A few years ago I was working with a client on a special project at a nearby hospital. They had been hired to take over a major area of patient activity, and a team had been assembled to handle both the transfer of responsibility from the prior contract holder, but also to address a large number of deficiencies that had caused the change.
My client had talked to a number of physicians in the group and assembled a group based on prior experience in these kind of transfers, people who had a significant history with the group and in handling the touchy issues that always arise when a hospital makes big changes like this. Besides dealing with patient care issues, there were lots of minor political issues too.
The five of us assembled had never worked together but some were more familiar with each other than others.
Although we had a few meetings that were highly productive, our time together was compressed.
The client came up with a great idea—they hired a company that provided personality profiles to let us all get a better idea of how we would function together. What was our intra-personal dynamic going to look at? The results were highly illuminating: Some who I thought would be the best team players had a hidden, highly structured independence streak. Others proved to need a leader to function best. Finally, one of the most vociferous of the bunch showed to be painfully shy with people he didn’t know.
The results helped quantify and structure how the personnel would best mix and be assigned to help complete our mission.
Throughout all of this I kept thinking how much the definition of being a physician had changed over the last decade. Not one of the tasks we had touched a patient.
There was an article recently in the NJEM that took up the need for new docs have more exposure to what they called “business skills”—leadership, teamwork and data analysis.
Maybe every physician should take a personality test to see where they fit into all of the many new roles they are being asked to engage in (this excludes all patient activity). Especially since most of this new “business” of medicine is rarely compensated and can be a significant addition to the time spent away from a personal life.
Although I’m no psychologist, I was recommended one platform that looked like an excellent way to start with a personal assessment: The Enneagram.
This is markedly different from the personality test I took, going much deeper for a complete look that would work well for individuals, teams and organizations. The advantages of the individual analysis examine motivation, functional and dysfunctional behavior, compassion, and is focused on increasing productivity and motivation, among other characteristics. The emphasis is on self-discovery, personal awareness and personal discovery. The value to teams is in Enneagram’s emphasis on integration, re-channeling negative behavior, and establishing new avenues for communication. Impressive.
So much so I’d suggest Enneagram as one of the more important aspects of business skills NJEM addressed. It would certainly have relevance to new doctors and old alike, and could be a very valuable part of building strong teams within institutions or practices. Worth checking out.---TOM ELLIS
For graduating residents and fellows the word is out: There are not enough of you to fill the demand for physicians in this country, and this problem is only going to grow over the next decade. No matter what can be done in attempts to adjust this equation—better use of mid-levels, telehealth, the move from volume to value, new med schools opening—no significant change will alter this trend in the foreseeable future.
I recently received an interesting data sheet from the venerable recruiting firm Merritt Hawkins that plotted hospital inpatient/outpatient revenue generated by certain specialties. Not surprisingly, cardiovascular surgery led with $3.6Million, followed closely by invasive cardiology ($3.5M), neurosurgery (same). At the tail end of this list of ten were pulmonology ($2.4M) and non-invasive cardiology ($2.3M).
That’s a lot of downstream income.
Short story: Years ago I worked with two surgeons who had built a strong private practice augmented by an integrative platform that really captured all of their patients’ clinical needs (this was years before integrative had become the buzz word it is today). It was a huge success, almost pioneering for its time. Patient volume shot up.
The hospital really noticed. Soon, in an effort to insure this explosion of revenue, the hospital approached my docs about coming on board as employed physicians, we demurred and started to gather information. Soon we got a good estimate of the downstream net revenue these surgical procedures generated. The hospital was clearly surprised when we presented this data, and we used this number to negotiate salaries far greater than the MGMA income figures presented to us. In effect, we got a little piece of the bigger pie.
So how does all of this come together? There are some obvious touch points. First, in this world of diminishing hospital revenues, physicians with specialties that generate in-patient revenues are going to be absolute necessities for hospital success. Heads and hearts, ortho and gastro will continue to rule. And these types of doctors will be in great demand. Second, with the shortage of physicians growing annually, highly trained specialists will be in great demand. But it won’t just be them. All physicians will be in great demand.
