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
I’m not a big fan of buzz words, but when I ran across this one--intrapreneur—I was intrigued. As organizations have grown larger, intrapreneurs—persons within a company who promote innovation within the organization—have become the new movers and shakers, and company executives are on the hunt for this new type of employee, for people who can lead on important internal issues and, where possible, effect internal change that’s positive and, in many cases, ground-breaking.
In my work with new docs, especially those coming right out of residency or fellowship, I tend to see three distinct types. There’s the new physician that just wants to practice medicine, and not be bothered by operational issues. There’s the new doc that is only interested in those operational matters that have a direct impact on his or her bottom line. Finally, and more rarely, there’s the intrapreueur, the one that looks at a bigger picture of healthcare and is looking analytically at their practice, the group’s practice, and the immediate healthcare environment, finding ways to make very productive changes that benefit their practice, group, patients, and hospital.
As the business of medicine grows more complex, and undergoes rapid change, it’s almost impossible for one physician to cover all the bases. I have always suggested to my clients that they look at their practices as multi-faceted entities, and that they break down the most important pieces—contracting, HR, patient satisfaction, hospital integration, etc.—into silos, assigning responsibility for each. Spread the responsibilities, hopefully matching each silo to the interests of the physician. This helps create strong group leaders. Even the smallest groups should bifurcate responsibilities and set a schedule for reporting meetings as well as a mechanism to deal with urgent matters.
Of course, having a good administrator to help coordinate all of this can be crucial (and should be part of any job description for this position).
What typically happens is the intrapreneurs rise to the occasion. They search for a better way to do things, and do not look at this responsibility as just non-reimbursable burden. These are the folks that will be leaders in your group practice in the years ahead. They are the guys that read the literature, keep up with what’s going on in medicine, and understand the concepts of “Best Practice” as they apply to medical practices. Typically, they often become leaders within their hospitals or surgery centers as well.
I also suggest to my clients that they amend the interview process when hiring new docs. They need to ask questions designed to help identify the intrapreneurs, as well as those new hires who just want to come to work. For those who want to get involved, groups need to find a way to reward them for their extra effort.
Consideration might be made to add a certain level of operational responsibility into the wording of employment agreements—maybe even for all new hires. Group culture should be amended to require all new hires to understand that they are expected to be integrated both clinically and operationally, with tasks in the latter category designed to get them involved in the operations and business. Start small, expand as the talents and interests of the new hire begins to surface. You may have more intrapreneurs in your practice than you know. –Tom Ellis
A few months back I promised to discuss this topic a bit more, discussing the ways affiliations can be built, maintained and expanded in functional medicine practices. Let’s start with a few of the basics.
The primary combination of a good nutritionist and an FM doc is an absolutely “must have” for any functional medicine practice. Nutritionists don’t have to have an FM certification but need to be working in that direction; same with a doc if they don’t have an FM certification.
These two must get comfortable with each other to form an affiliation: More than just sharing referrals, the combination must be part of a clinical practice that is dedicated to expanding the patient experience and overall patient wellness. In my opinion, this is one of the most critical question to ask, and the answer has to be YES.
With this accomplished, the affiliates (I don’t want to use the word “partner” because it has an array of legal meaning) need to talk about their vision for creating this relationship, and discuss in detail their vision for the practice and its patients. Look down the road--Where would you like to be in 12 months? 18? 24??
What’s most important is that you have a frank, open conversation about these topics. Don’t think it will happen in one meeting. Outline everything you can think of that would involve your new “affiliate” And don’t leave any questions unanswered. Write it all down. Diagram it out. Detail it in great depth.
Remember, on top of all of this is that commitment to improving the patient experience. This is always true of any affiliation you build—the patient experience has to be foremost in your mind, with patient satisfaction and wellness a number one priority. FM patients want a holistic, overall assessment of their problems, and the experience they are looking for is very different from that of traditional medicine, which tends to deal only with one clinical problem at a time and can be much more fragmented. The larger, successful FM practices have the vision of a “one stop” shop in many ways, everything a patient can need combined, as much as possible, under one roof.
This planning process is extremely important, because it sets the parameters for budgeting and integration. There are a number of different financial and operational models, but all are based in large part on who contributes what—EHR platform, phone system, clerical staff, billing system, marketing costs, leased space, etc.—and then what needs to be purchased. For example, you should have one EHR system to create complete patient record, and one billing system that can add information to the latter. And you have to look at pricing, taking insurance vs. cash only, etc. This is a more complex problem that I’ll expand upon in a future blog entry. This is where a consultant can be of great value in helping you align the financial and operational aspects of the now, and then further down the road as you reach to complete your vision.
The best FM practices plan for growth, and work to expand the patient experience, in a logical and sustainable way. They are always looking beyond the now, planning for growth, including the costs of growth. They are continuously asking questions about how to help the practice grow and be more comprehensive for the patients.
