Medical & Health Business Plans

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Dental Practice Business Plans

  • Dental Office Business Plan

Health Administration Business Plans

  • Benefits Administration Business Plan
  • Health Plan Administration Business Plan
  • Medical Billing Business Plan

Medical Equipment Business Plans

  • Eye Surgery Equipment Maker Business Plan
  • Hearing Testing Systems Business Plan
  • Lift Bed Manufacturer Business Plan
  • Medicine Dispenser Business Plan
  • Medical Equipment - Supplies Business Plan
  • Medical Equipment Business Plan
  • Medical Equipment Developer Business Plan
  • Sports Medical Equipment Business Plan
  • Surgical Medical Equipment Business Plan
  • Voice Recognition Software Business Plan

Medical Practice Business Plans

  • Chiropractic Business Plan
  • Chiropractic Clinic Business Plan
  • Chiropractic Services Business Plan
  • Family Chiropractic Business Plan
  • Family Medicine Clinic Business Plan
  • Occupational Health Business Plan
  • Physical Therapy Massage Business Plan
  • Psychological Health Center Business Plan
  • Sports Therapy Business Plan
  • Home Health Care Business Plan

Medical Support & Laboratories Business Plans

  • Dental Laboratories Business Plan
  • Laboratory Business Plan
  • Medical Internet Marketing Business Plan
  • Medical Language Translation Business Plan
  • Medical Scanning Lab Business Plan
  • Medical Services Management Business Plan
  • Medical Software Business Plan
  • Medical Transcription Business Plan
  • Personnel Management Business Plan

Nursing Home Business Plans

  • Home Health Care Services Business Plan
  • Nursing Home Business Plan

Pharmacy Business Plans

  • Agriculture Farm Business Plan
  • Pharmacy Business Plan

Psychological Therapy Business Plans

Veterinary practice business plans.

  • Horse Training Business Plan
  • Veterinary Clinic Business Plan

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business plans in healthcare

The future of healthcare: Value creation through next-generation business models

The healthcare industry in the United States has experienced steady growth over the past decade while simultaneously promoting quality, efficiency, and access to care. Between 2012 and 2019, profit pools (earnings before interest, taxes, depreciation, and amortization, or EBITDA) grew at a compound average growth rate of roughly 5 percent. This growth was aided in part by incremental healthcare spending that resulted from the 2010 Affordable Care Act. In 2020, subsidies for qualified individual purchasers on the marketplaces and expansion of Medicaid coverage resulted in roughly $130 billion 1 Federal Subsidies for Health Insurance Coverage for People Under Age 65: CBO and JCT’s March 2020 Projections, Congressional Budget Office, Washington, DC, September 29, 2020, cbo.gov. 2 Includes adults made eligible for Medicaid by the ACA and marketplace-related coverage and the Basic Health Program. of incremental healthcare spending by the federal government.

The next three years are expected to be less positive for the economics of the healthcare industry, as profit pools are more likely to be flat. COVID-19 has led to the potential for economic headwinds and a rebalancing of system funds. Current unemployment rates (6.9 percent as of October 2020) 3 The employment situation—October 2020 , US Department of Labor, November 6, 2020, bls.gov. indicate some individuals may move from employer-sponsored insurance to other options. It is expected that roughly between $70 billion and $100 billion in funding may leave the healthcare system by 2022, compared with the expected trajectory pre-COVID-19. The outflow is driven by coverage shifts out of employer-sponsored insurance, product buy-downs, and Medicaid rate pressures from states, partially offset by increased federal spending in the form of subsidies and cost sharing in the Individual market and in Medicaid funding.

Underlying this broader outlook are chances to innovate (Exhibit 1). 4 Smit S, Hirt M, Buehler K, Lund S, Greenberg E, and Govindarajan A, “ Safeguarding our lives and our livelihoods: The imperative of our time ,” March 23, 2020, McKinsey.com. Innovation may drive outpaced growth in three categories: segments that are anticipated to rebound from poor performance over recent years, segments that benefit from shifting care patterns that result directly from COVID-19, and segments where growth was expected pre-COVID-19 and remain largely unaffected by the pandemic. For the payer vertical, we estimate profit pools in Medicaid will likely increase by more than 10 percent per annum from 2019 to 2022 as a result of increased enrollment and normalized margins following historical lows. In the provider vertical, the rapid acceleration in the use of telehealth and other virtual care options spurred by COVID-19 could continue. 5 Bestsennyy O, Gilbert G, Harris A, and Rost J, “ Telehealth: A quarter-trillion-dollar post-COVID-19 reality? ” May 29, 2020, McKinsey.com. Growth is expected across a range of sub-segments in the services and technology vertical, as specialized players are able to provide services at scale (for example, software and platforms and data and analytics). Specialty pharmacy is another area where strong growth in profit pools is likely, with between 5 and 10 percent compound annual growth rate (CAGR) expected in infusion services and hospital-owned specialty pharmacy sub-segments.