So it this a forecast for the perfect storm, the moment when all these forces combine to give physicians, graduating residents and fellows a new strength and leverage in negotiating relationships with hospitals, ASCS, ACOs and even insurance companies? When doctors finally take back some of the power they’ve given up?
Some larger employers are already addressing this, creating multi-specialty groups where revenues are not just based on the old standard “eat what you kill.” They understand the value of recognizing and reimbursing physicians for their contribution to the total patient revenue picture.
For graduating residents and fellows, I believe the time is now. There is no need to act like a deer in the headlights when negotiating employment agreements. As the number of job offers they field grows from 50 to 100, they have the leverage to really examine potential employers and how they reimburse their physicians and negotiate with hospitals for a piece of the downstream dollars and see how they fit into all of this.
It’s an intriguing time, with many changes on the horizon. All docs should be watching developments, but especially graduates.---TOM ELLIS III
A few years ago I was called in to work with an OB having trouble with her landlord. A ruptured pipe in the suite above had caused extensive damage to her offices (they were flooded most of an entire weekend), and the damage—which included the typical wall/flooring soaking—had caused cabinets to begin to delaminate and done extensive damage to her wiring and IT systems. It was an insurance mess, complicated by her busy practice, and one other thing that I hadn’t known about in our early meetings.
Her often extremely hostile attitude.
She was great with me, cordial, funny, smart. I had known her a bit socially, and we always had good conversation. I had been told she “could be difficult”, but marked that up to a very typical complaint I often head about doctors.
Was I surprised.
Dr. Jane (pseudonym) ran her office with little “emotional consistency.” Hot, cold, angry, happy, nice, mean, reasonable, unreasonable: She could cover all that ground, often in the same day. The staff was paralyzed.
The simple issue of coordinating a complex insurance situation, involving her carrier, the hospital, and the tenant above morphed into a first, tense meeting. At the very start she lashed out at everyone and demanded not only “immediate” repairs, but restitution for downtime including payment for her staff who were unable to see patients, on top of her business interruption insurance. After the first 20 minutes I asked her to join me outside her office where I told her we needed to stop this meeting; to my surprise she said OK, we walked back into her office, where I asked for a postponement and she, much to everyone’s surprise, very cordially thanked the others for coming.
As I walked down the hall in her office I stopped to look at a wall of photos of her holding newborns in the delivery room. There was an almost angelic glow that surrounded her in those pictures, and when you could see her full face the smile thereon radiated joy. Clearly this was what she relished about her practice—the interaction with patients. Everything else was just a chore for her.
So over the next few weeks, as the repairs to her space began and patient flow got back to normal (she and I agreed this was something I best dealt with and I just provided verbal reports to her on most of the work being done) I was able to work with staff to try to build both bridges and barriers that would minimize the “emotional inconsistencies” and improve reporting and other processes to provide her with better ways to see what was going on in her practice, both financially and from an operations viewpoint. I beefed up the direct communication processes with her clinical staff so she got reports in advance on patient issues (especially post-partum). We looked at restructuring her patient flow with “OB days” and “Gyn days”, which smoothed out the schedule, increased her productivity, and almost eliminated patient wait times. This also opened up more time to chart, within the day, so she got home earlier.
The big challenge was the back office. The administrator, who wore a “deer in the headlights” expression on her face most of the time, was the place to start. We developed reports that provided a better snapshot of the practice billing and operations costs, revenues, and drew out a chart that detailed who did what, answered to whom, and protected the staff from her outbreaks. We also began to escrow cash (she always complained of being broke). It took a few months, and consistent pep talks with the staff to buy in, but they did.
And, of course, she began to change too. Her peace of mind was more evident. She smiled more. Slowly the relationship with her staff, and especially her administrator, became more based on the idea that everyone in the practice tried to support her real love—patient care—while minimizing stress that might be caused by operational issues.
Best, she started to develop empathy as she better understood how things worked, and the dedication of her staff.
