The Value of an Anesthesia SWOT Analysis

Management consultants like to advise their clients to perform a SWOT analysis on a regular basis, because it is an effective tool for strategic planning. In the current environment, it is especially important to honestly identify internal strengths and weaknesses and external opportunities and threats. Successful practices use this tool to constantly fine-tune their goals and objectives to anticipate changing market conditions. The concept of such an analysis should seem very familiar to anesthesia providers who must assess each patient's anesthetic requirements as they prepare the anesthesia plan. The difference is simply that this applies to the practice as a whole and not just a given patient.

The following outline is intended to provide some common examples that apply to many practices. Given that every practice is unique, it is especially important that this is a careful and honest self-assessment. The ultimate goal of the exercise is to build on the practice's strengths and opportunities and to convert weaknesses and threats into opportunities. Many practices will rely on an outside consultant to facilitate this process, but it can actually be performed by the management team and should be repeated on at least an annual basis. Managing change is never easy. Members should always be reminded that the best way to assess the value of this process is to look back after six months and ask the question, what has changed as a result of our decisions?

Strengths

Identifying practice strengths is not a simple snapping of suspenders. Anesthesia practices have a variety of customers. It is best to actively solicit feedback and input. The following are some of the most desirable traits a practice can demonstrate.

• The practice is appreciated for the consistency and quality of clinical care.
• Administration sees the practice as a model of customer service; it is not enough to just have good clinical outcomes. The practice must be perceived as contributing to the overall success of the facility.
• Good practices rely on visionary leadership of the managing partners. The best practices have a clear understanding of the group's value proposition.
• Equally important is effective management, which may include an outside billing or management service.
• It also goes without saying that the practice has the ability to recruit and retain an appropriate staff of qualified providers.

Weaknesses

Often the most challenging aspect of this process is honestly identifying and articulating practice weaknesses in a way that can be assessed and overcome. The point here is to list the qualities that could be used against the practice in a competitive situation. The following are just some examples that have come up in our work with clients.

• An inability to establish group consensus on key management decisions is a huge problem. Many practices complain that key issues keep getting revisited at group meetings as certain individuals continue to dissent.
• Sometimes it is individual disruptive providers who compromise the reputation of the practice as a whole.
• Constant turnover, inadequate staffing and an inability to recruit providers is a major challenge for many practices and one that often results in the elimination of the practice or employment of the providers.
• More often than not, payer mix is the ultimate challenge. If there is not enough revenue being generated from clinical activity, the practice will require financial support from the facility. Such requests can be extremely disruptive.
• Unrealistic coverage requirements can be a huge problem because of their manpower implications.

Opportunities

It used to be said that what determined the strength and success of a practice was what happened in the operating room. Quality care is now a given. What matters most is how the practice interacts with the stakeholders outside the operating room. This gives new meaning to the concept of thinking outside the box. Opportunities come to those who look for them and pursue them actively.

• The days of a given practice dedicating itself to a specific facility are slowly fading away. Successful practices must find ways to follow the patients and their revenue.
• Many practices have been pursuing contracts with ambulatory facilities. In some cases, these are quite productive and profitable; but this is not always the case. Each opportunity must be carefully evaluated.
• Some practices have found it useful, if not always profitable, to explore chronic pain.
• There are some notable examples of anesthesia practices that have started playing a more active role in O.R. management. This is not always a revenue generator but could provide the practice with the ability to ensure that operating rooms are used more efficiently.
• At the end of the day, the success or failure of a practice hinges on its relationship with administration. The stronger the relationship and the more anesthesia can influence critical decision-making, the better.

Threats

Every practice is vulnerable. The point is the worst thing is to be caught off guard by market developments. Many once solid and reputable anesthesia practices no longer exist. Some did not see the change coming, and others simply failed to make the necessary adjustments to meet new market requirements and expectations. Some were simply guilty of hubris.

• The thing many practices fear most is an RFP (Request for Proposal). Although these do not always result in giving the contract to another entity, their preparation can be tedious and stressful.
• Hospital ownership changes and mergers are often a unique challenge.
• By the same token, changes in administration can have very unpredictable results. A new CFO may have different goals and objectives than his/her predecessor.
• Since most practices now rely on their hospitals for the necessary financial support, declining hospital profitability can be the kiss of death for the anesthesia practice.
• One other factor that has led to giving the anesthesia contract to a new provider group may be frustration. There was an example of a practice in California that had held the contract for more than 20 years but then lost it to another provider group. When asked why, administration admitted they just thought it was time for a change.

Performing a SWOT analysis for your practice is essential in the current environment. Strategic planning is critical. Resistance to change is almost always the end of a practice. If you have further questions on this topic, you can contact your account executive or reach out to us at info@anesthesiallc.com.