Strategies that align to attractive and growing profit pools, while important, may be insufficient to achieve the growth that incumbents have come to expect. For example, in 2019, 34 percent of all revenue in the healthcare system was linked to a profit pool that grew at greater than 5 percent per year (from 2017 to 2019). In contrast, we estimate that only 13 percent of revenue in 2022 will be linked to profit pools growing at that rate between 2019 and 2022. This estimate reflects that profit pools are growing more slowly due to factors that include lower membership growth, margin pressure, and lower revenue growth. This relative scarcity in opportunity could lead to increased competition in attractive sub-segments with the potential for profits to be spread thinly across organizations. Developing new and innovative business models will become important to achieve the level of EBITDA growth observed in recent years and deliver better care for individuals. The good news is that there is significant opportunity, and need, for innovation in healthcare.

New and innovative business models across verticals can generate greater value and deliver better care for individuals

Glimpse into profit pool analyses and select sub-segments.

Within the context of these overarching observations, the projections for specific sub-segments are nuanced and tightly connected to the specific dynamics each sub-segment is currently facing:

  • Payer—Small Group: Small group has historically seen membership declines and we expect this trend to continue and/or accelerate in the event of an economic downturn. Membership declines will increase competition and put pressure on incumbent market leaders to both maintain share and margin as membership declines, but fixed costs remain.
  • Payer—Medicare Advantage: Historic profit pool growth in the Medicare Advantage space has been driven by enrollment gains that result from demographic trends and a long-term trend of seniors moving from traditional Medicare fee-for-service programs to Medicare Advantage plans that have increasingly offered attractive ancillary benefits (for example, dental benefits, gym memberships). Going forward, we expect Medicare members to be relatively insulated from the effects of an economic downturn that will impact employers and individuals in other payer segments.
  • Provider—General acute care hospitals: Cancelation of elective procedures due to COVID-19 is expected to lead to volume and revenue reductions in 2019 and 2020. Though volume is expected to recover partially by 2022, growth will likely be slowed due to the accelerated shift from hospitals to virtual care and other non-acute settings. Payer mix shifts from employer-sponsored to Medicaid and uninsured populations in 2020 and 2021 are also likely to exert downward pressure on hospital revenue and EBITDA, possibly driving cost-optimization measures through 2022.
  • Provider—Independent labs: COVID-19 testing is expected to drive higher than average utilization growth in independent labs through 2020 and 2021, with more typical utilization returning by 2022. However, labs may experience pressure on revenue and EBITDA growth as the payer mix shifts to lower-margin segments, offsetting some of the gains attributed to utilization.
  • Provider—Virtual office visits: Telehealth has helped expand access to care at a time when the pandemic has restricted patients’ ability to see providers in person. Consumer adoption and stickiness, along with providers’ push to scale-up telehealth offerings, are expected to lead to more than 100 percent growth per annum in the segment from 2019 to 2022, going beyond traditional “tele-urgent” to more comprehensive virtual care.
  • HST—Medical financing: The medical financing segment may be negatively impacted in 2020 due to COVID-19, as many elective services for which financing is used have been deferred. However, a quick bounce-back is expected as more patients lacking healthcare coverage may need financing in 2021, and as providers may use medical financing as a lever to improve cash reserves.
  • HST—Wearables: Looking ahead, the wearables segment is expected to see a slight dip in 2020 due to COVID-19, but is expected to rebound in 2021 and 2022 given consumer interest in personal wellness and for tracking health indicators.
  • Pharma services—Pharmacy benefit management: The growth is expected to return to baseline expectations by 2022 after an initial decline in 2020 and 2021 due to the COVID-19-driven decrease in prescription volume.

New and innovative business models are beginning to show promise in delivering better care and generating higher returns. The existence of these models and their initial successes are reflective of what we have observed in the market in recent years: leading organizations in the healthcare industry are not content to simply play in attractive segments and markets, but instead are proactively and fundamentally reshaping how the industry operates and how care is delivered. While the recipe across verticals varies, common among these new business models are greater alignment of incentives typically involving risk bearing, better integration of care, and use of data and advanced analytics.

Payers—Next-generation managed care models

For payers, the new and innovative business models that are generating superior returns are those that incorporate care delivery and advanced analytics to better serve individuals with increasingly complex healthcare needs (Exhibit 2). As chronic disease and other long-term conditions require more continuous management supported by providers (for example, behavioral health conditions), these next-generation managed care models have garnered notice. Nine of the top ten payers have made acquisitions in the care delivery space. Such models intend to reorient the traditional payer model away from an operational focus on financing healthcare and pricing risk, and toward more integrated managed care models that better align incentives and provide higher-quality, better experience, lower-cost, and more accessible care. Payers that deployed next-generation managed care models generate 0.5 percentage points of EBITDA margin above average expectations after normalizing for payer scale, geographical footprint, and segment mix, according to our research.

