These may or may not be real issues for your practice, but each one, and scores more, both similar and dissimilar, but impacted my clients over the years. 

What changes are in store for you?

As Nels Bohr, Nobel laureate said, prediction is very difficult, especially about the future.

But just because it's difficult doesn't excuse you from attempting to do it, from attempting to protect your profits and guard against significant business setbacks.

A Bit of Background

I've written in earlier issues of the Advisory e-Alert about the important distinction between planning and strategic thinking.

Planning suffers from the initial defect that it is based entirely on an extrapolation from the present. This differs from strategic thinking which is based on envisioning a future and then designing the strategies and tactics to, in essence, have that future pull you toward its accomplishment.

Planning's second major defect is that it is based on the inherent assumption that the foundational facts underlying the plan will remain the same. For example, that the hospital will never close, that the payor mix cannot change overnight, or that regulations won't instantly gut $1.2 million from this year's bottom line.

But life isn't that simple, and scenarios such as, and very different from, those cited above happen and must be included in the development of your group's overall business strategy.

Low probability but high impact

In essence, a Scenario Survey involves identifying as many possible scenarios, that is, as many possible "worlds," of the future, as possible. It's a hunt for your own black swans: events that, no matter how low their probability of occurrence, pack the potential for high impact.

For example, for a hospital-based group doing business at only one facility, the odds that the facility will be physically destroyed by a natural disaster are low, but the impact of that event would be disastrous to your practice.

The purpose of the Scenario Survey is not to simply indentify scenarios or to judge the odds that they might occur and to estimate the damage that would result. No matter how well one is at playing this game, it would be impossible to identify all of the possibilities, to assign probabilities to their occurrence, to value their impact and, therefore to assign a meaningful valuation to the risk.

Instead, the purpose is to identify classes of underlying trends, issues and questions and then to assess the development of group strategy so that it remains valid in as many possible future classes as possible.

The more scenarios a strategy would survive in, the more robust that strategy is, and, therefore, the more likely that the strategy will serve you well. Alternatively, a strategy that survives only in one possible future, the more fragile and prone to failure it likely will be.

The Scenario Survey is a valuable tool in the development of group strategy. Its use strengthens strategy and therefore strengthens the odds of your group's success.