Posts
Tuesday, September 22, 2009
Quotable
"Build your world around your dreams rather than trying to fit your dreams into the world you know." - Alan Cohen
Saturday, September 19, 2009
There's a Bend Up Ahead
Regardless of the outcome of the national health debate over the coming weeks, the fact is that financial realities demand that something change... e.g. Medicare running out of money by 2017 as just one example.
Is change coming? You bet it is! What it looks like is still up in the air but one thing is for sure - reimbursement will continue to erode and costs will continue to go up. Businesses will be pinched - healthcare providers and community employers.
There will be winners and losers. Those who are not productive and efficient will be the first to suffer. One need only look back to the Balanced Budget Act of 1998 and long term care sector to appreciate the scramble that was caused and the losses incurred by so many.
Was there recovery. Sure there was... for some but not for others. Business changed hands. Business that inefficient providers could no longer afford to do shifted to those providers who could do more for less and still make a profit. While some were going out of business others were taking the opportunity to grow theirs.
Times of change are times of opportunity for those who are prepared. Now is the time to be preparing. Those who are business savvy and prudent are doing just that - PREPARIING.
"A bend in the road is not the end of the road unless you fail to make the turn."
Do you have your hands on the wheel?
Bob
(c) copyright 2009
Performance Builders
Is change coming? You bet it is! What it looks like is still up in the air but one thing is for sure - reimbursement will continue to erode and costs will continue to go up. Businesses will be pinched - healthcare providers and community employers.
There will be winners and losers. Those who are not productive and efficient will be the first to suffer. One need only look back to the Balanced Budget Act of 1998 and long term care sector to appreciate the scramble that was caused and the losses incurred by so many.
Was there recovery. Sure there was... for some but not for others. Business changed hands. Business that inefficient providers could no longer afford to do shifted to those providers who could do more for less and still make a profit. While some were going out of business others were taking the opportunity to grow theirs.
Times of change are times of opportunity for those who are prepared. Now is the time to be preparing. Those who are business savvy and prudent are doing just that - PREPARIING.
"A bend in the road is not the end of the road unless you fail to make the turn."
Do you have your hands on the wheel?
Bob
(c) copyright 2009
Performance Builders
Wednesday, September 16, 2009
Opportunity
About a dozen years ago I had the privilege to introduce the American Physical Therapy Association (APTA) to performance benchmarking at one of its Leadership Conferences (LAMP). The presentation was about using objective comparative performance data as a tool in discovering best practices and providing evidence based practice. It was a presentation about enhancing the performance of the profession.
Over the past 15 years I had the privilege to benchmark hundreds of physical therapy operations - both hospital and private practice based. Benchmarking provides a disciplined statistical methodology t0 identify and assess variance in business performance - financial, operational, productivity, utilization, etc. The bottom line for a practice owner or manager is that benchmarking provides an efficient and economical system for optimizing clinical outcomes, competitive advantage, and profitability.
In working with the data on individual practices I found another story that was being told by the aggregate data. It was a financial story of physical therapy performance across the nation. It was a multi-billion dollar story told on the back of a napkin! Here's that story...
First lets make a few conservative assumptions that are readily supported by benchmarked industry data.
Assumptions:
Over the past 15 years I had the privilege to benchmark hundreds of physical therapy operations - both hospital and private practice based. Benchmarking provides a disciplined statistical methodology t0 identify and assess variance in business performance - financial, operational, productivity, utilization, etc. The bottom line for a practice owner or manager is that benchmarking provides an efficient and economical system for optimizing clinical outcomes, competitive advantage, and profitability.
In working with the data on individual practices I found another story that was being told by the aggregate data. It was a financial story of physical therapy performance across the nation. It was a multi-billion dollar story told on the back of a napkin! Here's that story...
First lets make a few conservative assumptions that are readily supported by benchmarked industry data.
Assumptions:
- Each therapist provides 12 patient visits per day
- Each visit consists of 3.5 service units (CPTs)
- Each therapist works 230 days per year
- There are about 125,000 PTs in the US
- Expense per unit of service is improved by 10%
- Each therapist provides 9660 service units per year for a total of 1.2 billion units per year.
