A world-class orthopedic practice affiliated with a large private hospital had dominated a regional market of one million residents for a number of decades. The hospital counted on the practice for a large share of its admissions at a time when most surgery was performed on an inpatient basis. Changes in the local healthcare environment were creating uncertainty for the hospital, and its administration insisted that the orthopedic practice participate in a strategic planning initiative. Subsequently, a comprehensive assessment of the practice and its position in the market was carried out.

When it was time for the planning staff to present their “state of the practice” report, the executive team expected to hear what a successful and profitable operation they were overseeing. The executive team was surprised to hear the results of the strategic analysis, which revealed the following:

• The practice had become isolated in the traditional medical center, while much of its population had moved to the suburbs.

• Competing practices with less skilled surgeons and poorer reputations were capturing the growing suburban population because of their convenient locations and superior customer service.

• Competing practices were early adopters of new outpatient techniques, while the practice continued to emphasize inpatient procedures.

• A market had developed for sports medicine and elective surgery, but the practice was excluded from this market by more entrepreneurial providers.

• The clinic’s practice of assigning patients to surgeons based on the preferences of the practice rather than those of the patients was viewed negatively.

• Long-established referral networks—primarily among surgeons who had trained at the clinic—were no longer effective, and the clinic’s graduates had increasingly established competing practices in the surrounding area.

Questions 

1. What prompted the implementation of an in-depth assessment of this successful specialty practice?

2. What were the results of the strategic analysis?

3. What were some of the unexpected findings from the assessment?

4. How did the practice respond to this information?

5. What was the long-term impact of the practice assessment?