The evidence for the effectiveness of these next-generation care models goes beyond the financial analysis of returns. We observe that these models are being deployed in those geographies that have the greatest opportunity to positively impact individuals. Those markets with 1) a critical mass of disease burden, 2) presence of compressible costs (the opportunity for care to be redirected to lower-cost settings), and 3) a market structure conducive to shifting to higher-value sites of care, offer substantial ways to improve outcomes and reduce costs. (Exhibit 3).

Currently, a handful of payers—often large national players with access to capital and geographic breadth that enables acquisition of at-scale providers and technologies—have begun to pursue such models. Smaller payers may find it more difficult to make outright acquisitions, given capital constraints and geographic limitations. M&A activity across the care delivery landscape is leaving smaller and more localized assets available for integration and partnership. Payers may need to increasingly turn toward strategic partnerships and alliances to create value and integrate a range of offerings that address all drivers of health.

Providers—reimagining care delivery beyond the hospital

For health systems, through an investment lens, the ownership and integration of alternative sites of care beyond the hospital has demonstrated superior financial returns. Between 2013 and 2018, the number of transactions executed by health systems for outpatient assets increased by 31 percent, for physician practices by 23 percent, and for post-acute care assets by 13 percent. At the same time, the number of hospital-focused deals declined by 6 percent. In addition, private equity investors and payers are becoming more active dealmakers in these non-acute settings. 6 CapitalIQ, Dealogic, and Irving Levin Associates. 7 In 2018, around 40 percent of all post-acute and outpatient deals were completed by an acquirer other than a traditional provider.

As investment is focused on alternative sites of care, we observe that health systems pursuing diversified business models that encompass a greater range of care delivery assets (for example, physician practices, ambulatory surgery centers, and urgent care centers) are generating returns above expectations (Exhibit 4). By offering diverse settings to receive care, many of these systems have been able to lower costs, enhance coordination, and improve patient experience while maintaining or enhancing the quality of the services provided. Consistent with prior research, 8 Singhal S, Latko B, and Pardo Martin C, “ The future of healthcare: Finding the opportunities that lie beneath the uncertainty ,” January 31, 2018, McKinsey.com. systems with high market share tend to outperform peers with lower market share, potentially because systems with greater share have greater ability not only to ensure referral integrity but also to leverage economies of scale that drive efficiency.

The extent of this outperformance, however, varies by market type. For players with top quartile share, the difference in outperformance between acute-focused players and diverse players is less meaningful. Contrastingly, for bottom quartile players, the increase in value provided by presence beyond the acute setting is more significant. While there may be disadvantages for smaller and sub-scale providers, opportunities exist for these players—as well as new entrants and attackers—to succeed by integrating offerings across the care continuum.

These new models and entrants and their non-acute, technology-enabled, and multichannel offerings can offer a different vision of care delivery. Consumer adoption of telehealth has skyrocketed, from 11 percent of US consumers using telehealth in 2019 to 46 percent now using telehealth to replace canceled healthcare visits. Pre-COVID-19, the total annual revenues of US telehealth players were an estimated $3 billion; with the acceleration of consumer and provider adoption and the extension of telehealth beyond virtual urgent care, up to $250 billion of current US healthcare spend could be virtualized. 9 Bestsennyy O, Gilbert G, Harris A, and Rost J, “ Telehealth: A quarter-trillion-dollar post-COVID-19 reality? ” May 29, 2020, McKinsey.com. These early indications suggest that the market may be shifting toward a model of innovative tech-enabled care, one that unlocks value by integrating digital and non-acute settings into a comprehensive, coordinated, and lower-cost offering. While functional care coordination is currently still at the early stages, the potential of technology and other alternative settings raises the question of the role of existing acute-focused providers in a more integrated and digital world.

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Healthcare services and technology—innovation and integration across the value chain.

Growth in the healthcare services and technology vertical has been material, as players are bringing technology-enabled services to help improve patient care and boost efficiency. Healthcare services and technology companies are serving nearly all segments of the healthcare ecosystem. These efforts include working with payers and providers to better enable the link between actions and outcomes, to engage with consumers, and to provide real-time and convenient access to health information. Since 2014, a large number and value of deals have been completed: more than 580 deals, or $83 billion in aggregate value. 10 Includes deals over $10 million in value. 11 Analysis from PitchBook Data, Inc. and McKinsey Healthcare Services and Technology domain profit pools model. Venture capital and private equity have fueled much of the innovation in the space: more than 80 percent 12 Includes deals over $10 million in value. of deal volume has come from these institutional investors, while more traditional strategic players have focused on scaling such innovations and integrating them into their core.