Yes, there were still days when she went off, when her “emotional inconsistency” reared its head. But they were fewer and farther between, and the staff changed from being paralyzed to helping keep things on course.
The flood from above would require extensive repairs, and the after all the damage was dealt with she had what looked like a brand new office, which the patients loved. Simultaneously the repairs we made to her daily operations and overall practice management were smoothed out, improved, and resulted in a happier, more productive staff. To this day I’m still surprised at the way a bit of water damage could cause such a profound change in the way her medical practice worked.--TOM ELLIS III
A few years back I was running a healthcare company that was growing rapidly. Finding good physicians and nurses to handle the growth was a challenge—much of the market was dominated by a few big players who were also growing—but we had a great employment package and a new, state of the art hospital as our primary client/work environment. These among other things made us attractive. We also had high standards and a required work history that eliminated new grads or providers with less than 2-3 years of experience.
But over the growth years, in a tough seller’s market, we did find good people. Really good people. And we developed a streamlined on-boarding system that ran like clockwork under the direction of our practice administrator.
Then, it all fell apart. And not due to anything we did.
The large health system that owned our hospital client decided to consolidate credentialing, taking it away from its hospital members. The suits “downtown” decided it would be more efficient, and they would have more control over who was allowed to work at their facilities if everything was overseen in one office.
The years we had spent building a great relationship with our hospital credentialing office were over. The people we had worked with for years had been replaced by faceless names who worked out of an office 35 miles away.
And they were overwhelmed. Most of the individual hospitals had 3-4 people engaged in credentialing for the facility. The new office, with not many more people, now had over 30 facilities to credential.
And to make matters slow down even more, the background checks became much more comprehensive, meaning now you were also at the mercy of medical institutions that were being asked to locate and send information they had to pull from their files. And they didn’t have someone just standing around doing this job. More slow down.
What had been taking us a matter of weeks, now took months. Sometimes as much as 7 months. It was almost impossible for us to give prospective new hires real start dates, because we couldn’t get them from the main office. And to make matters worse, they mandated minimal use of temporary privileges which took away one of our options to get people working.
And this was just hospital credentialing.
Onboarding fell into disarray, and we started to lose a lot of good candidates because we had no control of this critical piece of the hiring process. Frustration levels were off the charts.
Credentialing may be one of the most overlooked headaches in the process of finding good hires.
It’s not just obtaining credentials to work at a hospital or ASC. Medicare can take up to 60 days, and only when you have Medicare in place can you apply for Medicaid, which can take another 60 days. Most of the private payers require you have your Medicare credentialing in place before they will credential you; the big players—Blue Cross, United, Aetna, Cigna, etc.—take time too, sometimes 60 days. Smaller payers can be better or worse.
And there’s little you can do to move the process along, other than be a VERY squeaky wheel. Without becoming obnoxious.
If you are part of a growing practice, looking to bring on new docs, NPs, APNs, etc., it would be wise to appoint someone within your practice to bone up on all things credentialing, developing a realistic timeline between start and finish of the process—Medicare, Medicaid, facilities, large payers and smaller ones as well. It may be the most critical piece of the onboarding process, and it’s surprising how few offices have a handle on it all.
It can have a significant impact on cash-flow, of course, but also an impact on new hire satisfaction and confidence in practice operations, not to mention the overall operations of your practice if your new hire is coming to replace a provider or take on a new line of business or patient growth opportunity.
Credentialing: You can’t live without it. Get control of this critical piece of growing your medical business.—TOM ELLIS III
I’ve worked with a lot of practice administrators (often in a job called “office manager”). What has always surprised me is the variety of roles they play in their practices. Some are highly focused on a few tasks. Others have tended to play a catch all role, with the physicians and providers constantly throwing new responsibilities at them, often with problematic results. I’ve seen great relationship, well grounded, and others where administrator frustration and burn out was almost guaranteed. It’s too important a job to be part of employee turnover.
Here, for example, is a list of the myriad of jobs expected to be covered by the administrator at one practice I’m familiar with:
Oversee IT—billing and EHR
Wow. All of this covered by one person???
