Understanding the external forces at play in a practice management setting can feel like trying to juggle while riding a unicycle, but with the right tools, practice managers can confidently navigate the challenges
CREDIT: This is an edited version of an article that originally appeared on Top CV
A practice environment extends beyond the office space and clinical operations. It encompasses the internal and external factors that affect how the practice functions. These factors are constantly evolving and can significantly impact the success or challenges a practice faces in achieving its operational and service delivery goals.
Environmental analysis is a process for determining how a practice can operate effectively and achieve its goals. It involves identifying the key factors that impact performance, such as local and national healthcare policies, which shape the broader regulatory and societal landscape, legal requirements and environmental factors.
It also examines the potential impact of things like changes in healthcare funding, technological innovations, regulatory guidelines, competitive pressures from other practices and shifting patient expectations or demographics that could affect the practice’s ability to meet its objectives.
For practice managers, conducting an environmental analysis is highly beneficial. Analysing the external environment helps practice managers anticipate potential challenges, assess the effectiveness of current resource allocation and make informed decisions about the practice’s future direction. The best place to start is by defining the influencing external environmental factors surrounding the practice and the healthcare landscape.
Influencing Environmental Factors
General: Economic and social issues that universally impact practices include government regulations, technological advancements in healthcare and societal norms related to patient care, such as expectations around quality standards, accessibility and diversity in services.
Specific: Unique elements that directly relate to a particular practice include factors such as competition from nearby practices, the practice’s patient population, local community needs and relationships with suppliers or partners (e.g., pharmacies, medical equipment providers).
Uncertain: Future-shaping factors that are hard to predict and often external, requiring practices to adapt, include changes in government funding for healthcare, evolving patient attitudes toward care delivery, potential changes in national health policies, or global health crises such as pandemics.
Utilising the PESTLE Model
PESTLE is an acronym that stands for Political, Economic, Sociological, Technological, Legal and Environmental factors. Each category provides a framework to analyse the external factors that can influence your practice. By considering each of these elements, you can create a comprehensive understanding of the external forces at play.
To complete an analysis, practice managers need to gather data on each of the six categories and identify the trends or issues that are most pressing for the practice. Evaluate how each factor will impact the practice’s operations, growth and ability to meet its goals. This will allow you to make informed decisions about the practice’s direction and strategy.
Conducting a PESTLE analysis in the context of environmental analysis allows practice managers to better understand how external factors can influence their strategic decisions. By focusing on these external influences, practices can identify opportunities, anticipate challenges and adjust their approach to meet both immediate needs and long-term objectives.
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