Driven by this investment, multiple new models, players, and approaches are emerging across various sub-segments of the technology and services space, driving both innovation (measured by the number of venture capital deals as a percent of total deals) and integration (measured by strategic dollars invested as a percent of total dollars) with traditional payers and providers (Exhibit 5). In some sub-segments, such as data and analytics, utilization management, provider enablement, network management, and clinical information systems, there has been a high rate of both innovation and integration. For instance, in the data and analytics sub-segment, areas such as behavioral health and social determinants of health have driven innovation, while payer and provider investment in at-scale data and analytics platforms has driven deeper integration with existing core platforms. Other sub-segments, such as patient engagement and population health management, have exhibited high innovation but lower integration.

Traditional players have an opportunity to integrate innovative new technologies and offerings to transform and modernize their existing business models. Simultaneously, new (and often non-traditional) players are well positioned to continue to drive innovation across multiple sub-segments and through combinations of capabilities (roll-ups).

Pharmacy value chain—emerging shifts in delivery and management of care

The profit pools within the pharmacy services vertical are shifting from traditional dispensing to specialty pharmacy. Profits earned by retail dispensers (excluding specialty pharmacy) are expected to decline by 0.5 percent per year through 2022, in the face of intensifying competition and the maturing generic market. New modalities of care, new care settings, and new distribution systems are emerging, though many innovations remain in early stages of development.

Specialty pharmacy continues to be an area of outpaced growth. By 2023, specialty pharmacy is expected to account for 44 percent of pharmacy industry prescription revenues, up from 24 percent in 2013. 13 Fein AJ, The 2019 economic report on U.S. pharmacies and pharmacy benefit managers , Drug Channels Institute, 2019, drugchannelsinstitute.com. In response, both incumbents and non-traditional players are seeking opportunities to both capture a rapidly growing portion of the pharmacy value chain and deliver better experience to patients. Health systems, for instance, are increasingly entering the specialty space. Between 2015 and 2018 the share of provider-owned pharmacy locations with specialty pharmacy accreditation more than doubled, from 11 percent in 2015 to 27 percent in 2018, creating an opportunity to directly provide more integrated, holistic care to patients.

Challenges emerge for the US healthcare system as COVID-19 cases rise

Challenges emerge for the US healthcare system as COVID-19 cases rise

A new wave of modalities of care and pharmaceutical innovation are being driven by cell and gene therapies. Global sales are forecasted to grow at more than 40 percent per annum from 2019 to 2024. 14 Evaluate Pharma, February 2020. These new therapies can be potentially curative and often serve patients with high unmet needs, but also pose challenges: 15 Capra E, Smith J, and Yang G, “ Gene therapy coming of age: Opportunities and challenges to getting ahead ,” October 2, 2019, McKinsey.com. upfront costs are high (often in the range of $500,000 to $2,000,000 per treatment), benefits are realized over time, and treatment is complex, with unique infrastructure and supply chain requirements. In response, both traditional healthcare players (payers, manufacturers) and policy makers (for example, the Centers for Medicare & Medicaid Services) 16 Centers for Medicare & Medicaid Services, “Medicaid program; establishing minimum standards in Medicaid state drug utilization review (DUR) and supporting value-based purchasing (VBP) for drugs covered in Medicaid, revising Medicaid drug rebate and third party liability (TPL) requirements,” Federal Register , June 19, 2020, Volume 85, Number 119, p. 37286, govinfo.gov. are considering innovative models that include value-based arrangements (outcomes-based pricing, annuity pricing, subscription pricing) to support flexibility around these new modalities.

Innovations also are accelerating in pharmaceutical distribution and delivery. Non-traditional players have entered the direct-to-consumer pharmacy space to improve efficiency and reimagine customer experience, including non-healthcare players such as Amazon (through its acquisition of PillPack in 2018) and, increasingly, traditional healthcare players as well, such as UnitedHealth Group (through its acquisition of DivvyDose in September 2020). COVID-19 has further accelerated innovation in patient experience and new models of drug delivery, with growth in tele-prescribing, 17 McKinsey COVID-19 Consumer Survey conducted June 8, 2020 and July 14, 2020. a continued shift toward delivery of pharmaceutical care at home, and the emergence of digital tools to help manage pharmaceutical care. Select providers have also begun to expand in-home offerings (for example, to include oncology treatments), shifting the care delivery paradigm toward home-first models.