And, of course, the doctors only want to pay $65,000/year for this position. With no benefits.
I won’t even address the salary issue here.
Suffice it to say as practice operational demands become more complex it’s time to reframe the hiring process for this key position. Focus on definition. IF you want to empower an administrator they have to know what’s expected and how the fabric of your practice fits together.
My first suggestion would be to make a list of tasks that you need covered. You could start with the list above—there may be more that are specific to your operation. For example you may have multiple locations, constantly need locum coverage, credential in-house, or retail products as part of your practice. This kind of operational overview and breakdown will be invaluable in many ways.
Treat each as a separate silo. Define what the administrator’s involvement will be in each. If you outsource billing, then just list what kind of reporting relationship the administrator will have with the physicians, as well as the role any physician might have with the billing company. Be sure to tie the administrator to each silo, with as much detail as possible. This is the kind of clarification that’s important to good communication from the outset.
For the tasks that are 100% owned by the administrator, take the time to go over each job requirement with the other physicians, your partner, and even the mid-level clinical staff members who will be interfacing with the administrator. Make sure everyone is on board with the job description and how the administrator will interface with them. It’s important who needs to know what he/she is doing, how much they need to know, and when they need to know. I’ve seen a lot of confusion generated because this wasn’t spelled out.
If you have existing relationships you want to leave as is, make this part of the job description, but clarify the administrator’s role, if any.
And don’t forget the future—how you want the practice to grow, change and evolve over the next 2-3 years. Growth requires planning; planning takes time away from other tasks. And usually the administrator is a critical part of coordinating growth.
Thinking through each silo will help you focus your own vision and awareness of your practice, possibly in greater detail than ever before.
(A note on Compliance: Outsource the set-up, working with a HIPPA consultant among others. This is an area where the complexity and requirements are varied and changing. Don’t expect your administrator to be able to handle this extremely important area without help from an expert.)
Now you’ve put together a comprehensive job description. When you interview address each silo. You may find a candidate who can’t personally handle every task within every silo, but has had experience outsourcing and knows how to work with vendors to accomplish what you need done. You’ll be hard pressed to find someone who can do everything, and you need to make a reality check as to what’s available on the job market, adjusting your want list around the best candidate you can find, and making adjustments to fill gaps. Just be sure to figure out who will be handling these tasks among your partners BEFORE you make the hire.
You want a new hire to understand what’s expected of them, but also feel empowered to be involved in operational issues and decisions. Fuel their self-starter attitude. Empower them through a clear outline of where they fit.
Pay a good, living wage. Good people, who you can trust and build strong relationships with aren’t cheap. If you look to your peers to provide salary comps, make sure you understand the scope of work their admin person is handling, then compare it to what yours is. And incentivize your new hire to do better, setting goals for them to achieve and be rewarded for.
And remember that there are literally dozens of training programs that can help improve and increase any administrator’s job skills. Given the constantly changing face of healthcare, the ROI on these is very high. ---TOM ELLIS
Managing clinical risks has always been a hot topic in traditional medicine. There is nothing that scares a physician or hospital like the smell of a malpractice action, and over the years the legal profession has fine-tuned the art of keeping providers out of the courtroom. A good healthcare lawyer can often be invaluable in monitoring the legal landscape to make sure that a practice is up to date in conforming with recent court rulings that might apply directly to the way providers interface with patients, hospitals and even their peers.
This form of risk management is highly sophisticated in traditional medicine. But that’s not the case in functional medicine. Most healthcare lawyers are unfamiliar with it. It seems every state has a different set of rules governing acupuncturists, chiropractors, nutritionists, nurse practitioners and many of the clinicians engaging in functional medicine. When it comes to NDs and MDs working in the field there is little legal case law that address their role and even less oversight from the states addressing them as functional medicine providers.
This kind of risk management is critical to your practice and its future. But with no guidelines, what can you do? Here’s a quick overview of some of the basics.