The Impact:
- A 10% improvement in average practice expense across the US would generate an additional $2.9 billion in profit/margin. That equates to $23,200 per therapist ANNUALLY!
A 10% improvement across the industry would not be difficult considering the lack of attention that business performance gets in most practices and the high variance in financial performance that is shown by benchmarking.
What could such a an improvement in profitability (discretionary income) have on professional development, enhanced services, competitive advantage, compensation, political influence, and social responsibility?
Most physical therapy practices in the US are under performing. The performance of the top quartile of practices (25%) prove what can be achieved. They also demonstrate how it can be achieved (best practices).
Its right there in the numbers! That is what benchmarking and best practice is all about. Time consuming and costly scientific studies are not necessary. The answers are already in.
The opportunity does not offer just a one-time payoff, but one that is repeated annually! Think of what a decade of improvement would produce. Think how practice values would increase when sale prices are based on MULTIPLES of profitability. Think how performance, reward, and influence could be transformed.
The potential for the industry is nothing short of transformational!
In a period of skyrocketing health care costs and national policy debate on health care reform, isn't transformation what the PT industry needs?
Will ignoring the issues/threats with business as usual or complaining about health policy change your reality? The solution and the reward will go to those within the industry who take matters in their own hands and within their own practices to change their performance reality.
The risk is low and the return on investment great.
So, how are you doing? What are you waiting for?
Bob
(c) copyright 2009
Tuesday, September 15, 2009
Quotable
"The future enters into us, in order to transform us, long before it happens." - Ranier Maria Rilke
Friday, September 11, 2009
Performance Tool - Order Now for 2010
You asked for it and here it is...
Performance Master 2010 (PM) is ready for distribution to physical therapy practices and personal training studios. PM is a simple to use powerful software application that empowers business owners and managers with critical control over the performance of their practices.
Want top performance and profitability in your practice? Try Performance Master.
PM convenienty takes you through the establishment of 13 critical performance assumptions that are unique to your business situation. It then uses those assumptions to automatically calculate 16 powerful performance standards that are the key to performance in your business.
Each week you enter 15 performance data points into the program - takes just a minute or two. PM graphs 52 weeks of performance plus year to date performance against each of your performance standards. For the first time you have a business dashboard that will take you to your chosen level of performance.
Superior performance is all about identifying emerging issues and makeing timely decisions based on knowledge. PM assures that what needs attention gets attention. The results are transformational!
Not measuring up? Well PM also points you to the key business processes that drive each standard, allowing you to get back on track in real time!
If you don't know what your 16 performance standard are and how you measure up, your business performance is falling short of its potential.
A one recent Performance Master business owner said, "For the first time I have confidence that I'm in control of my business and it feels so good!" D.S.
A one year Performance Master license costs just $365. Its a small investment with a great return! ...more profit, less worry, better sleep! Satisfaction is guaranteed.
Now is the time to lay the foundation for a productive and profitable 2010 in your business.
Order your Performance Master today! Email Please put Performance Master in the subject
line.
When business performance counts - Count on Performance Builders!
Bob
(c) Copyright 2009
Performance Builders
Performance Master 2010 (PM) is ready for distribution to physical therapy practices and personal training studios. PM is a simple to use powerful software application that empowers business owners and managers with critical control over the performance of their practices.
Want top performance and profitability in your practice? Try Performance Master.
PM convenienty takes you through the establishment of 13 critical performance assumptions that are unique to your business situation. It then uses those assumptions to automatically calculate 16 powerful performance standards that are the key to performance in your business.
Each week you enter 15 performance data points into the program - takes just a minute or two. PM graphs 52 weeks of performance plus year to date performance against each of your performance standards. For the first time you have a business dashboard that will take you to your chosen level of performance.
Superior performance is all about identifying emerging issues and makeing timely decisions based on knowledge. PM assures that what needs attention gets attention. The results are transformational!
Not measuring up? Well PM also points you to the key business processes that drive each standard, allowing you to get back on track in real time!
