Even thriving aesthetic practices should reflect on what worked and what didn’t in 2018 and determine what needs to change to improve in 2019.
Planning, says aesthetic practice consultant Glenn Morley, is a key to business success.
“Good is never good enough because [aesthetic practice physicians] understand that the medical-aesthetic marketplace is dynamic and competitive,” says Morely, who is a senior consultant in plastic surgery and dermatology at BSM Consulting.
Annual business plans for practices often include three main components, according to Morely: the financial plan or budget, marketing and organizational improvement plans.
Entwined in the traditional business plan’s building blocks are specific considerations for aesthetic medicine practices in 2019. Those 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, according to Joe Niamtu, III, D.M.D., an oral and maxillofacial surgeon with a practice limited to cosmetic facial surgery in Richmond, Va.
In a BSM blog about planning for 2019, consultant Andrew Muller writes the budget includes:
- Sitting down with each physician to determine his or her expectations on scheduling
- Patient visit targets and compensation goals
- Upcoming capital expenditures
- Staffing and compensation
- Predictable changes in operating expenses, such as rent adjustments
- Changes in fee schedules
The budgeting process is not a numbers game one should play behind closed doors; nor is it about shifting budget numbers from 2018 to 2019, according to Morely.
Rather those responsible for planning the practice budget should first take a step back and analyze how the practice functioned budget-wise in 2018, Morely says.
“Where were we overbudget and where were we underbudget and why? How accurate was our forecasting? And together with the stakeholders in the practice ask what we will need in 2019. Hardware? Software? Training? Development?” she says.Whether practices spend hard-earned dollars or make substantial time investments in marketing, the end of the year is an opportunity to determine which marketing efforts did and didn’t meet expectations.
Morley recommends adjusting and, in some situations, cutting marketing, advertising or promotions that fell short on their expected return on investment. Ask marketing partners, vendors and other experts about changes that could lead to better results from marketing in the new year, she says.
Organizational improvement planning starts 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 because of a lack of provider training, for example, that training should be part of the plan in 2019, Morley says.
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, according to Morley.
As organizations grow, change might be necessary.
At the same time, the changing of the guard doesn’t mean a previous leader isn’t or wasn’t valuable. It might simply be that person doesn’t have the time to devote to an evolving practice or the experience necessary to deal with an increasingly complex healthcare environment, according to Morley.
Practice leaders should also ask such questions as:
- 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,” Morley says. “Operations must be built for provider and staff efficiency and also make things as easy as possible for our patients.”
Aesthetic practices that rely heavily on neuromodulator and filler injections, as well as minor skin tightening and rejuvenation with devices or minimally invasive treatments, will likely see more competition from nontraditional providers in 2019, according Dr. Niamtu.
“You have traditional cosmetic injectors or cosmetic physicians and surgeons and then you have spas, family practice, nurse practitioners and others,” Dr. Niamtu says. “The competition from nontraditional injectors is going to start 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 it that patients will pay a premium for their services.
“Even people with money will drive a little further to save $60 on a Botox injection,” Dr. Niamtu says. “You don’t necessarily want to combat that by lowering your fees, but you really have to figure out what your advantage is to retain your patients.”
Dr. Niamtu says that the beginning of 2019 will be a time of reflection about what’s hype versus what works. The reflection should happen before a practice decides to budget for and invest in a new, expensive device in the coming year.
“We’ve seen a lot of new minimally invasive technologies introduced — Kybella (deoxycholic acid, Allergan), microneedling, energy devices. They’ve been out long enough now where they’re either sinking or swimming,” he says.
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.
Dr. Niamtu says that 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.
Dr. Niamtu, whose practice is 80% surgical, says he enjoys facelift, eyelid lift and other aesthetic surgeries more than doing injectables. The surgical part of his practice is well established, consistent and offers a high profit margin, he says. That allows him to do fewer injectables, which he says are the least profitable aspect of his practice.
“One of the perks about getting older and having a mature, successful practice is you get to pick and choose a little bit,” Dr. Niamtu says.