A range of new models to better integrate pharmaceutical and medical care and management are emerging. Payers, particularly those with in-house pharmacy benefit managers, are using access to data on both the medical and pharmacy benefit to develop distinctive insights and better coordinate across pharmacy and medical care. Technology providers, together with a range of both traditional and non-traditional healthcare players, are working to integrate medical and pharmaceutical care in more convenient settings, such as the home, through access to real-time adherence monitoring and interventions. These players have an opportunity to access a broad range of comprehensive data, and advanced analytics can be leveraged to more effectively personalize and target care. Such an approach may necessitate cross-segment partnerships, acquisitions, and/or alliances to effectively integrate the many components required to deliver integrated, personalized, and higher-value care.

Creating and capturing new value

These materials are being provided on an accelerated basis in response to the COVID-19 crisis. These materials reflect general insight based on currently available information, which has not been independently verified and is inherently uncertain. Future results may differ materially from any statements of expectation, forecasts or projections. These materials are not a guarantee of results and cannot be relied upon. These materials do not constitute legal, medical, policy, or other regulated advice and do not contain all the information needed to determine a future course of action. Given the uncertainty surrounding COVID-19, these materials are provided “as is” solely for information purposes without any representation or warranty, and all liability is expressly disclaimed. References to specific products or organizations are solely for illustration and do not constitute any endorsement or recommendation. The recipient remains solely responsible for all decisions, use of these materials, and compliance with applicable laws, rules, regulations, and standards. Consider seeking advice of legal and other relevant certified/licensed experts prior to taking any specific steps.

Before the COVID-19 pandemic, our research indicated that profits for healthcare organizations were expected to be harder to earn than they have been in the recent past, which has been made even more difficult by COVID-19. New entrants and incumbents who can reimagine their business models have a chance to find ways to innovate to improve healthcare and therefore earn superior returns. The opportunity for incumbents who can reimagine their business models and new entrants is substantial.

Institutions will be expected to do more than align with growth segments of healthcare. The ability to innovate at scale and with speed is expected to be a differentiator. Senior leaders can consider five important questions:

  • How does my business model need to change to create value in the future healthcare world? What are my endowments that will allow me to succeed?
  • How does my resource (for example, capital and talent) allocation approach need to change to ensure the future business model is resourced differentially compared with the legacy business?
  • How do I need to rewire my organization to design it for speed? 18 De Smet A, Pacthod D, Relyea C, and Sternfels B, “ Ready, set, go: Reinventing the organization for speed in the post-COVID-19 era ,” June 26, 2020, McKinsey.com.
  • How should I construct an innovation model that rapidly accesses the broader market for innovation and adapts it to my business model? What ecosystem of partners will I need? How does my acquisition, partnership, and alliances approach need to adapt to deliver this rapid innovation?
  • How do I prepare my broader organization to adopt and scale new innovations? Are my operating processes and technology platforms able to move quickly in scaling innovations?

There is no question that the next few years in healthcare are expected to require innovation and fresh perspectives. Yet healthcare stakeholders have never hesitated to rise to the occasion in a quest to deliver innovative, quality care that benefits everyone. Rewiring organizations for speed and efficiency, adapting to an ecosystem model, and scaling innovations to deliver meaningful changes are only some of the ways that helping both healthcare players and patients is possible.

Emily Clark is an associate partner in the Stamford office. Shubham Singhal , a senior partner in McKinsey’s Detroit office, is the global leader of the Healthcare, Public Sector and Social Sector practices. Kyle Weber is a partner in the Chicago office.

The authors would like to thank Ismail Aijazuddin, Naman Bansal, Zachary Greenberg, Rob May, Neha Patel, and Alex Sozdatelev for their contributions to this article.

This article was edited by Elizabeth Newman, an executive editor in the Chicago office.

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How to Create a Profitable Healthcare Business Plan for Your Medical Practice

Healthcare Business Plan

Marketing is crucial for any industry, and healthcare industry is no exception. Whether you are a big hospital or private practice, creating and implementing an effective marketing plan will help to attract new patients, retain the existing ones and maintain relationships with your staff and patients. An effective marketing strategy will play an integral role in increasing revenue, building patient trust, improving online reputation and expanding your reach.

A healthcare business plan can help you define and identify the target audience and key prospects. It can also assist in evaluating and comparing your practice data against your industry. Clearly, a business plan is necessary, so does your practice have one? Here are some more benefits of creating a strategic plan for your medical practice:

  • Physician business plan provides clear direction to your marketing initiatives, preventing random activities that may work against each other.
  • The process of developing a strategic plan offers an opportunity for everybody involved to collaborate in shaping the future of the practice. Active participation of all the stakeholders ensures the success of projects and priorities.
  • A strategic healthcare business plan helps the physician set marketing goals and priorities for the medical practice.
  • Clarity of aims and objectives can improve the quality of patient care.

Strategic business planning offers great long-term value. After the initial planning is done, a practice can use it as the benchmark for measuring progress and monitoring areas of improvement.

The process for preparing a strategic business plan is not clear-cut, but it is one of the most important things you should do for the strategic growth of your practice. A well-defined marketing plan will outline how you will retain existing patients and attract new patients, retain staff and communicate your message in the most efficient manner.