If you don't know what your 16 performance standard are and how you measure up, your business performance is falling short of its potential.
A one recent Performance Master business owner said, "For the first time I have confidence that I'm in control of my business and it feels so good!" D.S.
A one year Performance Master license costs just $365. Its a small investment with a great return! ...more profit, less worry, better sleep! Satisfaction is guaranteed.
Now is the time to lay the foundation for a productive and profitable 2010 in your business.
Order your Performance Master today! Email Please put Performance Master in the subject
line.
When business performance counts - Count on Performance Builders!
Bob
(c) Copyright 2009
Performance Builders
Thursday, September 10, 2009
Economics In Practice
The current practice economics are not stable, secure, scalable, or sustainable in institutions or private practice.
Reimbursement has and will continue to erode. Compensation expectations are and will continue to build. The only way out of that scenario is enhanced productivity amongst fewer people.
Innovative compensation strategies and incentives are part of the equation but not all of the equation. Professionals want autonomy of practice, mastery of skills, and purpose in their work.
What is needed is reconceptualization of the challenge and the solutions.
Pay-for-performance has proven challenging in healthcare on multiple levels. That said, professional autonomy demands both clinical and economic accountability.
It's time that the concept of "pay-for-performance" be migrated to "variable compensation" within the framework of autonomy.
Are practices and professionals ready for it? NO, but they need to take it seriously if they intend to remain economically viable. Those that adopt "variable compensation" effectively will enjoy a substancial competitive advantage in the coming months and years. Those who can deliver good service and productivity will have unique opportunities that will pass the rest by.
Bob
(c) Copyright 2009
Performance Builders
Reimbursement has and will continue to erode. Compensation expectations are and will continue to build. The only way out of that scenario is enhanced productivity amongst fewer people.
Innovative compensation strategies and incentives are part of the equation but not all of the equation. Professionals want autonomy of practice, mastery of skills, and purpose in their work.
What is needed is reconceptualization of the challenge and the solutions.
Pay-for-performance has proven challenging in healthcare on multiple levels. That said, professional autonomy demands both clinical and economic accountability.
It's time that the concept of "pay-for-performance" be migrated to "variable compensation" within the framework of autonomy.
Are practices and professionals ready for it? NO, but they need to take it seriously if they intend to remain economically viable. Those that adopt "variable compensation" effectively will enjoy a substancial competitive advantage in the coming months and years. Those who can deliver good service and productivity will have unique opportunities that will pass the rest by.
Bob
(c) Copyright 2009
Performance Builders
Monday, September 7, 2009
Diggin for Gold
I recently finished a consulting project with a client who was interested in a practice tune-up for performance and strategy. The practice was a one therapist operation.
One of the first things we did was go back and review a few key agreements the practice had signed. One of those agreements was a contract with an outsource service provider.
SURPRISE!
The service contract referenced a certain deliverable that the provider had not delivered and that resulted in the practice assuming the cost for the overlooked service. It was an incidental clause that had remained overlooked for 5 years during which it had approximately a $76,000 ($15,000 annual) negative impact on the practice's bottom line!
We are hopeful those dollars will be recovered from the outsource provider. Return on investment for the practice owner? About 3,700% - not a bad investment in a punk economy!
What is being overlooked in your practice? What's right there just waiting to be discovered? In my experience with hundreds of practices, every practice is overlooking something! Most are overlooking multiple things. Every dollar discovered is new found profit.
"Thar's gold in them thar hills!"
It's a good time to go prospecting! And, that is particularly so in a down economy. It's all about knowing where to dig - a reliable map and experience has proven helpful. At Performance Builders we have both - could you use some help digging?
Bob
(c) copyright 2009
Performance Builders
One of the first things we did was go back and review a few key agreements the practice had signed. One of those agreements was a contract with an outsource service provider.
SURPRISE!
The service contract referenced a certain deliverable that the provider had not delivered and that resulted in the practice assuming the cost for the overlooked service. It was an incidental clause that had remained overlooked for 5 years during which it had approximately a $76,000 ($15,000 annual) negative impact on the practice's bottom line!