Research the state laws that apply directly to your specialty. Most chiropractors are already regulated, for example. Acupuncturists, too. But laws vary from state to state. Make sure you are in total compliance. Look to national organizations for advice and direction in this area. And if you are working with insurance companies and making claims for payment for your services, make sure that you are in compliance with everything they require so there will be no denials; make sure you see if the insurance companies require any particular limits of malpractice coverage, too.
Luckily there seem to be ample sources of professional liability insurance for chiropractors, acupuncturists and nutritionists. Even nurse practitioners and nurses.
If you are an ND, contact a malpractice company and see how and if you can secure coverage; there are more and more showing up. However, be sure to see what your state law requires, if any, and what the requirements are for insurance companies (if you are going to file claims). Did you graduate from a licensed school? That may have an impact on things. Check with the IFM. I would strongly recommend you insure yourself in a way that an MD would, with a policy with a “per claim” amount, a “total claims” amount, and secure one that has tail coverage. Monitoring the type of traditional coverage an MD has is a smart move.
If you are working with an MD, look at the coverage they have. In terms of the coverage, match it, so there’s consistency among the doctors in the practice.
If you’re an MD, you’ve already dealt with malpractice and probably know all you need to about coverage requirements. Regardless, talk with your professional liability insurer and make sure they understand the scope of your practice and that you aren’t paying for coverage you no longer need.
There are some more pieces of the professional liability situation that you need to make sure you address, too. Functional Medicine is built around collaboration between various providers and physicians. Make sure that everyone you refer to has professional liability insurance (have them send you the “face sheet” from their policy), and make sure it’s current and active. At least annually contact your governing body (IFM, American Association of Nurse Practitioners, American Chiropractic Association, etc.) and see if there have been any court cases that might want you to change reconsider the limits of your coverage; your liability carrier should have this kind of information, too.
Finally, document, document, document. Make sure your patient records are thorough and current. If you refer to other doctors or providers, make sure it’s part of the patient record, and for what reason. Make sure the patient clearly understands why you are making the referral, and if your role with them will change. Talk directly to the physician you have recommended about the patient and document the conversation. Then send a referring letter to the physician you’ve suggested and make sure to request an update on the patient after their visit. Follow up and document if the patient did or did not follow your recommendation.
This can be a bit of work. Risk management is a big subject, but extremely important to your future. Remember that although functional medicine is still working through many of these issues, if you follow the safeguards traditional medicine has developed you’re on the right path to protection.--TOM ELLIS
Over the years I’ve assembled many, many budgets for physician practices. Some of these were done for banks and financing, some as a footprint for new partners, some for one and three year plans for benchmarking growth and a variety of revenue and cost line items.
In assembling budget costs, I’ve always been surprised at the attitude taken toward the cost of front and back office staff. Most physicians have wanted to allocate the minimum amount of money for these crucial employees, taking the lower end of salary ranges as stated on various websites or as paid by their peers as the cost guideline.
Hiring these people has often been treated as a “not my responsibility” as the practice takes shape or reshapes itself to accommodate new physicians. The typical path seems to be hiring an administrator first (a subject of a future article) and then leaving it up to him/her to assemble the non-clinical staff. And usually this is done with little input from the physicians.
In every other small business I can think of the owner usually sets the standards for, and is involved in the hiring of the people who are the “face” of his business. They usually want to be part of selecting those who are the first to interact with their prospective customers, be it on the phone or in person. They spend an extra amount of time with these people.
Not generally so with most small medical practices. Since there’s no mission statement involved in most there’s no directive that sets the tone and starts the conversation about how to best handle patients and their families at the initial point of contact and beyond and what impression they want the practice to make on the public. In my experience if find most docs rarely get together with the key staff to discuss how they want their practice to present to customers, vendors, other physicians, etc.
So between a lack of a directive in hiring parameters, going cheap, and little involvement in who ends up being hired you can end up with some terrible social media scoring and negative comments that last forever on the internet.