How to Create a Profitable Healthcare Business Plan for Your Medical Practice

You do not need to hire expensive consultants to create a marketing plan for your healthcare practice. All that you need is the willingness to put in time and effort. An ideal healthcare marketing plan should address every aspect related to promoting your practice, and to effectively plan, you must do some research.

Business Plan for Medical Services

Identify your target audience

The first step in any business plan is to figure out who is going to seek your service. If you have a specialty practice, you probably know the answer. According to industry experts, your marketing efforts will be effective only if they are targeted. So to identify your potential patients, start by defining the common characteristics of your current patients. Always remember, your marketing plan is all about reaching your target audience and adjusting your approach to fit their preferences. Beyond demographics, try to learn the reasons why your potential patients will come to your practice, know your competition and understand your competitors’ approach in reaching the target audience. Examine how your competitors market their practice and then compare their approach, services and marketing strategies with yours. You must also determine your unique selling proposition and understand what makes you different from your competition.

Marketing is all about keeping up-to-date. So make sure while doing your research, you stay updated on current affairs. The idea is to keep up-to-date with financial, political and marketing trends that influence the medical community so you can create an effective business plan that responds to changing market conditions.

How to Create a Profitable Healthcare Business Plan for Your Medical Practice

Time for some brainstorming sessions

After you have identified your potential market and patients, you will need to categorize and address critical operational questions about your medical practice. You may need to set up brainstorming sessions with people you trust, including family, friends, team members or other professionals. During these sessions, try to find answers to these basic but critical questions:

Question: Which marketing platforms will make be most suitable for promoting your services?

Pro tip: You will need to think regarding how to present or sell your services. For instance, consider offering packages that are generic in nature and offer value for money.

Question: What is the best time and frequency of marketing your service?

How to Create a Profitable Healthcare Business Plan for Your Medical Practice

Pro tip: Too much promotion can create a negative brand image in the minds of potential patients. Too much advertising tends to make patients suspicious. So depending on your target audience, determine the best time for promoting your practice.

Question: What are you trying to achieve from your business plan? How do you plan to measure these goals?

Pro tip: According to experts, your marketing plan should include basic tasks that have short-term goals so that you do not end up compromising on the patient experience. You can consider using big data to evaluate and measure results and their impact on ROI.

Penning the business plan

Now that you have completed the groundwork, it is time to put all your facts and figures into words. Here are some basic steps for creating a business plan for your medical practice:

How to Create a Profitable Healthcare Business Plan for Your Medical Practice

  • Define your mission and vision: This is where you need to determine your goals. You have to understand where you want your practice to be in five to seven years. You will need to prepare a list of all the marketing techniques and tactics and determine what options will work best for your practice. Some of the effective marketing tactics are networking, direct marketing, print advertising, training sessions, media, open houses, social media, blogs, third-party websites and much more.
  • Identify your team: In order to build support and generate enthusiasm, you should determine the outgoing personalities in your organization. Find people who will help support your marketing efforts by hosting open houses, patient training sessions, interviews and other public relations initiatives.
  • Market segmentation: Consider potential patients think outside the box. Look within your organization first – you may find some of your best customers and marketers there. You must understand where your patients come from and dive deeper into your business model. Is your practice mainly run by physician referrals, or do patients refer directly? You need to create an extensive list of potential patients and categorize them.
  • Create patient personas: Patient personas are representations of your ideal patients. You must create patient personas based on your research and reflect on their needs and issues. For instance, if one of your buyer personas is a diabetic, his or her needs will be different from a flu patient.
  • SWOT analysis: SWOT matrix is another important component of the business plan. You can use this analysis to assess your practice’s strengths, weaknesses, opportunities and threats. This study will help you understand your market situation better and discover growth opportunities. For a successful SWOT analysis , you must be specific, realistic, compare different situations and keep your business plans and goals updated.
  • Prepare a budget: Now that you have all the market information you need and have established the best way to reach your potential patients, focus on your budget to support your marketing campaign. To begin with, it is advisable to stick with the 80/20 rule. According to this rule, 80 percent of your business volume will often come from 20 percent of your patients.
  • Share your vision: The first step is to make sure the plan is received and understood by your organization’s leadership. Next, make sure your plan becomes a part of the organizational culture. You must encourage employees to come up with ideas that will support your idea. Always share your plans with physicians, volunteers, employees, board members and top leadership.
  • Plan the rollout: To begin with, introduce your campaign internally. Your organization’s leadership and staff are often your best support. If they get the message, your marketing efforts will be successful.
  • Measure and evaluate: You should regularly track new patients, physician referrals, leads, website hits and procedure volumes in order to assess the success of your business plan.

