Where Do We Go

Where do we go from here? Round 1 of competitive bidding is in place and we are facing Round 2. After what seems a lifetime of study, trial programs and launches by CMS, it is finally a reality that we in the industry need to accept; now it is time to develop a growth strategy around this “trend.”

There are five key elements of a marketing strategy: 1) target markets; 2) products/services; 3) distribution; 4) pricing; and 5) promotion. The “marketing strategy” is itself part of a larger “business strategy,” which is comprised of the marketing strategy, operations strategy and financial strategy.

Regardless of your company's situation with current or future competitive bidding, it's time to reexamine your marketing and business strategies. We will look at each of these elements, but first, let's take the pulse of your business.

Step 1: Take Your Business Pulse

Pull out your key financial information and examine it, then answer these questions:

1. What was our net revenue growth over the last three years? Will it continue? If not, why not? Did we lose market share in competitive bidding — or will we? Are there other factors affecting our revenue growth?

2. What should be the plan for growth over the next three years? Can we grow at market rate? (It was at 10 percent before competitive bidding; I expect the number to flatten in the low single digits over the next few years. Remember, the bulge of baby boomers hits in 2012, so demand will be up and pricing will be compressed. It will take more widgets sold to equate to previous revenue, unless, of course, you find a new revenue source.)

3. Now take a look at where your net revenue is derived. Break it out like this:

   • Net revenue by payer type;

   • Net revenue by customer type; and

   • Net revenue by product/service line.

   • You can get fancy and analyze this further (e.g. sleep apnea, managed care, pulmonologists).

   • If you can't get this exact information out of your system (which is obviously ideal), then estimate it. And take a look at it by sales territory if you have more than one territory in your business.

   • From where exactly is the net revenue being derived?

4. Once this information is completed, stand back and see what you have. Does your current strategy work? Will it continue to work to get you the growth you wish to see in your business?

5. If the answer is yes, then continue it.