Projects, Projects, Projects!

 

What should we do first?  How can we prioritize?

 

So, how do you sort out all of the things you would like to do in your practice?  For example, the new ICU you've been dreaming about, adding the meeting room you've always wanted, or even hiring additional specialized employees to improve your client service operations. 

 

Referral practices are very dynamic places, with many new and ongoing projects.  Almost every change or improvement can be classified as a project whether it involves an equipment purchase, a process improvement, facility improvements, developing training programs, etc.  Essentially, projects are complex, non-routine, one-time efforts that involve utilization or your practice's resources (personnel, time, money, etc.).  The goal is to find an effective method for choosing the project(s) with the greatest overall benefit to the practice at that time.

 

Once you have identified your list of project ideas, develop some project selection criteria that will help you determine which project  would be the best use of resources.  Project selection criteria can be divided into two categories, financial and non-financial.  Of course, individual criteria within these two categories can vary widely. 

 

Financial criteria:

These can include very general profit considerations such as expense reduction, new revenue generation, or improved existing revenue collection.  There are also much more sophisticated financial aspects that could be considered such as internal rate of return, net present value, hurdle rates, etc.

 

Non-Financial criteria:

These would include things such as non-financial strategic objectives (improved employee retention, for example), focus on mission statement (high quality medical care, high quality client service, employee development opportunities, etc.), and so on.

 

You can customize these criteria to fit what is important to your practice.

 

Next step is to develop a system to score each project idea against each of the chosen criteria.  For example, your rating system could look like this:

 

2 = large positive impact

1 = some positive impact

0 = no impact

-1 = some negative impact

-2 = large negative impact

 

Once each project idea has been scored according to the chosen criteria, practice owners and management can then do an initial review of the project ideas and associated scores, eliminating any ideas that result in an overall negative score (or impact).  Using the project ideas with a positive impact score, they would then look at the overal viability of each of those projects.  The selection criteria/scoring system should not be used alone to make decisions.  It should be used as a guide, keeping in mind all relevant issues such as business performance, environment, economy, etc.

 

Some things to keep in mind:

 

*Weighted scoring systems can be used as well.  For example, if your pratice wants to factor in non-financial criteria but would like to place priority on financial criteria, you can weight the financial criteria more heavily in your scoring.

 

*Financial criteria seem to be the preferred method for evaluating projects, but they do not account for other strategic reasons for project selection such as differentiation, developing core competencies, enhancing brand recognition, employee development, community development, etc.  Also, utilizing non-financial criteria helps ensure that chosen projects are in alignment with the practice mission and strategic goals.

 

In summary, during these tough economic times it is especially important to carefully evaluate all use of practice resources, and hopefully the steps above provide you with some ideas to help you make the most effective decisions.  Best wishes on all of your future projects!