So how do you assemble and direct a front office (and back office, who frequently deals with patient problems more than anything else) that will project the practice image you envision? A few steps to get you started:
But it has a huge impact on your medical business. Maybe equal to the clinical relationship you want to develop. It’s a high priority on the front end, and will continue to be every day. Don’t overlook it! –Tom Ellis
Last week I was on a webinar for an impressive new practice management system (or at least it was new to me). The software engaged so many important aspects of the needs of modern day practice management—great clinical reporting, impressive pre-certing, and even a robust billing platform that included working denied claims and the watchful eyes of certified coders to help check clinical coding and in-house billing quality.
Lots of these out there, I know. But what really struck me about this one was its interactive potential with patients before and after a visit. The presenter positioned this as a way to deal with patient forms, billing issues, and even made a slight reference to “enhancing social media.”
When I inquired about customer use of this feature, almost every customer example provided fell into one of the first two of these uses. Seems to me that there’s another use that is rarely utilized by physicians: Monitoring and evaluating your presence and effectiveness as a physician or provider.
We’ve all seen patient satisfaction surveys—they are generic, don’t solicit any detail, and usually deal with staff processes or personnel. They all are oriented to scoring that desired “95th percentile.” Frankly, there’s not much difference in what I’ve seen with medical practices and the surveys I get from Volvo after a service visit.
For years I ran an anesthesia company, and we suffered in this area because the hospital, in canvassing satisfaction among patients we treated, only included two questions about the level of service, and was only sent to a small sampling. Clearly, there wasn’t much information coming back to us, and one or two patients could throw us outside the desired “95th.”
I countered. We did our own, twice yearly surveys, via mail and email (copy to patients’ email and home addresses) and used a sample of not less than 100 patients drawn over the prior two month period. At least ten questionnaires were sent for each anesthesia provider. Questions were multiple choice, scale graded (1-5, 5 the best) and there were a couple that directly asked for comment. We routinely pulled a response in excess of 35%, which gave weight to the results.
I could have used the practice management system I was exposed to last week!
But we didn’t stop there. We also sent them to our equally important customers: The surgeons.
Not surprisingly, they responded in quantity, usually with no less than 7 0f 10 answering, sometimes in great detail. They were not afraid to layout their problems (with brutal honesty!!), or let us know when we did a good job.
These surveys were instrumental in helping us review and improve almost every aspect of the way we provided service to our patients and surgeons, and the hospital. They were the backbone of our culture, and paved the way for adjustments thereto. Your mission statement may be something like “to provide extraordinary care to patients”, but without a lot of feedback and constant review, how can you really define and live up to that oft-heard phrase?
There was one other thing these surveys did for us. They protected us from the vagueness of hospital surveys. We routinely shared our results with the hospital, along with our plans to improve deficient areas. And we monitored the latter and especially watched future surveys to see if patients reflected our efforts at those improvements. This was especially critical to our relationships with the surgeons, as you can imagine.
More next time on how important surveys are to new physicians and providers.--Tom Ellis III
Two physicians I am working with are leaving their employment with a large group, dissatisfied with the back office operations and billing situation. Years ago they had their own practice and did everything in-house. Now, three years later they want to recreate the practice of their past.
These docs are experienced and operated a successful private practice in another market before coming my way. After a lot of discussion it’s apparent they are not only strong clinicians who know what kind of support they need from their clinical staff, but also have the characteristics of good leaders who know how to motivate a small staff and engender a healthy “family business” type environment for their employees.
We’ve found them a great IPA to work with, one that provides good in-network rates and a slew of value added services and vendor connections to help make their return to private practice successful. In fact, we’ve only got one real issue to deal with.
Billing. What did you expect?
I’ve worked with a host of practices over the last ten years. Some billed in house. Some did that, but employed a certified coder to oversee things. Others used the latter to oversee outsourced billing, or were cash only. (And some were out-of-network, another Pandora’s Box of issues I won’t address here.)
Billing is always a hot topic with docs. I’ve met many that have felt no person or company could collect their money better than an in-house staff. And others that shied away from out-sourced billing because of a bad story they heard years ago from a peer. And there have certainly been some bad stories out there.
Anxiety is always present when turning over the collection of your money to people you don’t see every day. But should it be?