Physician Business Plan

Don’t forget the 7Ps

Even the most insightful services, supported by the best business plan, will not survive on the market if they are unable to reach potential patients. That is why practices need to invest in strategies that will bridge the gap between them and the target audience. For your marketing initiatives to be successful, you must address the 7Ps in order to evaluate and measure your business activities. These seven Ps are product, price, promotion, place, packaging, positioning and people. These 7Ps will help you review and define key issues that impact your marketing activities.

  • Product: When was the last time you took an unbiased look at your products, service, facility or value proposition? Do your products meet the needs of the patients? Do your products and services deliver value? Is your medical practice properly presented? The ‘product’ for your healthcare practice is the happiness and satisfaction of your patients, which is intangible and cannot be quantified. The only way is to know that customers receive value and comfort by way of your medical practice.
  • People: Healthcare is all about people – your current patients, potential patients, staff and management – everyone delivers or receives a service plays a significant part in the product category. Your patients will evaluate the service and satisfaction based on assumptions and interactions. Usually, patients do not have much insight to your medical skills, but they will know if they are pleased based on how you deal with them. Your reputation and your image are not yours alone – it is teamwork.
  • Price: It is the amount people pay in exchange for the product received. Therefore, the price must be competitive, enough to generate profit, but may vary when bundled with promotional offers. Sometimes, price is the biggest factor. Therefore, as a practice owner, you must take a serious look at those areas where there is flexibility and be open to adjusting and reducing prices to meet your patients’ needs.
  • Promotion: This refers to all the direct and indirect ways of communicating about your product to your people or potential patients. This may include personal and mass interaction. In all instances, promotion should always be carried out in a professional manner. The objective of promoting your practice is to examine how, when, what and where you can offer your service to your target audience.
  • Place: This points to presenting your products or services to your target audience in the right place and at the right time. Needless to say, the ‘place’ will be your office where the product will meet the user. However, in healthcare, a change in location can impact the user’s decision to buy.
  • Packaging: Take an unbiased look at the appearance of your office, front office, waiting area, brochures and website and the appearance of your medical staff. You might be surprised to see what patients are observing when they walk through your front door.
  • Positioning: This refers to the way your brand, products or service are perceived by your target customers. If you could get the opportunity to create the ideal impression in the minds of your patients, what would you want it to be?

For successfully growing their practice and attracting new patients, many practices are working with medical marketing agencies. As a medical marketing agency , Practice Builders knows what is suitable for different medical specialties. We can introduce you to the best marketing tactics that will draw new patients to your practice. Moreover, we know how to develop effective business plans that will lead to significant growth in your medical practice. To find out more, contact us today.

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Sharon Mason Parker

Sharon has spent 25 years building teams and developing people to work together to help improve the client experience in the markets we serve. This ultimately benefits both customers and staff equally. Sharing best practices and ideas helps clients and team members envision new alternatives, which is quite fulfilling when positive change results. Sharon enjoys working closely with clients to understand the true drivers that are affecting their business environment. By engaging clients in meaningful exploration of their goals and challenges, she often discovers that an issue they asked for help in solving is merely a symptom of something else or something greater. Solving the real issue through truly listening and not just addressing the symptoms helps create true partnerships with clients.

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How to Create a Successful Healthcare Business Plan for Your Medical Practice

How to Create a Successful Healthcare Business Plan for Your Medical Practice

It is a common misconception that healthcare practices do not require marketing strategies in the same way that other companies and professions do. However, healthcare should be treated as a business and cater to consumers, or in this case, patients.

A successful business plan is essential for medical practices to attract new patients, retain current patients, and maintain a positive relationship with the community.

Without a business plan, practices may find themselves disorganized, lost, and unable to adapt to any changes in business, such as decreased visits or increased appointment cancellations.

Why is a Business Plan Necessary?

Creating a business plan for your healthcare practice means laying out where you are now and where you want to be in order to fill in strategic goals and benchmarks needed to track progress. Without a finished business plan to rely on, healthcare practices will not have any insight or idea of their returns.

Additionally, the attracting and retaining of patients will not be prioritized or managed. Opportunities for improvement may get overlooked, revenue may not increase, and patient trust may be lost.

How to Create a Healthcare Business Plan

Clearly, a business plan is non-negotiable for healthcare practices. But where do you start? What should you focus on?

Most practices that put together business plans rely on these basic guidelines to get a head start. Keep in mind that any of these parts can be adjusted or changed according to what makes the most sense for your healthcare practice.

#1: Identify Your Ideal Patient

Healthcare practices are essentially promoting services to an audience, or, patients. Start identifying and defining your target audience by assessing who uses your services. Marketing plans should be developed with this target audience in mind in order to be effective.

If you have a wide range of patients varying in age, gender, etc., consider segmenting them into different, smaller groups or learn about what each patient has in common outside of traditional demographics.

