What the 80/20 Rule Can Reveal About Your Dermatology or Medical Aesthetic Practice
May 26, 2023
Many physician owners know the practice’s total revenue. Fewer can immediately identify which services produce the strongest margin, which marketing efforts bring in the right patients or which recurring problems consume the most owner attention.
The 80/20 rule offers a way to examine where results and workload are concentrated.
The numbers in your practice may differ from an exact 80/20 split. The value comes from identifying which parts of the business have the greatest effect on revenue, profitability, staff time, patient experience and owner involvement.
Which Services Deserve More Space?
Begin with the services and products offered by the practice.
Review revenue, direct costs, clinician time, staff support, room use, equipment requirements and the likelihood that the patient returns for additional care.
A service can generate significant revenue while using a disproportionate amount of time or producing a weak margin. Another may generate less revenue per appointment but fit the schedule well, require fewer resources and support a longer patient relationship.
Revenue alone does not show the full value of a service.
Once you understand the complete picture, you can make better decisions about schedule availability, marketing support, staff training and future investment.
Which Services Are Creating Work Without Enough Return?
Some services remain on the menu because the practice has always offered them.
They may require specialized supplies, additional training, equipment maintenance or more administrative support than their performance justifies. They may also create scheduling complications without contributing enough revenue or patient retention.
Review which services are rarely scheduled, frequently discounted or difficult to support operationally.
This does not automatically mean they should be removed. It tells you which services deserve a closer review before more time or money is invested in them.
Which Patients Build the Strongest Relationships With the Practice?
The original article referred to these patients as “big spenders.” Spending is only one part of the relationship.
Look at the patients who return appropriately, follow through with recommendations, refer others, respect practice policies and use more than one relevant service over time.
Then examine how those patients found the practice, why they chose it, which parts of the experience they value and what keeps them returning.
Use those patterns to strengthen the experience for more patients. The goal is to understand which relationships support the practice over time and what the practice is doing well for those patients.
Which Marketing Efforts Produce the Right Patients?
A marketing channel can generate attention without producing scheduled or completed appointments.
For each channel, trace what happens after the inquiry. Review how many people schedule, complete the visit, move forward with a recommendation and return to the practice.
Also consider the cost of the campaign, the staff time required to manage the inquiries and the revenue and margin connected to the resulting appointments.
This gives you a clearer basis for deciding where to continue spending, where the message needs to change and which efforts should stop.
Which Problems Consume the Most Owner Attention?
The 80/20 review should include your time.
Track the questions, decisions and problems that repeatedly reach you. A small number of issues may account for a large share of your interruptions and follow up.
Look for patterns. The same staffing question may return because authority is unclear. A scheduling issue may continue because the appointment template no longer reflects what happens during the visit. A patient concern may escalate because staff do not know who should respond.
Correcting one recurring problem can reduce work across several parts of the practice.
Use the Findings to Make Fewer, Better Decisions
Choose the area where the concentration is clearest.
That may be a service consuming more resources than expected, a marketing channel producing weak appointments or a recurring operational problem taking too much owner time.
Confirm what is happening, decide what needs to change and assign responsibility for carrying it through. Then review the result before moving to the next area.
The value of the 80/20 review is knowing where to look before making the next decision. It helps physician owners direct attention toward the services, patient relationships, marketing efforts and operational issues that have the greatest effect on the practice.
Ready to Strengthen Your Practice?
If your practice is busy but you are unsure which parts of the business are producing the strongest return, I can help you identify what deserves attention and make sure the most important work gets done.
Connie Kurczewski is the founder of Elevated Practice Consulting and Strategic Advisor to Dermatologists and Aesthetic Physicians. She advises physician owners on staffing, leadership, operations, marketing, sales and patient experience.
