Denver-based food chain, Chipotle, has fallen on hard times. The company’s stock, which rose 16-fold between January 2009 and the summer of 2015, has been scythed by 36 percent since mid-October 2015, vaporizing nearly $8 billion in market capitalization. The company projects that same-store sales in the first quarter of fiscal 2016 will fall between 8 and 11 percent compared with the same period a year ago.
Infected food has damaged their brand and stock analysts are wondering where the bottom will be. The medical tourism industry seems to be suffering from the same disease.
Every business faces risk. That is particularly true for sick care. For example, 4% of patients end up with a hospital-acquired infection. There is a 4-10% chance your doctor made the wrong diagnosis. For hospital employees, things are dangerous too. Healthcare workers had the highest injury rates of almost any industry in the country in 2011, costing the industry $13.1 billion and more than 2 million lost workdays,
If you run a sick care business, take some time to learn from Chipotle and ask yourself these questions:
1. Are your employees stealing money from you because you have inadquate internal financial controls?
2. Is your data and patient data at risk from cyberattack?
3. Do you have adequate commercial insurance and disability insurance?
4. Do you have enough personal liability inrance?
5. Have you practiced fire drills or what to do if there is an act of God that strikes your workplace?
6. Do your employment policies and procedures conform to regulatory and accreditation standards.
7. Are there dangers lurking in your offices or physical plant, like malfunctioning exit doors or fire extinguishers that don't work?
8. Are people trashing your reputation on the Internet?
9. Are you experiencing "high loss ratios" i.e. people stealing things from your office?
10. Can someone steal your identity? Here are some ways to prevent it so you don't have to spend 600 hours to restore it.
If you are trying to get an idea to patients, there are even more risks to address:
1. Market risks
2. Intellectual property risks
3. Business model risks
4. Execution risks
5. External environmental risks
6. Legal and Regulatory risks
7. Technical feasibility risks, inlcuding IT security risks
8. Competitive risks and threat of substitutes
9. Financial risks
10. Currency exchange risks
There are some risks you can mitigate and others you can't. But, as the saying goes, $100 million in prevention is worth billions in cure. Sickcare is trying to get their heads wrapped around that one too. Bugs are bad for business whether it's sickcare or software.
Arlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs at www.sopenet.org