#2: Define Your Vision

Solidify your goals by defining them in the largest business plan. Brainstorm and write down goals, significant milestones, and where you see the practice in 3 years, 5 years, etc. Document how you will achieve these goals and set dates for major milestones.

#3: Assemble a Team

It takes a village to run a successful healthcare practice, from the front office staff to third-party contractors. Take this time to document who will be involved with this business plan and to what degree.

Outline roles, responsibilities, and initiatives for each team member. Make sure to tie this all in with your overall vision. For example, if you envision a significant effort in social media marketing within the next year, define the role(s) that will be responsible for this.

#4: Build Patient Personas

When other businesses create their business plans, they often run an exercise to build “buyer personas.” These are essentially profiles that represent ideal customers , based on real data.

This exercise includes giving these personas creative and explanatory names, incomes, budgets, careers, and more, to help guide business and marketing decisions.

In healthcare, creating a patient persona works the same. Sit down with your team and create 1-2 profiles of your ideal patient. Give them a name, a medical condition or need, income, family status, personality attributes, etc. based on your actual patients. For example, a profile might look like this:

“Clever Cathy,” has diabetes, age 65, works in customer service, researches her conditions thoroughly/has lots of questions for doctors, makes 55k per year, has $500 to spend on care today, divorced, 3 kids out of the house.

Having these profiles on hand can help pull focus to your patient's needs during important business decisions.

#5: Perform a SWOT Analysis

Another tool to use for self-assessing your healthcare practice is a SWOT analysis . SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Draw a 2x2 grid labeled with these terms, and start listing examples.

When assessing your healthcare practice's strengths and weaknesses, consider everything from an internal perspective and what you have control over, such as unique services (strength) and only having one provider (weakness).

Writing out your practice's weaknesses helps you to place all of your thoughts for improvement in one clean list. Keep it strictly about what you have direct control over, such as long wait times or outdated appointment booking systems.

Opportunities and threats are both meant to be viewed from an external lens and are things you do not have control over but can either leverage (opportunities) or maneuver away from (threats). Opportunities can include things like new real estate in a better location, while threats can include things like loss of staff.

#6: Finalize and Share

Once you have a full business plan solidified, finalize it and share it with all physicians, staff, board members, executives, and any other stakeholders necessary.

Once everybody is on board, you can begin the rollout, enjoying the support from every team member along the way.

#7: Check-in and Evaluate

Sometimes, a plan that we thought would surely bring in 100 new patients falls flat. That's why it is important to establish a plan to check-in with your goals, benchmarks, targets, plans, etc. to see what is working, and more importantly-- what's not.

Adjust and change your plan as needed, making sure everybody is still in the loop. By measuring and evaluating your business plan consistently, your chances of success improve.

Don't Forget “The 3 Pillars of a Successful Healthcare Practice”

While assembling your new business plan, let's not forget the 3 pillars of a successful healthcare practice : a growing patient base, a stellar online reputation, and a strong online presence.

Keeping these pillars in mind for a detailed business plan, healthcare practices can increase patient acquisition and retention. Make sure to integrate these pillars into your marketing plan!

To conclude, healthcare practices must have a business plan in order to be successful and to keep growing. These plans, as you've seen, can get large and sometimes complicated.

For busy practices, hiring a marketing agency to help handle this plan is a must. It's important to find a healthcare marketing agency that believes in your business plan. This keeps everybody aligned so your practice can see success.

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Ajay Prasad

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COMMENTS

  1. Medical & Health Business Plans

    Looking for a free sample business plan for a medical billing, chiropractic, dental, hospital, or another health care businesses? You’ve come to the right place! If you’re looking to develop a more modern business plan, we recommend you try LivePlan .

  2. Next-generation business models creating value

    The future of healthcare: Value creation through next-generation business models. January 4, 2021 | Article. (12 pages) The healthcare industry in the United States has experienced steady growth over the past decade while simultaneously promoting quality, efficiency, and access to care.

  3. Healthcare Business Plan, Business Plan for Medical Services

    A healthcare business plan can help you define and identify the target audience and key prospects. It can also assist in evaluating and comparing your practice data against your industry. Clearly, a business plan is necessary, so does your practice have one? Here are some more benefits of creating a strategic plan for your medical practice:

  4. Health insurance for businesses

    Health insurance for businesses. Offering health coverage is a major decision for your business. When looking for a plan that fits the needs of your business and employees, you should carefully consider things like the cost to you and your employees, and the health services covered.

  5. How to Create a Successful Healthcare Business Plan for Your

    Creating a business plan for your healthcare practice means laying out where you are now and where you want to be in order to fill in strategic goals and benchmarks needed to track progress. Without a finished business plan to rely on, healthcare practices will not have any insight or idea of their returns.