As we enter a new year, now is the time for all of us, even thriving aesthetic practices, to reflect on the highs and lows of 2018 and determine what changes can be made to improve in 2019.
According to Glenn Morley, a senior consultant in plastic surgery and dermatology at BSM Consulting, planning is key to business success.
“Good is never good enough because [aesthetic physicians] understand that the medical aesthetic marketplace is dynamic and competitive,” Ms. Morley elaborated.
Annual business plans for practices often include three main components, said Ms. Morley: A financial plan or budget, a marketing plan and organizational improvement plans.
In a recent BSM blog post about planning for 2019, consultant Andrew Muller stated that the creation of an annual budget requires a few actions:
- Determine scheduling expectations for each physician in the practice
- Assess patient visit targets and compensation goals
- Estimate upcoming capital expenditures
- Determine staffing and compensation
- Calculate predictable changes in operating expenses, such as rent adjustments
- Establish changes in fee schedules
“The budgeting process is not a numbers game; nor is it about simply shifting budget numbers from 2018 to 2019,” Ms. Morley stated.
“Instead, those responsible for planning the practice budget should start by taking a step back and analyzing how the practice functioned budget-wise in 2018,” she continued.
Key questions to ask yourself include, “Where were we overbudget and where were we underbudget, and why? How accurate was our forecasting? And together with the stakeholders in the practice, determine what you will need in 2019. Hardware? Software? Training? Development?”
Whether practices spend hard-earned dollars or make substantial time investments in marketing, start the new year right by determining which marketing efforts did and didn’t meet expectations.
Ms. Morley recommends adjusting, and in some situations, eliminating the marketing, advertising or promotions that fell short on their expected return on investment. Ask your marketing partners, vendors and other experts about changes that could lead to better results from your marketing efforts in the new year.
Organizational improvement planning begins with looking back and determining how to better meet projections and goals in 2019.
For example, did the treatment devices purchased last year meet projections? Why or why not?
If a practice determines that a device purchase didn’t meet projections due to a lack of provider training, for example, that training should be part of the plan in 2019, Ms. Morley noted.
Organizational improvement also involves self-assessment at a leadership level to determine whether the leader or leaders met the needs of the organization at that upper-most level, Ms. Morley added.
As organizations grow, change might be necessary.
Nonetheless, a changing of the guard doesn’t mean a previous leader isn’t or wasn’t valuable. The situation might simply be that the individual doesn’t have the time required to devote to an evolving practice or the experience necessary to deal with an increasingly complex healthcare environment, Ms. Morley expressed.
Practice leaders should ask the following:
- Does the management structure, the managers, and the way that managers are managing meet the needs of the organization?
- Are the goals of the organization reflected in the goals of each individual team?
- Were we focused on the right goals? Did we set and attain operational goals last year?
“At this time of year, I ask my clients to not just look at operations from a functional standpoint, but also to think in terms of operations as meeting our patients’ or customers’ needs,” Ms. Morley emphasized. “Operations must be built for provider and staff efficiency, while also making things as easy as possible for our patients.”
Specific to aesthetics
Entwined in the traditional business plan’s building blocks are specific considerations for medical aesthetic practices in 2019. These include preparing for increasing competition, taking a hard look at devices and treatment options that over-promise and under-deliver and balancing enjoyment with profits, said Joe Niamtu, III, D.M.D., an oral and maxillofacial surgeon with a cosmetic facial surgery practice in Richmond, Va.
Aesthetic practices that rely heavily on neurotoxin and filler injections, as well as minor skin tightening and rejuvenation with devices or minimally invasive treatments, will likely see more competition from non-traditional providers in 2019, he speculated.
“You have traditional cosmetic injectors or cosmetic physicians and surgeons and then you have spas, family practice, nurse practitioners and others,” Dr. Niamtu elaborated.
“The competition from non-traditional injectors is going to dilute a lot of procedures that are bread and butter for subspecialists. That’s something that you need to plan for – whether you’re planning for it by making yourself more competitive price-wise, service-wise or marketing-wise.”
Traditional providers shouldn’t bank on patients paying a premium for their services.
“Even people with money will drive a little further to save $60 on a Botox injection,” Dr. Niamtu indicated. “You don’t necessarily want to combat that by lowering your fees, but you really have to figure out what your advantage is in order to retain your patients.”
According to Dr. Niamtu, the beginning of 2019 will be a time of reflection about what’s hype versus what works. This reflection should happen before a practice decides to budget for and invest in a new, expensive device.
“We’ve seen a lot of new minimally invasive technologies introduced – Kybella (Allergan), microneedling and energy-based devices – and at this point they’ve been on the market long enough to know whether they are sinking or swimming,” he pointed out.
Dr. Niamtu’s advice: Separate the hype from outcomes and make sure the services and devices you offer are in line with the outcomes you promise.
While new practices might have to offer a wide range of services to get more patients through the door, more experienced aesthetic physicians can increasingly focus on doing more of what they like to do, while maintaining a profitable business, he continued.
For Dr. Niamtu, whose practice is 80% surgical, this includes facelifts, eyelid lifts and other aesthetic surgeries, rather than doing injectables. The surgical part of his practice is well established, consistent and offers a high profit margin, he asserted. This allows him to do fewer injectables, which he said are the least profitable aspect of his practice.
“One of the perks of having a mature, successful practice is you get to pick and choose a little bit,” Dr. Niamtu shared.