well as being patient-ready on opening day.

Competitors

The practice faces competition from an increasing number of Mohs surgeons within a saturated

dermatology region. There are approximately six competing dermatology offices attached to

practices that offer Mohs surgery within a reasonable distance from the practice’s location, two of

which opened within the last 18 months. This gives patients seeking treatment more options in a

market where the practice previously dominated.

Competitive Advantage

This particular patient care office is associated with four hospital-based physician organizations.

The practice’s physicians are well-respected within these organizations and continually

demonstrate their commitment to patient experience and outcome. These engagements increase

the patient pipeline of referrals from other trusted practices and physicians. This level of trust and

engagement presents a unique competitive advantage that the practice works hard to foster.

6  

The practice routinely produces best-in-region cosmetic outcomes as measured by regular patient

surveys with highly rated results. The practice has determined through additional focused patient

surveys that most existing patient dissatisfaction comes from inadequate waiting space. With this

proposed project, the practice is acting to bring the patient experience in line with superior

surgical outcomes to create an increased competitive advantage. The practice has a willingness

and financial standing to create improved practice locations and services to meet these goals. The

practice has a well-structured management team and highly skilled physicians who are invested in

the future of the practice.

Mission Statement

“We care about our all our patients and focus on their dermatological needs from skin health and

skin cancer treatment to cosmetic procedures. Our group of physicians, and skilled staff, aim to

treat and address all skin related conditions with surgery, medicines, and an extra personal touch.

We strive to deliver exceptional care using the latest technology and innovation. We rely heavily

on our staff and employees ensuring they are well-trained and have a high level of staff

satisfaction. Our physicians are compassionate, trained in the latest medical and surgical

techniques, electronically sophisticated and able to communicate with patients in a confidential

manner using our electronic patient portal. Our practice values patient privacy and meets or

exceeds all HIPAA guidelines. As a patient of our practice, you can expect that we will work with

your primary care physician and other members of your health care team to manage your

wellbeing and progress.”

7  

Income Statement Projections (3 years) Table 1

Expense Description - Office 1 Year 1 Year 2 Year 3

Professional Receipts:

Physician Receipts $1,500,000 $1,778,400 $1,917,600

Occupancy Expenses:

Rent $41,700 $60,000 $72,000

Condo Fees $5,367 $15,572 $15,576

Utilities $10,104 $16,140 $16,624

Amortization - Leasehold Improvements $ - $16,800 $16,800

Depreciation Furniture, Fixtures and Equipment $ - $34,800 $29,500

Property Taxes $7,200 $8,400 $8,652

General Maintenance Expenses $9,600 $9,600 $9,600

Security Monitoring $360 $540 $540

Cleaning General $10,380 $13,140 $13,140

Office Expenses

Postage Expense $4,200 $4,620 $5,082

Office Supplies & Expenses $20,000 $22,000 $24,200

Preprinted Forms - Stationary $500 $550 $605

Biohazard Waste Removal $1,800 $1,980 $2,178

Support Staff Recruitment $1,200 $1,320 $1,452

Employees Meals/Functions $1,200 $1,320 $1,452

Uniform Expenses $500 $550 $605

Advertising Expenses $5,000 $5,500 $6,050

Promotional Expenses $2,000 $2,200 $2,420

Outside Marketing Consultant $2,000 $2,200 $2,420

Marketing Expenses $4,000 $4,400 $4,840

Cable/Internet $3,000 $3,300 $3,630

Web Hosting Expenses $3,000 $3,300 $3,630

IT Consulting Services $9,000 $9,900 $10,890

Equipment Repair $4,000 $4,400 $4,840

Lab Expenses $5,000 $5,500 $6,050

Office Telephones $8,000 $8,800 $9,680

Medical Supplies $80,000 $88,000 $96,800

Minor Medical Equipment $1,000 $1,100 $1,210

Linen Expense $8,000 $8,800 $9,680

Staffing Costs

Staff Salaries $270,000 $297,000 $326,700

Staff Benefits $64,800 $71,280 $78,408

PR Taxes-FICA, FUTA, SUTA $24,000 $26,400 $29,040

TOTAL EXPENSES $606,911 $749,412 $814,294

Physician(s) Distribution $850,000 $975,000 $1,050,000

Capital Reserves $43,089 $53,988 $53,306

Profit/Loss $0 $0 $0

8  

The Organizational Plan

The practice provides a much-needed service of surgical dermatology to remove skin cancer. The

mission with this endeavor is to improve and increase the size of the clinical practice to enhance

the business footprint and to significantly improve the patient experience.

