Opening a new practice location can help your organization stay competitive, increase revenue and build your reputation. But how do you know whether it’s the right time to expand? And once you’ve decided to add a new location, what steps can you take to increase the likelihood of success?
To find out, I spoke with Laurie Morgan, who shared several easy-to-implement strategies practices should keep in mind when considering a new location. Laurie is a senior consultant and partner at Capko & Morgan who advises medical practices on operational excellence, revenue capture and the effective use of technology.
Maureen: Laurie, what are some of the factors practices should consider when deciding whether to expand to a new location?
Laurie: There are many things to consider when evaluating a potential expansion location, but I think the first is the unmet demand in that market. Even if the location is otherwise a great fit—say, for example, it’s a high-pollen area and you’re an allergy practice, or a family-friendly community and you’re a pediatric practice—if the market is already saturated with your specialty, it could be difficult to quickly attract referrals and build a new patient base.
If you’re hoping to expand to a nearby market for strategic reasons, such as to build your practice into a regional organization, one way around the saturation problem could be to acquire an existing practice in your target area. Acquisitions can be much trickier than building a new location, though, so careful due diligence and planning are a must before making a move.
And if you’re looking to add physicians or build a practice in a market rather than buy an existing practice, thinking about how you’ll begin to build before moving forward is essential. For example, you may decide that one of your current physicians could work part-time in the new location until the business builds, if you want to move conservatively.
Maureen: Once practices make the decision to open a new location, are there first steps that you usually recommend?
Laurie: Planning and analysis are key. People often joke that business plans just end up in a drawer, never read again after they’re written. That is often true, but that doesn’t mean that they have no value. On the contrary, the process of creating a business plan is an opportunity to think through all of the steps and potential obstacles you’ll encounter in your expansion. Plus, if you included tools like timelines and financial projections in your planning, these can be very useful for evaluating your progress. And all that thinking you did in writing your plan will help you know how to respond if your launch or acquisition projections aren’t materializing as expected.
Besides milestones and a financial model, some key elements your plan must include are a technology plan and a very detailed marketing plan. Whether you’re acquiring an existing practice or building out a new location, knowing how you’ll get your entire organization connected through technology before you start will save a lot of headaches and unnecessary delays. And a marketing plan is absolutely crucial to get your new launch or re-branding of your acquisition off to a strong start.
Maureen: How do practices maintain the patient experience across different sites?
Laurie: There are many things practices can do to maintain the same patient experience as they expand. Training all staff in all locations to follow the same policies and procedures is an important step. Consistency across all administrative processes—scheduling, billing, etc.—will help patients feel that they’re dealing with one organization, even when you have several locations. And, of course, maintaining consistency in branding elements like colors and logos helps communicate that you’re one organization. Even small things like similar scrubs and name tags are noticeable to patients.
When building out a new location, having a plan for on-boarding staff and physicians will help ensure that everyone shares the same expectations and foster a common culture. This is harder when acquiring a practice that is already established—another reason why planning and due diligence are so important to the success of any acquisition.
Maureen: What about practices’ reputation and brand? How do you recommend they preserve those as they grow?
Laurie: Reputation is more important than ever today, partly because it’s so much easier for patients to read other patients’ opinions about their doctors online. The most important step to preserving your reputation is to understand how patients feel about your physicians and your practice. That comes from monitoring online reviews and ratings as well as surveying patients yourself. When acquiring a practice or even bringing on new physicians to staff an expansion location, online reviews can tell you a lot about an existing practice and patient expectations in a new market.
Make sure that if any of your practices or physicians are relocating, you have control over all of your online listings—you’d be surprised what a devastating effect something as simple and easily avoided as an incorrect online address or phone number can have on your brand.
Maureen: What role does technology play, particularly when it comes to standardizing processes?
Laurie: Modern practice management (PM) and electronic medical/health records (EHR) platforms can be a huge asset in making your expanded practice more efficient and standardized. For example, an integrated PM and EHR makes it easy for your entire organization to use one centrally located billing or scheduling department, since information can be shared easily and instantaneously. Technology can also help you consistently evaluate the revenue cycle and scheduling performance all of your locations, using the same metrics—helping to ensure your physicians’ faith in the fairness of your evaluation and compensation systems. These systems also often have messaging and task-sharing tools that allow staff to communicate with each other more efficiently, regardless of whether they’re located in the next cubicle or in the next state.
Technology can also help to standardize the patient experience and make it more convenient for patients as you grow. For example, a payment portal that patients can access from a link in an email statement makes it easy for patients to pay; you can brand the portal so that every patient has the same experience, regardless of which office they visited. Check-in tools that allow patients to pay bills and provide their history and complaint details discreetly can also help make each of your offices more efficient while also giving patients the experience they want.
** For more insights from Laurie Morgan, register for our May 31 webinar,“Scaling Up: Creating a Platform for Growth.”