From strategic planning to financial analysis to marketing plans, there’s a lot to know about how to position and operate a successful medical practice. Because of the vast, yet specialized scope of services that business consulting is used for in private practice medical clinics, we believe the due diligence process to be extremely important to identifying a consulting firm that will provide medical practices with the most appropriate consulting services available. We’ve found the following criteria useful in evaluating the expertise and resources available from business consultants in this area, and we recommend that they be used if you are considering such services:
1. Always request a non-disclosure agreement (NDA). NDA’s should outline the way in which information you share with the consultant may be used, as well as what is prohibited. Medical practice consultants are exposed to some of the most intimate details of financial structure, marketing strategy, and referral networks, and this information must always remain confidential. NDA’s aren’t difficult to produce, and if a consultant doesn’t have one, or doesn’t want to use one, this is a red flag.
2. “Try before you buy.” Medical practice consultants should have a plethora of knowledge in many areas of business and private practice, and it shouldn’t hurt to give some helpful information away for free. I personally like to make sure that clients not only get a feel for the core competency of our services, but that they get a feel for our personality and way of doing business as well. Good client-consultant relationships are very close and require a good working relationship, so if you aren’t 100% comfortable with your consultant or consulting firm, you probably aren’t going to have a great experience.
3. Check references. Always, always, always check references. As stated above, there is a lot to know in the world of medical practice business consulting, and knowing what you’re getting upfront is difficult unless you really do your homework. Checking in with references provided by the consultant is a good way to do this. Also know that consultants will naturally guide you toward those clients that have had an especially good experience with the consulting firm, so it is also prudent to set some of the criteria yourself. Asking a consultant for references in a certain geographic location, or that have received a specific area of consulting service (e.g., marketing strategy, brand development, financial projections, business planning, startup, etc.) is a good way to lessen the selection bias of the consultant.
4. Know the deliverables. Understanding the expectations are key to finding value in the services provided by a medical practice business consultant. Even the best consultants that provide services that weren’t contracted for or that provided unclear value come away with disappointed clients. In the proposal or statement of work provided by the consulting firm, make sure you understand EXACTLY what will be provided, how the process will work, and all of the fees associated with the project. If you like all of the above and it is delivered by the consultant, chances are you’ll be a satisfied client.
5. Understand the fee structure. Medical practice business consultants are generally paid based on the time required to provide their service. As the scope of consulting projects can vary drastically, so can the fees charged to a client. A good consultant will be able communicate how fees are determined very quickly and very clearly to a potential client. It is typical for there to be a range of hourly fees associated with varying level of expertise required (e.g., legal and financial consulting will commonly dictate higher fees than projects that are more general in nature, such as marketing strategy or competition analysis), and fees will naturally be higher the more “hands-off” the client wishes to be during the project. Projects that require more data mining, research, concept development, and copywriting by the medical practice consulting firm will be more expensive than those in which the consultant is acting in more of an advisory role.
The criteria outlined above applies not only to medical practice consultants, but also to consultants specializing in dental practices, physical therapy clinics, optometry practices, and many other allied healthcare disciplines. Unfortunately, some of the smaller healthcare markets including small to medium sized medical practices sometimes lack the geographical availability of specialty consulting, and practices often employ the services of general business consultants. While in some circumstances this can work out well, the specialty nature of the medical profession often benefits most from the business expertise provided by specialty consulting firms, and always requires a high level of due diligence to find the right fit.