We are hopeful those dollars will be recovered from the outsource provider. Return on investment for the practice owner? About 3,700% - not a bad investment in a punk economy!
What is being overlooked in your practice? What's right there just waiting to be discovered? In my experience with hundreds of practices, every practice is overlooking something! Most are overlooking multiple things. Every dollar discovered is new found profit.
"Thar's gold in them thar hills!"
It's a good time to go prospecting! And, that is particularly so in a down economy. It's all about knowing where to dig - a reliable map and experience has proven helpful. At Performance Builders we have both - could you use some help digging?
Bob
(c) copyright 2009
Performance Builders
Thursday, September 3, 2009
Thanks
Richard - thanks for your comments to my recent "Compete" post.
Yes, differentiation is important for branding, reputation, competition, and growth particularly in crowded markets. It is even more critical if one's practice is not a "leading" competitor.
Yes too, a lot of the juice has been squeezed out of price competition with third party reimbursement and related matters. And there remains little transparency in pricing. Having said that, there remain some spectacular opportunities to Zag by price differentiation on both the high end and low end but few practices see or understand those opportunities.
Yes, superior competency, outcomes, and service are always in demand and most practices "claim" to have that as a priority. Unfortunately too many are satisfied with their own definition of "superior". Too few are objective in assessing or allowing themselves to be assessed relative to their true ranking... a common condition in most professions it seems.
The first responsibility of a professional is competency, outcomes, and service; but I would suggest that is often not sufficient for private practices that do not have the economic backing and resources of a large health care system or its clout in steering patient referrals. Their competitive advantage is often found at the intersection of innovation and entrepreneurism - thus Zagging.
In identifying opportunity, competitiveness and reward through innovation (Zagging) I am not suggesting that practices abdicate their first responsibility and opportunity as professionals. Rather, I'm suggesting that there is unlimited potential that lies outside of the box of currently perceived constraints of traditional practice models.
For those interested in Zagging, the book Innovators Dilemma by Christensen is a worthwhile read.
Richard, I think we are more on the same page than not, and that our differences are more likely a matter of emphasis, markets, and resources. Thank you for your relevent comments.
Bob
(c) copyright 2009
Performance Builders
Yes, differentiation is important for branding, reputation, competition, and growth particularly in crowded markets. It is even more critical if one's practice is not a "leading" competitor.
Yes too, a lot of the juice has been squeezed out of price competition with third party reimbursement and related matters. And there remains little transparency in pricing. Having said that, there remain some spectacular opportunities to Zag by price differentiation on both the high end and low end but few practices see or understand those opportunities.
Yes, superior competency, outcomes, and service are always in demand and most practices "claim" to have that as a priority. Unfortunately too many are satisfied with their own definition of "superior". Too few are objective in assessing or allowing themselves to be assessed relative to their true ranking... a common condition in most professions it seems.
The first responsibility of a professional is competency, outcomes, and service; but I would suggest that is often not sufficient for private practices that do not have the economic backing and resources of a large health care system or its clout in steering patient referrals. Their competitive advantage is often found at the intersection of innovation and entrepreneurism - thus Zagging.
In identifying opportunity, competitiveness and reward through innovation (Zagging) I am not suggesting that practices abdicate their first responsibility and opportunity as professionals. Rather, I'm suggesting that there is unlimited potential that lies outside of the box of currently perceived constraints of traditional practice models.
For those interested in Zagging, the book Innovators Dilemma by Christensen is a worthwhile read.
Richard, I think we are more on the same page than not, and that our differences are more likely a matter of emphasis, markets, and resources. Thank you for your relevent comments.
Bob
(c) copyright 2009
Performance Builders
Quotable
"Success will never be a big step in the future. Success is a small step taken just now." - Jonatan Martensson
"Success is a self-fulfilling prophecy." - H.H. Swami Tejomayananda
But, success is never achieved alone...
"Success is a self-fulfilling prophecy." - H.H. Swami Tejomayananda
But, success is never achieved alone...
