Health and Life Best Practice Indicators and Superclinics
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HEALTH AND LIFE’S BEST PRACTICE INDICATORS The 12 Key Elements for Building a Successful Investment Grade & Socially
Responsible Practice Overall Objective - To leave a legacy and not a liability.
© Health and Life, 2007
Practice Foundations Must Offer Certainty
Reward for Investment & Performance
Built to Last Vision
Positive
Self-Empowered Leadership
Giving Back
Patient Happiness
Staff Happiness
Solid Practice Infrastructure
Accountability & Transparency
Financial Stability
Ownership Stability
Inter-Generational Appeal
‘Recognize that there is a need for change’
3 yrs
“We”
Investment Model 0 yrs
“Me”
Liability Model
Sub-Optimum
Optimum
HEALTH AND LIFE’S BEST PRACTICE INDICATORS The 12 Key Elements for Building a Successful Investment Grade & Socially
Responsible Practice Overall Objective - To leave a legacy and not a liability.
*Essential Criteria © Health and Life, 2007
Health and Life’s Best Practice Index – Will it attract tomorrow’s doctors? This is a quick self evaluation test for practice owners. Practice’s that successfully recruit and retain doctors, the right attitude is single and most important factor that sets them apart. Why? The Medical Observer article “On my Own Terms” reports interest in practice ownership is up. Our client who was featured in this article successfully recruited and sold a practice interest to a young doctor. People are surprised to learn we can on average sell a10-15% interest in a general practice for $300,000 with no golden hand cuffs. This debunks a traditional myth “general practice is worth nothing”. To find out how our clients did it read on …… As a practice owner your ultimate goal is to eat well and sleep well. If you own a practice you must be able to: 1. sell your practice for a fair value without golden hand cuffs 2. make it work for you and not the other way around 3. choose to come to work and you do not need to come to work Your overall objective should be to leave a legacy and not a liability to the community you serve in. How? In our Best Practice Series we rank and certify practices into 3 categories from highest to lowest. By achieving an investment grade status or higher you should be able to achieve the above goals. We use the matrix below called Health and Life’s Best Practice Index – 12 Key Factors for establishing a successful investment grade practice. The 3 rankings are: Rankings Blue Chip = exceed 11 out of 12 items.
HEALTH AND LIFE’S BEST PRACTICE INDICATORS The 12 Key Elements for Building a Successful Investment Grade & Socially
Responsible Practice Overall Objective - To leave a legacy and not a liability.
*Essential Criteria © Health and Life, 2007
Investment Grade = > 9 out of12 Investment Grade Potential = less than 8 out of12 A practice restructure maybe required to achieve these results - it is a process and not an event. Normally it takes 2-3 years to see the final result although immediate benefits arise by embarking on this journey. Where to From Here? To test whether your practice is an investment grade practice ask yourself do you confidently pass the key objectives in the matrix below? If you cannot then a practice restructuring process may be what is required. All of the stated objectives can be achieved by a change in attitude in the owners attitude towards their own practice. The right attitude is the number one factor we have noted about successful practices in Australia. Contact us on 1800 077 222 or email [email protected] if you want to be certified by us or for practice sale purposes. Alternatively decisions about whether to amalgamate, retire or corporatise are some other options worth considering. After all there is no point in throwing good money after bad.
HEALTH AND LIFE’S BEST PRACTICE INDICATORS The 12 Key Elements for Building a Successful Investment Grade & Socially
Responsible Practice Overall Objective - To leave a legacy and not a liability.
*Essential Criteria © Health and Life, 2007
Status
Objectives
(Order of Priority)
Best Practice
Pass Needs Improvement
1. Positive Self Empowered Leadership
Practitioner Owner Attitudes – • Can do attitude • We not Me and Committed
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2. Built to Last Vision* • What is your purpose? • Owners agree on what they want
to achieve in the next 5 years (One page bullet point strategic plan).
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3. Inter-Generational Appeal* • Mentoring and Peer Support • Work life balance • Can it be sold to the next
generation? • Investment v Liability model – will
you be better off becoming an owner? Is it clear?
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4. Reward for Investment & Performance*
• Clear business case - Passive v Personal Exertion Income.
• Profit sharing model rewards owners for risk and effort.
• Balance required between “Eat what you kill” v “Earn while you sleep.”
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5. Practice Foundations Must Offer Certainty*
• People pay a price for certainty. • Implement optimum legal and
business structure. • Simple and easy to understand
structure. • All necessary legal
documentation signed. • Sound asset protection. • Easily sold for a pre-determined
and fair value. • Tax friendly.
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6. Ownership Stability* • >4 owner practitioners – 60%
under 55 y.o. • or “Friendly Lock In” key provider
recruitment and retention strategy.
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HEALTH AND LIFE’S BEST PRACTICE INDICATORS The 12 Key Elements for Building a Successful Investment Grade & Socially
Responsible Practice Overall Objective - To leave a legacy and not a liability.
*Essential Criteria © Health and Life, 2007
7. Financial Sustainability* • Operating Profit Margin >25%. • Return On Investment >30% p.a. • Exceed industry averages. • Ability to service and repay loans. • No unstructured debt or debt free.
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8. Accountability* & Transparency
• Strong clinical and accounting systems and procedures.
• Meeting statutory & quality assurance compliance obligations.
• Easy to understand monthly and annual reporting of financial and non-financial key performance indicators.
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9. Solid Practice Infrastructure* • Excellent systems (including intellectual property), modern and reliable IT system.
• Infrastructure well appointed plant and equipment and premises.
• Regular major re-investment every 5 years.
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10. Staff Happiness* • “We” not “Me” culture – good staff morale.
• Formal organisational structure – encourages delegation.
• Regular principal and staff meetings.
• Minimum annual 360 degree staff surveys where staff assess management.
• Min. bi-monthly external and internal staff training.
• Rewards and recognizes high productivity and initiative
• Staff turnover < 10% p.a. • Promote work/life balance.
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11. Patient Happiness • Quarterly surveys and implement
changes • Patient Fee Growth > 16% p.a. • Embraces community health
programs • Ensure access to an affordable
high quality range of services
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HEALTH AND LIFE’S BEST PRACTICE INDICATORS The 12 Key Elements for Building a Successful Investment Grade & Socially
Responsible Practice Overall Objective - To leave a legacy and not a liability.
*Essential Criteria © Health and Life, 2007
12. Giving Back • Activities that embrace and reinvest in the local community beyond clinical responsibilities
Remember a plumber only gets paid when the problem is fixed. Medicine is a unique profession, it is an honour, privilege and a responsibility and not a right – there is a time to say thank you if your local community has made you successful. It is important to leave a legacy and not a liability for your community
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