The short-term goals are to successfully manage this project and to ensure a smooth expansion on

time and within budget. Long term goals are to fully utilize the new space with additional

physicians and patients; to strengthen patient, staff and physician satisfaction; and to increase the

practice’s reputation and market share.

SWOT Analysis

The Board of Directors who are the key stakeholders are responsible for reviewing and approving

this proposal and project expenditures as presented by the administrator and CFO in collaboration

with the loan institution and attorney. The Board of Directors and the management team will

review expenditures as incurred and make decisions regarding construction changes or financial

issues that may arise during the project.

Strengths Weaknesses

Highly skilled physicians Limited access to capital Strong management team Limited current clinical space Good patient outcomes

Entrepreneurial determination In house experience in managing

construction projects

Opportunities Threats

Emerging need for services Emerging competitors (more Mohs surgeons)

Room for growth in new space

9  

Organizational Chart

Strategy

Space Needs

The strategy of this business plan is to identify the practice needs for space enhancement,

including determining appropriate square footage needs, important space attributes, and special

space considerations such as parking and handicap accessibility. The current office lease is

expiring, and existing space is not adequate. It has been determined that more than 5,000 square

feet of clinical and business space is required for each location. It is desirable to have five

procedure rooms of approximately 150 square feet each. Procedure rooms at the practice’ s

current location are 110 square feet each. Through practice and physician experience at the other

office locations, it is determined that 150 square feet is the ideal space for patient and physician

comfort in addition to adequately housing all of the required equipment and supplies. The

practice also desires three examination rooms for consults, suture removals and follow up visits.

Waiting areas and additional spaces will include main waiting, private surgical waiting, snack

area, recreation area, handicap accessible restroom, reception check-in, private check-out, a

laboratory, clean storage, autoclave room, dirty room, physician and staff work rooms, triage

area, business area, three offices and adequate staff breakroom space.

Real Estate Options

Having identified space requirements, the practice investigated potential locations and discovered

an initial opportunity within the condominium association of a current practice office.

Board of Directors

Chief Administrator Employed Physicians

CFO - MGMT Team Practice Manager MGMT Team

Front Desk Staff Lab Staff All outside Vendor support (IT, phones) Human Resources Billing & Coding Marketing/Public

Relations

Clinical Staff

Lab Manager MGMT Team

Clinical Manager MGMT Team

10  

The potential office is 5,060 square feet and had previously housed a cardiology practice. A

thorough space review was completed to determine the feasibility of usage, architectural analysis,

and mechanical, electrical and structural analysis. This evaluation was necessary to determine

potential cost of purchase and renovation of the space. The cost of the unit along with

construction, equipment, and relocation costs must fall within the allotted project budget.

In the future, additional real estate opportunities may be identified to further enhance the

practice’s offices and patient experience and increase the practice’s geographic reach and revenue

potential. At that time, a new business plan(s) should be proposed with details for that project.

Financial Considerations

A projected purchase price for the property was obtained by using a private vendor to perform a

current market analysis of comparable medical practice condominium space in the area.

The next financial consideration is the cost of renovating the space for acceptable use. A

projected construction budget was established based on a thorough property evaluation and is

shown in Table 2.

Table 2 New Space Budget UNIT PRICE

DESCRIPTION BASE/$SF EXTENSION ESTIMATE Total Square Footage 5060 % of cost

$/SF

LABOR $5.16 7.28% 26,126.00 DEMOLITION & REMOVAL $3.16 4.46% 16,000.00 PAINTING $2.21 3.12% 11,200.00 FLOORING $6.52 9.19% 33,000.00 DRY WALL $1.58 2.23% 8,000.00 CEILING AND CEILING WORK $1.36 1.92% 6,892.00 FRONT DESK GLASS AND BAMBOO $0.79 1.11% 4,000.00 ELECTRICAL $9.86 13.90% 49,908.00 PLUMBING $4.74 6.69% 24,000.00 FIRE SYSTEM, EMERGENCY LIGHTING $0.99 1.39% 5,000.00 SOUND SYSTEM AND NURSE CALL SYSTEM $2.62 3.70% 13,263.00 CASEWORK/MILLWORK $9.88 13.93% 50,000.00 INSURANCE $0.59 0.84% 3,000.00 CONTRACTORS FEE $7.73 10.89% 39,090.00 GENERAL CONDITIONS $2.96 4.18% 15,000.00 HARDWARE $0.99 1.39% 5,000.00 MATERIALS $0.59 0.84% 3,000.00 HVAC - (replace existing units) $3.95 5.57% 20,006.00 PLUMBING Upgrade $0.79 1.11% 4,000.00 PERMIT $0.42 0.60% 2,148.55 DESIGN FEES $0.63 0.89% 3,200.00 CONTINGENCY - 5% $3.38 4.76% 17,092.00 TOTAL $70.93 100.00% 358,925.55

