strategic planning case study.

The Challenge
A large medical group practice experienced five straight years of significant losses in profitability after it was acquired by a third party entity. The practice's overhead was approximately 90%, it was taking an average of 189 days to collect a claim and more than 45% of the dollars outstanding were at least 120 days past due . In addition, the practice had extremely high turnover as a result of no teamwork, lack of accountability or inappropriate human resource compliance.

The Solution
The following initiatives were utilized to improve the financial and operational performance of the practice:

• Recommended and facilitated the buy-back of the practice from the third party entity
• Provided interim CEO and Director of Operations to formulate an organizational structure
• Implemented an employee appraisal program to identify and retain skilled staff
• Recruited sub-specialty physicians to capture revenue which was otherwise being referred to other practices
• Reengineered business process design to accelerate cash flow
• Purchased real estate to expand practice and ambulatory surgery center (ASC) operations for increased marketshare

The Results
As a result of implementing the above initiatives, the practice achieved the following results over the ensuing five years:

• Decreased overhead from 90% to 56%
• Reduced days in accounts receivable to 45 days
• Increased revenue by 46%
• Increased net distributable income by 261%
• Reduced staff turnover to less than 5%