Practice Tip Videos : Episode 5

This video explains how we can learn from the Pareto Principle, otherwise known as the 80:20 Rule.



Hi, my name is Wayne Mahmoud from CPD Health Courses, bringing you today’s practice tip. Today’s practice tip is all about the 80/20 rule, otherwise known as the Pareto Rule. And we’re going to talk about how that applies to us as Manual Therapists. How does that affect the things that we do and, more importantly, gives us some lessons as to what we should focus on? For example, did you know that 80% of the outcomes that you get from treating your patients come from only 20% of the things that you do? So that’s a pretty frightening relationship isn’t it? That means that 80% of the the things that you’re doing right now that you’re doing to your patients, or in your practice generally, don’t produce any meaningful results. So how can we change that? Well, let’s go back, and look at how this rule arose, and where does it come from?

Well, in 1906, a fellow by the name of Vilfredo Pareto, who was an Italian economist, observed that there was an unequal relationship between input versus output. It wasn’t true that if you put 100% in, you get 100% out. That didn’t happen, there was an 80/20 rule. In fact, what he found was that 80% of your outcomes came from 20% of the causes. That’s a pretty interesting relationship. And he actually observed that in terms of the economy in Italy at the time. He found that 80% of the land was owned by only 20% of the people. Why was that? Well, the 80/20 rule applies here. So how does this apply to us? Let’s have a look at some examples in our practices right now.

I want you to think about the types of patients that you’ve got, and the percentages of patients that you have in your patient group that perhaps don’t turn up to their appointments, they repeatedly cancel, or the no-shows, the ones that take forever in an appointment itself. they take a very long time, they want more explanations, they want more paperwork, they want everything written out for them. Who are those patients? If you have a look at those, they probably amount to 80% of the work that you need to do to run your practice. And they’ll probably amount to the 20% of your total patient group. So 20% of your patients are actually causing you 80% of the extra work that you have to do to run your practice.

Let’s have a look at another example. Whether you work in a practice or own one, have a look at the people who work in that practice with you, or you employ. Who are the top performers in that practice? And how many of them in comparison to the total number of practitioners, is it 20%? Are those 20% the top performers? Are there 20% of practitioners in your practice that bring in the most goodwill, are always busy, bring in the most revenue, bring in the most new patient referrals? Are they the top performers and are they 20% of the total number of practitioners in your practice?

Here’s another one, what about looking at the percentage of information, and techniques, and knowledge that you’re using everyday in your practice, as a comparison to that amount that you learned when you were training as an undergraduate? Is it 20%, are you only using 20% of the techniques that you were taught when you started your training? Are you only using 20% of the knowledge that you had to learn, and spent hours revising and memorizing when you were training? Are you only using 20% of that? Have a think about it. Let’s have a look at dollars and cents now, your budget. Your budget may be for something like advertising and marketing in your practice. What amount do you spend on bringing in new patients and making your community aware of what you do? That has a dollar value. And if you think about the Pareto Rule here and apply it here, then we could say that only 20% of your budget is producing 80% of your results. That’s a pretty frightening statistic because it actually now means that you’re wasting 80% of that budget. It’s not producing anything at all.

Within any practice, there’ll always be a certain group of patients who will always refer patients back to you. And they’re the same people, and I can guarantee it will probably work out to be 20% of your total patient group are sending you back referrals. They’re saying how fantastic you are, and sending other people to see you. 20%, that’s all, not everybody. And you probably know who these people are straightaway. You can probably reel the names off the top of your head right now. So the examples are many.

And I think we can go on forever doing this 80/20 rule and apply it. And it’s going to make sense to you, I hope. But what’s really important now is to find out which is the 20%. Who are the 20% of those patients that are referring new patients? Which are the 20% that are causing you the 80% of extra work? Who are the 20% top performers in your practice? That’s the important thing. You have to know these things in order to succeed and avoid mistakes. Stop concentrating on the things that are not actually providing you a return. Because that’s a waste of your time, waste of your energy, and probably a waste of your money as well, which is really important.So how do we find out who the 20% is? What is that 20%? Obviously it depends on which part, which aspect we’re looking at in our practice. But if you look at, say, the technical skills that we use every day, why don’t you make an audit of the skills that you’re currently using right now, and list them? Once you’ve listed them, rate every skill out of 10, 10 being something that provides you a lot of return, you’re really good at it, and it’s very commonly used in your practice, by you. You will find that you can knock off 80% of those skills and come to the point where you’ve only got 20% of the original list, and they’re the ones that you should focus in on, maybe the ones that are giving you an 8 out of 10 consistently in terms of results, and you’re using them a lot. That’s what you should be focusing in on, rather than trying to do lots of things really well. As we said before, we are focusing in on just a few. So only a few, those are the things that you should focus in on, the 20%. Which are going to provide you with 80% of your return. It’s a great return on investment when you know this rule.

Okay, summarizing now, what’s really important here is to focus in, to become really granular about your techniques that you’re using, the skills that you have right now that are producing you the 80% of results, the greatest return on the investment. And that’s going to make you a lot smarter than the next person. And that going to give you a shortcut to achieving mastery, and excellence in everything that you do, rather than trying to be a jack of all trades. That’s really important, and that’s what we’ve learned from the Pareto Rule, or the 80/20 rule. Apply it to other things as well, and let me know how you go.

That was today’s Practice Tip, brought to you by CPD Health Courses. I’ll see you next time.

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