But unless you’re an all cash practice, or have a practice that is predominantly Medicare or Medicaid, I’ve come to feel like outsourced billing is the way to go, for a few simple reasons:
This is, of course, a short list. In fact, each topic listed above can generate a lot of discussion and comment. For example, it’s almost impossible for someone not dealing with payers every day to understand how they are constantly changing reimbursements, reporting requirements, and even some rate structures as they evolve and change. This can be especially endemic within the government plans.
I’d suggest the big question is: Can a billing company stabilize my cash flow, aggressively address my revenue cycle, and keep me up to date on all billing related matters that might impact my practice? Can they help me and my staff learn how to code more effectively, and understand what payers are looking for in complex coding situations? Is their pricing truly expensive, given what I would have to create within my own office---and, crucially, MANAGE???
Focus on that last word. Most docs I know don’t want to take on another internal management position where they are going to be forced into a learning curve on a subject with extreme levels of detail and risk. In fact, in most instances where I’ve seen in-house billing the docs have started off dedicated to making it effective, but fallen away as their private practices and lives became demanding; responsibility for the billing effort and staff becomes a pariah of a responsibility and usually cash-flow suffers in one way or another. And no one noticed until cash flow changed and their salary check was effected, and then it was crisis mode and high anxiety levels.
So it’s not always about cost. It’s about the value realized for the expense. You have to ask a lot of questions, and can rely on your peers for a variety of opinions, good and bad stories, and cost data. Or you can work with a consultant who’s been down this road before, who can analyze what you need and be there to ask all the right and necessary questions. As healthcare reimbursement becomes more complex in lock step with the growing responsibilities of your clinical practice, you need to find ways to utilize your time and manage the non-clinical parts of your practice most effectively. Outsourcing billing, when done right, is certainly one of them. And if the entry strategy is good there should be no reason for anxiety.--TOM ELLIS III
Looking over a physician’s contract I was reviewing the other day I came upon a single sentence set into the “benefits” section:
“After twenty four (24) months of continuous employment employee will be eligible for consideration as a partner of group.”
I’ve seen this language in countless contracts. Many of my clients, especially those looking at an employment agreement for the first time, have found it extremely enticing, as it seems to hold out a carrot of great value, one to strive for.
My question is always: What does that sentence mean?
Medical partnerships, and the operational documents that govern them, are all over the map when it comes to meaning, purpose and design. I have worked with clients who belonged to larger groups that were extremely well designed, with the partners contributing a portion of their income to create an MSO or IPA type entity that created real value by providing services like billing, credentialing, payer negotiations, HR, and the myriad issues related to compliance. Other large groups have arrangements to share income from ancillary services. In these organizations partnership means something tangible, beyond the ability to cast a vote on group decisions. And the structures of governance and partner responsibilities are carefully defined.
But the smaller groups, which is where the contract in question came from, tend to be much less defined when it comes to meaning (some have no idea of what partnership can look like or even how it could be organized). That was certainly the case in this matter.
My client, who had become an employee prior to our meeting, had found that there was truly little or no financial benefit in partnership. Since all of the partners followed the dictum “eat what you kill”, the partnership had no cash, and it’s only assets were the furniture and fixtures found at their two offices. The partners had abdicated all HR decisions to the office manager; she was also in charge of reporting and oversaw billing and collections. However, other than the individual income reports generated for the docs, there was no financial reporting on the partnership. And no partner was assigned to oversee any specific operation within the practice’s structure.
The practice was successful for its doctors, but the partners were timid about making tough decisions, and partnership “meetings” were more about getting it over with than really exploring current and future operations. There were too many employees and none of the partners was interested in tight financial management. There was no budgeting for the costs of practice improvements.
In short, this partnership was nothing more than mechanism to require a response to cash calls for unanticipated expenses.
My client was staging his departure as a result—our analysis was that this partnership would be fraught with problems unless major changes could be made (and the existing partners had demonstrated no interest in doing so).
Partnership was an illusion. Make sure to ask lots of questions if you see this clause in a contract, just to see if it really has any weight. Tom Ellis III