Staff turnover and falling profits. How I increased profits in a large medical center by 115%. Business case

The story, to be honest, is not simple. The fact is that the owner firmly believed that the business processes were built correctly and did not understand the reasons for the fall in profits for several years in a row. Experienced doctors and staff were hired at the medical center, the most modern equipment was purchased, but something did not work out …

This case is written Alexander Bachinsky (mentor of the business mentors search service United Mentors), who from 2018 to 2021 provided consulting for a medical center in Siberia.

Alexander Bachinsky

mentor

And what happened?

The first, and most important, in my opinion, reason is that the owner forgets that he increases sales, reduces costs, and, ultimately, satisfies the demand of the consumer – the employee. Sales, costs, quality of services depend on the employee. The owner needs to understand that the effectiveness and productivity of the company’s work by 60-70% depends on the working atmosphere in it. And if employees are not loyal to their company, then all the initiatives of the owner will perish in the bud.

Given

Medical center specializing in ophthalmology. It has been operating for more than 20 years in one of the largest cities in Siberia. The business has become particularly high margin after the abolition of income tax for private medicine. The services provided by the center are considered to be of high quality among consumers and are based on 3 principles:

  • High-quality world-class medical equipment;

  • Doctors of the highest category with a long work experience;

  • Adaptation after treatment is important.

Problems of the medical center

Since the owner puts the professionalism of doctors at the forefront, he makes every effort so that “everyone lives happily ever after.”

But at the same time, there was no organizational structure, vagueness in the division of responsibilities, the main powers are concentrated entirely in the hands of the owner, who is a stupor (bottleneck) in the normal life of the organization (delay in decision-making). The processes of interaction within the center have not been worked out. The motivation system for the head of the center and a number of key employees does not contribute to the achievement of the organization’s goals. At the same time, the owner competently and invested a lot (finance, equipment) in the creation of this center.

The image of the company in the labor market is such that despite the repeated attempts made by the owner to expand the staff of doctors, no one has gained a foothold in the state.

As a result, any changes proposed by the owner are blocked, a toxic environment in the team leads to a high turnover of staff and an extremely low level of the image of the medical center as an employer, which ultimately leads to a serious, and most importantly, stable decrease in revenue while the owner expects a multiple increase.

Project objectives

In 2018, I was hired as a business mentor with a consulting focus to solve 2 big problems:

  • Increase and stabilize revenue in the basic medical center

  • Through the systematization, description and implementation of business processes of 20 years of experience in the basic medical center, open a branch in another region

Briefly about the work process

Conducting management diagnostics (“clinical approach”) and analysis of the company as a provider of ophthalmological services and as an employer gave the following results:

  • A change plan was drawn up, approved by the owner, and its implementation began. The change plan was made based on the results of the management diagnostics of the enterprise (UDP, “clinical method”). This is a 4-column table: Problem, Suggested Solution, Expected Effect, Lean Type of Waste, includes all areas from management to organization location with root cause analysis (cause after which the problem does not reoccur) and how to solve it . A plan was also drawn up for the new medical center, including the replacement of the executive director and the hiring of additional doctors.

  • When working with employees, a variant of treating an employee as a person with his own, including personal tasks, which he achieves by fulfilling his work tasks to achieve the company’s goals (joint-vector approach) according to the formula: useful-profitable-achievable.

  • Employees were explained their tasks to achieve the company’s goals, necessary actions, criteria for evaluating work.

  • The organizational structure of the new medical center has been developed, which includes 4 new areas: the urological department, the rehabilitation department, the traumatology and orthopedic department, mamology, the otorhinolaryngological department and, in the future, the gynecological department.

  • All employees have been transferred to piecework pay.

  • Organizational changes affected, first of all, the position of the executive director. A new Executive Director was hired (selection from over 40 candidates) .

  • Daily work with the executive director as part of business mentoring led to the implementation of plans for revenue, search, hiring, adaptation of employees. What exactly was done: — training, soft-skill standardization; — planning, budgeting, setting tasks for employees, monitoring their implementation ;- preparation and holding meetings with employees,- work with objections;- formation and work with management reporting;- resolution of conflicts with employees;- search, hiring, adaptation, career growth of employees and explanation of the constituent processes and their importance); the basics of lean manufacturing) their application in the work of the manager and the medical center; — control of all business processes on my part and feedback to the executive director on the work of administrators (analysis of calls from clients, setting KPIs, etc.)

  • A healthy atmosphere (mutual respect and trust) and competition began to appear in the team. Training began to be perceived as a necessary tool to increase patient satisfaction and achieve personal goals of the medical center employees, processes with the prefix “self” (independence, self-learning, responsibility) began to work partially.

  • A list and format of management reporting has been drawn up and approved, work has begun on implementation.

Project results

Stage 1. (2018 – 2019)

  • The volume of services in the basic medical center was increased by 18.3%.

  • A branch was opened in another region with access to the break-even point within 3 months;

  • In order to reduce the loss of time and minimize the possibility of information distortion, the recording of information about the medical admission of patients was automated through the creation and implementation of software.

Stage 2. (2021)

  • Increased revenue by 12% in the base medical center.

  • Increased the conversion of incoming calls of the contact center by 35%.

  • The branch’s revenue increased by 115.6% (without an increase in the cost of services).

  • Starting work on the opening of a new branch has been carried out.

Summary

Since I believe that employee loyalty (satisfaction) is the most important element of business performance, it is necessary to constantly strive for its growth. It is the loyalty of employees that makes it possible to reduce staff turnover, significantly increase their motivation, and, of course, improve the quality of services for customers. And here are the basic principles that I have successfully used in this project:

  • Clarity of assigned tasks.

  • Transparency in interaction.

  • Clarity and fairness in payment.

  • Consistency in training and professional development of employees.


Alexander Bachinsky – business mentor on the United Mentors platform.

United Mentors is a personal mentor search service. Here are gathered real entrepreneurs from different countries with a turnover of 10 million to 2.5 billion rubles, who are ready to share their experience.

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