Qualicare’s “5 Forces” (after Michael Porter)
Some of you may have heard or read about the Harvard Guru of Business in Medicine, Michael E Porter and his “5 Forces” analogy for the Medical Profession.
In essence, he describes 5 elements which will influence your ability to conduct a successful General Practice, and reduces them to business terms for you to plug into your daily practice running and administration.
The 5 Forces which Porter describes so well are:
- Threat of new entrants
- Supplier power
- Buyer power
- Availability of substitutes
- Competitive rivalry
Let me ask for 5 minutes of your time to read how the GP/FP fits so snugly into this analogy
THREAT OF NEW ENTRANTS
Barriers to entry into General Practice are notoriously low. You can enter General Practice in RSA having just graduated from medical school, with a stethoscope and a tendon hammer and little else. Many of our older colleagues probably did just that! This causes massive competitive rivalry and often oversupply in certain areas, whilst distant areas are chronically underserved. (The CON tried to address this in a ham-handed and idiotic manner and was stopped in its tracks. You cannot force
doctors to work in areas which are in-hospitable, you have to REWARD them for it, INCENTIVISE them into it…..)
Previous generations of Family Practitioners paid vast sums for goodwill, but the trend today is to pay a minimal goodwill figure, and take over the chattels of the doctor at a nominal price or, just squat nearby his existing practice and pick up the overflow, disgruntled patients, passing trade, and within 6 to 9 months you have yourself a fledgling General Practice.
Remember however that when you want to sell it, it will be similarly affected by new incumbents at that time and you will probably not be able to command much of a price unless, of course, you have diversified your practice and offer something which is a cut above the rest, for example special interests in Geriatrics, Paediatrics, Occupational health, Aesthetic medicine, Bariatrics etc.
You can however offer something else, which is much more powerful, namely Customer Satisfaction through:
- QUALITY OF SERVICE ( You, your rooms and their comfort and convenience factor , your staff and their patient interaction)
- VALUE FOR MONEY (one stop shopping experience)
- PERSONALISED SERVICE (knowing your patient well, birthday and condolence cards, visiting in hospital, attending family celebrations and bereavement)
- PATIENT FOLLOWUP ( Regular reminders for checkups, postoperative visits, house calls)
- EMPATHY ( This need not take a lot of extra time but is worth a fortune)
- TIME KEEPING ( Seeing your appointments on time and not taking phone calls during a consultation)
- AVAILABILITY ( offering telephonic access to you at set times and returning all calls before the end of the session)
Family Practitioners are notoriously at the mercy of managed care companies, drug companies retail pharmacy poly-chains, specialists, hospitals and life assurance companies.
Every one of these groupings can influence the throughput of a general practice and each modality can act both a source of patients, as well as represent competition to you, for patients.
The MCOs can be a huge source of new patients if you are on their “lists”, like FOG (Friends of GEMS) ((we won’t talk about their dismal payment record right now as we are busy addressing this with them)), having your practice accredited through the IPA Foundation approved accreditation documentation, or scoring well on Peer review.
Life assurance companies have their “chosen” doctors and can act as a major source of revenue, provided that their patients are exposed to the types of service expected by these clients, failing which they can move large potential groups of patients with one stroke of the pen. Remember that a well performed life assurance medical examination often converts into a new patient.
Traditionally hospitals and specialists relied on YOU for their referrals. With the advent of new medical aid plans permitting direct referrals to specialists and with the advent of 24 hour units run by the hospital groups, both of these groupings are now competing with you for patients. They can however NOT compete with you meaningfully on price because your ability to deliver cost effective treatment is far better than theirs. Conversely, the mere presence of a hospital in your practice drainage area, makes your practice more sought after and gives you a potentially larger patient base.
The power of the drug companies has effectively been addressed by the Single Exit Price (SEP) regulations. Their lavish dinners, launches, overseas trips to special clients etc have also been terminated through their own industry imposed Code of Conduct. Pity that certain of the smaller generic companies do not fully abide by this code as well, some of them are still out there offering blatant perverse incentives to the profession. Report such activities to your IPA immediately!
Retail poly-chain pharmacies are probably the biggest threat to the GP in that they are trying to muscle in at Primary Care level and take over the management of chronic diseases like diabetes and hypertension. Amazingly though, they will sell medication to a diabetic or hypertensive patient and then watch them purchase salty chips and chocolates which they display temptingly in the check out queues, whilst the patient washes his medicine down with a cold Coke!
This is the power of the patient to vote with his feet and wallet, if he does not experience the elements I mentioned under the “Threats of new entries”, above. Without them, you are as good or bad as your last consultation , as vulnerable as your receptionists tantrums, and as objectionable as the old magazines and the uncomfortable chairs in your waiting room and as unappealing as your washroom without adequate hand-washing facilities and a disposable towel to dry your hands.
Putting the shoe on the other foot, your group advantages are huge if you used the Special Offers negotiated by Qualicare. We offer you dedicated wholesalers, waste disposal groups, banks etc because of your group importance. Many of you however do not even use our stationery, or visit our website, or spend time with our reps who are armed with valuable special offers, group deals, and invaluable knowledge about schemes and Managed care requirement availability. Why?
AVAILABILITY OF SUBSTITUTES:
Homeopaths, Acupuncturists, Sangomas, Herbal medicine specialists, Bach flower remedy therapists, Colour therapists, Body stress release specialists, Chiropractors, Ayuvedic practitioners, Traditional Chinese Medicine, the list is never ending .
Closer to your Western medicine teachings, Nurse Practitioners who are rapidly absorbing the infant vaccination patients, as well as much of routine paediatrics, are a huge source of attrition of our younger patients whilst doctors practising beauty therapy and other forms of Aesthetic medicine soak up the available cash from your patient’s pockets.
Each and every one of these modalities impact upon your patient’s pocket, their ability to pay their sick fund, medical aid, or cash saving account, to pay you.
Whatever you belief in alternative medicine etc, the bottom line is that Preventative Primary Health Care remains the cornerstone of the Family Practitioner and the availability of substitutes erodes this central function.
You need to study your suppliers of alternative service, emulate their good points, and highly criticise and expose their weak points and turn them into your strengths.
Family Practitioners are in fierce competition with one another. This is essentially healthy and dynamic, “the best man wins”. In this competitive arena however you need to able to demonstrate Quality and Cost efficiencies. You have to display value for money. All the comments made in above paragraph on the “Threat of New Entrants” ring true for the competitive rivalry scenario in which GPs / FPs find themselves. Sometimes however it is a “win at all costs” psychosis which makes you sign every last “ ël cheapo” contract without first doing your sums to see if the contract is financially viable for your practice , or working out whether by signing it , you are effectively subsidising the administrator of the plan.
For the GP/FP to remain competitive is essential , and is the cornerstone of the IPA Foundation’s endorsed contracts, which are open to all willing providers, IPA aligned or not. Competition is enhanced by the patient seeing value for money, transparency and efficiency.
Peer Profiling, Peer Review. Practice accreditation , Restricted access to specialist and GP\FP preselection are the essential elements to the IPA Foundations interactions on your behalf with the funders who share our commitment.
The future of medicine in RSA rests with efficient, effective, affordable, transparent and available GP/FP Primary Preventative Care.
Hopefully the National Department of Health will someday begin to underscore our view, sometime soon, before it is too late and we are relegated to the rank of “has-beens”.