11  

Based upon these initial findings, the required capital budget is $1,300,000 (Table 3).

Table 3 Capital Budget Estimated Cost Purchase Price $725,000.00 Purchased by the real estate LLC

Fees & Prepaids $27,035.00 Cost to real estate LLC

Renovation $358,925.55 Cost to the practice

Equipment and Furniture $148,039.45 Cost to the practice

Start-up

Marketing $16,000.00 Cost to the practice

Moving $5,000.00 Cost to the practice

Miscellaneous expenses $20,000.00 Cost to the practice

Total Proposed Costs $1,300,000.00

For clarification purposes, the physical real estate property will be held in a separate real estate

LLC and the practice will pay current market value rent to the LLC. To determine fair market

rent value, an analysis will be requested from a local commercial real estate company. Property

taxes are paid by the real estate LLC through the escrow. The table 1 income statement is not a

combined statement.

This proposed budget and plan must be reviewed and approved by the Board of Directors. The

purchase price of the property and the projected cost of renovation must also be evaluated by the

practice’s lender of choice through a comprehensive appraisal analysis. The cost of the building

plus renovation expense must meet the appraisal value of the property once work is complete.

The projected cost to equip the practice with furniture, fixtures and clinical equipment is

estimated at $148,035.95 (Table 4).

12  

Table 4

Equipment, Fixtures, Furniture 4 Power Exam Tables Base (641) 39,220.00 4 Exam Table Top (641) 3,560.00 5 Mayo Stands 525.00 8 Cautery Units 15,600.00 4 Stand, For Cautery 876.00 4 Power Exam Tables Base (230) 30,419.96 4 Exam Table Top (230) 2,600.00 4 Control, Foot (230) 1,180.00 4 Headrest (230) 1,380.00 2 Arm board 2,290.00 4 Exam Stools 636.00 5 Surgical Lights 11,375.00 8 Eye Wash Fountain, Sink Mount 760.00

10 Cabinet, Sharps Lock Wall 5qt 290.00

1 Blanket Warmer 1,000.00

4 Clean Room Storage Units 2,500.00

Waiting and Business Office Furniture 33,827.49

Total FF&E Budget 148,039.45         

Although the mortgage, renovation, and equipment loans will be amortized expenses, the burden

of a new mortgage and associated costs as well as increased occupancy expenses will be new

expenses to the practice that will need to be offset by an increase in revenue. The services that

will be increased are Mohs procedures, excisions, plastic surgery visits and new cosmetic services

options. Table 5 illustrates an estimate of how the practice’s occupancy expenses will change

based on this proposed move.

Table 5

Monthly Occupancy Expense

Old

Space New Space Variance Increase

Buildout Loan 0.00 1,400.00 1,400.00

Equipment Loan 0.00 1,300.00 1,300.00

Condo Fee 447.27 1,297.67 850.40

Rent 3,475.00 5,000.00 1,525.00 Paid to the real estate LLC

Cleaning 865.00 1,095.00 230.00

Utilities 842.00 1,345.00 503.00

Security 300.00 450.00 150.00

Total Occupancy 5,929.27 11,887.67 5,958.40

13  

Increasing Patient Care Revenue

As documented in the three-year income statement, the practice will need to generate new income

to cover the cost of the new rent, occupancy expenses, and associated costs related to increased

patient visits. A goal has been set to increase Mohs procedures, office excisions, new patient

consults and new cosmetic service offerings over the ensuing two years and will be easily

accomplished with the availability of additional space and session times. Detailed marketing

plans are outlined in the Marketing section below.

Managing the Construction Project

To ensure that construction costs do not exceed the predicted budget, close monitoring of

construction activity is essential. The timeline for the project, once construction commences, is

24 weeks. The construction schedule (Table 6) and adherence to it will be managed by a

collaborative relationship between the administrator of the practice and the construction manager.

