Back to Business as Usual? Managing the Disruption of 2020
By Dr. Adam Roggia, PT, MS
The effects of a worldwide pandemic on business and—particularly—the health care industry have been enormous.
Nearly every market sector has required adaptive change to continue to provide services, supply inventory, and drive revenue. While the pandemic is not over, it is not too early to identify key strategies and innovations that will allow physical therapy practices to embrace the inherent disruption of this and future challenges to make long-term gains.
This year is predicted by several market sources to be a strong and healthy year for health care businesses.1 Some believe that the back-up of deferred or elective medical procedures will lead to an influx of patients ready to take full advantage of health care practices as normal conditions return. Eventually the pandemic will end, and many in physical therapy practices seek a return to “business as usual.” But should your business aspire to return to “business as usual” when approaching this new market environment?
Innovation Leads the Way
In his December 2015 Harvard Business Review article “What is Disruptive Innovation?,” Clayton Christensen reviews 20 years of his theory and discusses the difference between disruptive innovations, which are typically considered inferior by most of an incumbent’s customers, and sustaining innovations, which make good products better in the eyes of an incumbent’s existing customers. These different types of innovation require different strategic approaches.2
While dealing with the initial effects of COVID-19, many physical therapy businesses adapted and innovated in several ways. Many clinics expanded telehealth options; engaged in renewed and targeted health, cleaning, and sanitization practices; enhanced their social media presence; and, in some areas, initiated significantly increased direct-to-patient marketing to maximize direct access. In some areas, gyms were closed completely, sending a wave of new patients into physical therapy clinics where they otherwise would not have obtained services. The physical therapy field adapted quickly and, as a result, was able to stay relevant and accessible.
The New Opportunity
Although many innovations were occurring within practices, many additional substitutions for physical therapy emerged. These disruptors included mobile gym instructors, group fitness meet-ups, stretching spaces, and video platforms, all which began when their core brick-and-mortar businesses were deemed “nonessential.” Some of these services offered easier access and reduced cost, quickly becoming a substitute for traditional physical therapy. In addition, a new group of consumers emerged, including quarantined or remote workers, workers who previously had jobs but now have reduced income, college students without work or attending online classes, those on reduced benefits including health insurance, and those now unable to afford physical therapy or receive its services due to health restrictions or community guidelines. While it will certainly take time to see how substitutions will have a lasting impact on these consumers in upcoming years, it would be unwise to dismiss potential disrupters completely, because many of these new consumers may eventually become fully satisfied with their potentially more convenient, lower-priced, and “good enough” product.
In the face of these potential disrupters, Christensen indicates that incumbent practices should respond, but not overreact. Adaptation to changing market conditions is always required to retain and expand core physical therapy business, even without these disruptors. Refocusing on business strategy, strengthening relationships with referral partners, and developing improved products and services to enhance core business operations continues to be the best course of action. If conditions are desirable, incumbent businesses may create divisions or departments (separate from the core business) to potentially take advantage of the growth opportunities offered by the new markets.
While we all seek an end of this pandemic soon, the long-term economic impact will continue to last for several years. To take full advantage of the potential 2021 offers, practices should review their current structure, organizational hierarchy, and relationship with core consumers. It is then vital to make necessary changes to ensure each practice has a long-term strategy that is sustainable, profitable, and high-performing against future changing conditions and disruptors.
1Nagarajan S. JPMorgan says the S&P 500 could surge 25% in 2021 – and lists 6 sectors poised to outperform next year. https://markets.businessinsider.com/. Published December 10, 2020.
2Christensen CM, Raynor ME, McDonald R. What Is Disruptive Innovation? Twenty years after the introduction of the theory, we revisit what it does—and doesn’t—explain. Harvard Business Review. https://hbr.org/2015/12/what-is-disruptive-innovation. Published December 2015.
Dr. Adam Roggia, PT, is a board-certified orthopedic specialist, MBA student, and director for Texas Physical Therapy Specialists and Sports Medicine Associates of San Antonio. He can be reached at email@example.com.