Every year, the practice leaders/owner(s) should evaluate the overall value proposition of their pediatric practice. Evaluating the value proposition of a medical business can range from a long, deep study to a summary review. A pediatric practice is a medical business and, like any business, there is a value proposition. A value proposition that is strongly aligned with the market opportunity will result in greater business value and success than that of a value proposition that is misaligned with the market.
What is a Value Proposition?
A pediatric practice owner does not need to be an expert on developing business value propositions, but should have a basic understanding of a value proposition. This can be learned by referencing resources such as Wikipedia. Wikipedia includes the basic definition of, “In marketing, a company’s value proposition is the full mix of benefits or economic value which it promises to deliver to the current and future customers (i.e., a market segment) who will buy their products and/or services. It is part of a company’s overall marketing strategy which differentiates its brand and fully positions it in the market. A value proposition can apply to an entire organization, or parts thereof, or customer accounts, or products or services.”
A value proposition provides the “why” a consumer (e.g. patient/parent) should use or select a service (e.g. pediatric practices) versus other options. If you are interested to learn more about some background on value propositions, there are additional great resources in textbooks utilized for MBA programs.
In short, a value proposition is a positioning statement that explains the benefit that the service provides and how the organization provides this service. A pediatric practice provides preventative and sick healthcare in the market. How the practice provides services to the market defines the value proposition of the practice. When identifying the practice approach and value proposition, it is important to parents and caregivers who are the primary decision-makers for the healthcare of their children to have access to healthcare that is consistent with hours, availability, follow-up, in addition to accepting the medical insurance of the child. Additionally, parents prefer predictable costs of healthcare. For most healthcare needs of children, a well-managed and consistently operated independent pediatric practice is usually the best option for parents and their children.
Note that, in a situation where the pediatrician is the sole practitioner, the pediatrician becomes the ‘value proposition’ of the pediatric practice. For a practice made up of one to two providers, there are trade-offs to make between hours available, lifestyle, and revenue/income. This is a personal decision, and we work with and support many different approaches. For larger practices, while a family may have a preferred pediatrician or other healthcare provider for the treatment of their child, some parents may only be able to manage their healthcare needs outside of that respective pediatrician’s hours available. A practice can enhance this by either increasing the hours of the primary providers or by adding additional providers to allow more options and flexibility for the parents.
Options to Obtain Preventive Care and Sick Care for Children Continues to Change
Traditionally, a parent would be directed to and/or receive most of their children’s care from a pediatrician or family physician. While a physician is the highest trained option, pediatric healthcare has evolved from physician’s being the only primary option. Pediatric practices now manage patient care with multiple types of providers (physicians, nurse practitioners, and/or physician assistants). Additionally, pediatric healthcare choices include family practice offices, as well as some other healthcare entities such as retail clinics (e.g. CVS Pharmacy Minute Clinic), urgent-care centers, and TeleHealth services provided by a parent’s managed care insurance plan or other organization. The macro environment of choices for pediatric healthcare has, and will continue to, evolve and expand.
With the busy family lives of working parents and children attending school while participating in extracurricular activities, it can be said that there is much diversity amongst family situations. The busy family today desires and seeks healthcare options that provide high availability for medical appointments and treatments. While insurance coverage has improved over the last twelve years – primarily due to the addition of the Affordable Care Act requirements – the high coverage of healthcare via insurance has resulted in insurances and other payers focusing their attention on incentives aligned with balancing value and quality. This has inspired change within healthcare entities, alongside an increase in choices to facilitate your child’s healthcare needs (e.g. medical practices, hospitals, urgent-care centers, retail clinics, telehealth, etcetera). One thing to take into consideration is that most patients have, and prefer, to use their medical insurance. Thus, families seek to leverage a pediatric practice that understands how to process their medical insurance appropriately. An independent pediatric practice usually provides the most cost-effective healthcare for children. Consistent operation of the medical billing practices and claims management is valuable for practice receivables, as well as can improve overall satisfaction of families through both consistency and predictability of costs.
Some Key Factors to Evaluate the Value Proposition of Your Pediatric Practice
We have been fortunate to work with and help independent pediatric practices for over fourteen years. While there are a variety of value propositions and approaches for pediatric practices, there are still several common factors to consider when evaluating and enhancing a value proposition. Some of these factors include the availability of patient hours, other local options for pediatric healthcare, and the operational consistency of the practice itself.
- Available Patient Hours for Scheduling: Each pediatric practice owner and/or leader operates their practice via an approach that meets their desired goals. This can vary from a multi-provider practice that is open from 8 AM to 8 PM M-F with consistent Saturday hours, to a one-to-two provider practice that may have one or no routine patient hours after 6 PM. The location of a practice is a major driving force in the decision behind hours of operation; a practice should be open in order for the practice to be competitive. For instance, if a practice is located in the suburbs of a city, for which there are multiple pediatric health systems and retail clinics that are open 8 AM to 8 PM Monday through Friday with additional Saturday hours, the practice would most likely need to be open until 8 PM Monday through Thursday to optimize patient growth and provide a pediatric practice that meets the respective market.
- Other Options Available for Pediatric Healthcare: Evaluate the number of pediatric and/or family practices in the area. During this evaluation, compare the overlap of hours with the other practice(s), as well as potential hours to enhance hours available. Perform an analysis of the families in the practice, including how often and how many patients have accessed a retail clinic (e.g. CVS Minute Clinic) or other healthcare entity versus the practice within the last six months. Does the practice and community need for the office to be open until 8 PM and, if so, how many days per week?
- Evaluate the Operational Consistency of the Pediatric Practice: Consistency of quality and facilitation of care is an important factor in defining the value proposition of a particular service. Practice leadership should [objectively] evaluate the previous six to nine months of attributes related to operational consistency. These attributes should include how consistent the practice has providers and staff available during the scheduled hours, as well as how consistent patient/family engagement has been in providing quality healthcare. Consider measuring the percentage of time the office has been open over the previous six months. During this evaluation, question: What barriers prevent the practice from being available above 98% of the posted hours? What steps does the practice need to take to implement changes that will promote an increase in consistency? What is the consistency of the front desk team at verifying patient demographics, insurance detail, collecting payments, collecting co-pays, and entering this into the PediatricXpress system? While evaluating the operational consistency, identify if improvements can occur by solving a training and/or management issue. For instance, the front desk team can typically improve their performance by having the most consistent front desk team member as the lead in training a team member that is not as consistent. Management should be identifying the most consistent and inconsistent front desk team members, providing feedback, and implementing the plan.
Identify Potential Changes to Make in the Value Proposition of Your Pediatric Practice
The annual review of the practice’s value proposition serves to help identify what changes may need to be made to enhance the overall value that the practice provides to both patients and their caregivers. Some questions to consider are: What are the operational changes that the practice needs to make to perform more efficiently and consistently? Is the practice receiving new patients on a consistent basis, or has there been a decrease in average new patients per month? If there has been a change, what is the key reason(s)? Internal operation or additional choices for healthcare in the area? Does the practice maintain better availability for children than that of other local healthcare entities? What is the level of consistency in greeting, treating, and managing the patients and their families? What positive and corrective feedback do parents and patients provide? How well does the practice respond to the input, suggestions, and needs of families?