Delays would affect individual construction vendors, porting over existing telephone and

computer services, patient and physician schedules, pre-determined move schedules, etc.

Project Timelines Construction Schedule Table 6

14  

The construction schedule from start to finish is anticipated to take approximately six months.

Start date is contingent upon final acquisition of space and awarding construction contracts. This

process is anticipated to take one additional month, resulting in a total project timeline projection

of seven months. The primary challenges presented by this proposal include time requirements of

managing both a construction project and the practice, securing appropriate contractors within

timeline and budget, and ensuring that the overall project stays in budget. An important tool in

managing the construction budget is a detailed line item estimate and the creation of a

contingency budget to offset unknown costs and conditions. This detailed estimate is updated

continually as the design progresses, contracts are awarded, and construction occurs.

Managing the Relocation

The date and time for the physical relocation will coincide with the acquisition of the certificate

of occupancy and installation of the data lines necessary to operate phones and computers. This

date will be pre-negotiated with the construction manager as to enforce a set timeline that is

acceptable to both parties. A final review and acceptance task list will be documented by the

Administrator, reviewed with the construction manager and completed prior to the move. A

weekend move is strongly recommended to avoid practice down-time and prevent negative

patient and revenue impact.

The scheduling and relocating of the computers, printers and fax/copier/scanners will be done to

avoid any down-time for physicians and staff and will be done at the end of business on the

Friday of the move weekend. Functional telephone and fax service must overlap between the

spaces during transition to ensure continuity of service. This is critical to ensure that the

practice’s ability to receive and answer patient service calls via the voice over IP system is not

interrupted.

The alarm company must ensure that an alarm system is in place once the certificate of

occupancy is issued.

The utility companies will be notified of the move date to coordinate transition of electricity,

water and gas.

Determining what furnishings will be relocated to the new space is the responsibility of the

administrative team. A list will be published that will be shared with all staff and the moving

team. A moving company will be secured for the pre-negotiated move date.

A professional cleaning crew will be hired for post construction and prior go-live cleaning. This

will be done prior to, during, and after the physical move to ensure a clean environment prior to

15  

receiving patients at the new location. This cost has been included in the initial budget

projections.

A paid overtime staff schedule will be offered to all staff for voluntary participation in a weekend

move. Post move, staff will be responsible for ensuring that all nursing and examination rooms

are clean, stocked and patient ready. This cost has been included in the initial budget projections.

It is recommended that a professional carpenter or “handyman" be hired to assist the staff during

the move. This professional will assist in tasks such as the installation of window treatments,

sharps containers, chart holders, lockers, artwork, glove holders, paper towel dispensers, cork

boards, magazine holders, wall pockets, and eye-wash stations. This cost has been included in

the initial budget projections.

The practice’s biotechnical company will be scheduled to inspect and calibrate all equipment

prior to use following the physical move. This must be completed prior to patient go-live. This

cost has been included in the initial budget projections.

All approved signage should be installed both within the practice and on the outside building

prior to go-live. This is noted in the marketing section of this business plan and has been

included as a line item of the marketing budget.

All patients will receive a personal phone call and an automated reminder call with the new

location information prior to their next scheduled appointment to avoid confusion and a negative

patient experience.

Marketing

The ability to better serve patients is a key impetus for this proposed relocation. As such,

marketing and outreach should start in tandem with construction to ensure ample time for

promotion. The marketing plan should be comprehensive to reach desired audiences, in line with

the practice’s current branding and within the allocated budget.

Goals

There are four primary goals of marketing the practice’s new office:

Promote the move as a major event with many benefits for the local community (i.e. better patient care, ability to treat more patients, etc.)

Highlight the practice’s focus on patient care and comfort as a differentiator Promotion and brand awareness building of the practice and its superior patient outcomes Maintain consistent brand standards when outfitting the new office with signage and

promotional materials

16  

Target Audience

Properly marketing the new office to existing and new potential patients as well as to local

referring practices is vital as all segments are critical to sustaining and growing the practice’s

patient base and visit numbers. The following breakdown details the primary goals of marketing

for each key audience segment.

Existing Patients Maintain consistent patient base Minimize confusion regarding new office

location Promote patient-focused benefits of the office

design Emphasize how the new location will help the

practice further improve positive patient outcomes

New Patients Promote awareness of the practice (physicians, services, outcomes, competitive differentiators)

Encourage new patient appointments Promote patient-focused design of new office

Referring Dermatologist (Existing and New)

Maintain existing referring dermatologist base Grow referring dermatologist network Promote awareness of the practice - its

physicians, services, patient outcomes, and competitive differentiators

Promote patient-focused design of new office for improved patient outcomes

Referring Primary Care Physicians (Existing and New) PCP = Primary Care Physician

Maintain existing referring PCP base Grow referring PCP network Promote awareness of the practice (physicians,

services, outcomes, competitive differentiators) Promote patient-focused design of new office for

improved patient outcomes

Marketing efforts for this project will include:

Announcing the upcoming move on waiting room posters Mailing “we have moved postcards” to all existing patients Mailing personal letters to all referring physicians and associated hospital networks Announcing the new location on Facebook, LinkedIn, Twitter, and the practice website Purchasing print advertisements in the local newspaper and community magazine Hosting an open house for patients, physicians and the local community upon move in

Competition

The competition will continue to be other Mohs surgeons in competing regional dermatology

practices, including the pre-identified six competing offices located within driving distance of the

practice’s location and any additional competing offices/practices that may open within the region

in the future. This project does not introduce any new competition to the practice.

17  

Market Trends

The practice continually monitors and adjusts to changing market trends to ensure maximized

reach, positive return on investment, and best use of marketing budget. Examples of this include

maintaining an active presence on the most popular and influential social media channels, printed

literature for distribution to referring physicians’ offices, and email marketing to patients. The

practice also monitors marketing efforts of similar practices and others in the general medical

field to maintain a competitive position within the region.

The practice will continue to follow these best practices when marketing the relocation.

Market Research

The practice will conduct internal patient and staff surveys as well as collect the most up-to-date

pertinent data from valued resources such as the Medical Group Management Association

(MGMA) and the American College of Mohs Surgery.

Method

Transparency and communication are important values of the practice. In keeping with these

values, the practice will send all existing patients and referring physicians written notification

announcing the new office and promoting the enhanced patient experience that the practice is

working hard to create. This letter communicates the practice’s excitement and express how the

change will benefit patients in the future.

Additional marketing includes promotion on the practice’s social media platforms. The practice

also investigates and uses any possible media coverage opportunities locally and within industry-

specific publications, budget allowing. These opportunities will promote the move, but primarily

focus on promoting the enhanced customer experience and benefits.

Internal-focused marketing efforts include purchasing on-brand signage for the new office and

updating outward-facing collateral such as business cards, practice stationary, the website, voice

over IP messaging and any additional locations where the office address is published. Upon

location opening, the practice will host an open house for patients, referring physicians and the

community. This will be part of the marketing budget (Table 7).

18  

Marketing Budget

Table 7 Marketing Budget is a start-up expense Signage We are moving signs for waiting room & post site sign $200 Interior suite signage $2,000 Outside Suite signage $2,500 Notification Mailing $2,000 Notification Letters to Vendors Notification Letters to Referring Physicians Notification postcard to existing patients

Notification letter to insurance companies and PHO/IPA offices Social Media $500 Updates and announcements Email announcements Facebook Boosting Update voice-over-IP system with new address $0 New Stationary and business forms $800 Open House $3,000 Miscellaneous Marketing Activities $5,000 Print AD Targeted Marketing

Marketing Total $16,000

The primary return on investment for marketing efforts will be measured by sustaining existing patient revenue. The goal of marketing is to also attract new patients, but this will not be tied directly to campaign ROI.

19  

Conclusion

Moving to a larger office presents many benefits for the practice, including allowing the practice

to increase patient visits and enhance patient comfort and care. As both patient demand and

competition in the area increases, the practice needs to take steps to maintain and elevate its

reputation and outcomes. Creating a new patient-focused office will enable the practice to further

differentiate itself from other local care options.

Due to current office limitations, the practice is near or at its revenue ceiling as more patients,

new services and appointments cannot easily be accommodated. Purposely designing the new

office to accommodate more simultaneous appointments will increase the practice’s revenue

ceiling and allow for further practice growth.

The next steps are for the practice’s Board of Directors to review the proposal and the

accompanying financial projections contained within. The Board should work with the practice’s

administrative team to address any questions and concerns. The availability of the identified real

estate opportunity used to create these project projections creates a time constraint, so this

proposal should be reviewed and approved in a timely manner.