But as you start this process of affiliating, remember, it’s a medical practice. It’s also a business. Synching these two elements up is critical, with both having equal importance. More on that down the line when I’ll look at one or two specific areas of planning for growth. ---Tom Ellis III
When most people talk about “social purpose strategy” they usually mention some of the companies that have been most successful to making it part of their branding and marketing. Patagonia is one of the first to come to mind—their constant commitment to environmental matters and to a manufacturing process that pays fair wages to workers shows concern for working environments and addresses sustainability and global concerns.
Their angle is to emphasize the social benefits their mission (i.e. social purpose strategy) brings to consumers and the world at large. Patagonia has built this message into every aspect of their product line and image. It’s a key element of developing a strong customer relationship, to develop and maintain a strong brand loyalty.
Recently I was speaking with a physician friend who regaled me with a wonderful story about volunteer work he did annualy deep in the Central American jungle. These trips were part of the only annual visit to this remote region made by doctors in his specialty, and there would be long lines awaiting the opening of their mobile clinic every morning they were there. Treating dozens of patients every day, of all ages, was clearly one of the things he looked forward to every single year.
Doctors of all stripes that I’ve met or worked with over the years have had similar stories. Doctors are giving people. They are also reticent to talk about the wonderful work most of them do, pro-bono, in their local communities and around the globe on mission trips.
So why don’t doctor’s expose these activities to their patients? In the twenty plus years I’ve been working with them there’s only one (!) physician I can think of who even had pictures in his office that revealed how he donated his time and efforts to provide care to those without it. (This excludes ortho-pods, who are quick to paper their offices with pictures from athletes and athletic organizations they work with and keep healthy.)
I would suggest that docs add social purpose strategy to their efforts to brand. If you support a group like Doctors Without Borders, put up some pics of trips made on their behalf, or even information about the group in your waiting room. If you work a mobile healthcare unit in Central America or Africa, why not display some pictures from these trips along the office walls? If you’re involved in a local free clinic, how about literature that explains what/who the clinic treats, along with donation contact information?
Patients today are told they are “consumers” of healthcare. The fact that you’re a great doctor is always, first and foremost is your best calling card. But to further your reputation (i.e. brand), there’s nothing wrong with letting your patients, and the community, know about the things you do, on your own time, and often at your own expense, to make the world a better place. Consumers like to do business with those that give back, and doctors give a lot. Integrate social purpose strategy into the way you look at your overall marketing and the image you project. Your patients will appreciate you even more.---TOM ELLIS III
For Med School Graduates the Entrance Strategy More Important Than the Exit Strategy.
This article will appear in Dallas Medical Society monthly newsletter in early 2018.
Two years ago I fielded a call from a surgeon I knew of but had not met. Raised locally, she had left the state for undergraduate school, returning to Texas for med school and North Texas for her fellowship. Heavily recruited, she wanted to stay close to home and her family, and accepted a position with a group of surgeons practicing at one of the area’s stellar hospitals.
But she wasn’t happy, two years into a three year employment agreement. In fact, she was angry, frustrated, worried, and greatly concerned about her future.
What had started out as a warm and fuzzy relationship with her group had gone decidedly in the wrong direction.
The genesis of her story is almost a cliché in the physician recruitment environment. In the last year of her fellowship, she suddenly started receiving inquiries from established practices or hospital employed groups, pitching a great future, good salary, moving expenses, and even a signing bonus. Two visits to her soon-to-be employer focused on where to live, meetings with all of the group members, a hospital administrator or two (representing her surgical sites), and a real estate agent to look at homes. Everybody seemed nice and she liked what she was shown. Money was discussed, and a contract arrived shortly after the second visit. She asked for a recommendation on a lawyer to handle the latter.
The lawyer was hired, and she consulted the internet about medical employment contracts, only to find the “eight things a medical employment contract must have” which she focused on exclusively during the negotiations. Her lawyer followed her lead. Within weeks the contract was signed, and she returned her focus to her final year, relieved of the pressures of finding a job.
It was a story that’s been replicated thousands of times. Now, barely two years later, she was miserable. What could have happened?
She never scratched the surface. Or asked enough questions.
Most of her complaints were around issues which should have been discussed and/or documented before any contracts were mailed, much less negotiated. For example, she never saw examples of the reports provided to each physician, that outlined patient counts, charges and revenue; they turned out to be woefully inadequate, and belied some serious issues with the group’s billing practices. The practice had policies and procedures, but they only applied to the staff—there were no rules for the doctors. Governance was not in place. She was assured overflow, but as soon as she everyone got very protective of their patient base, and the overflow was far less that what had been promised. Mentoring her in certain procedures was quickly abandoned, and she was left alone to do surgeries where she needed guidance (her surgical times on these cases were excessive as a result, which made the hospital unhappy). When the group decided to start taking call at another facility she was not consulted, creating issues with her family. When the practice’s payer mix changed she was given no notice about the financial impact this would have on her collections. And why was it that the patients with badly reimbursing insurance always seemed to appear on her schedule?
This list wasn’t even half of the problems she recited. All of them could have been addressed, and many included as terms of her contract.
In short: She had no “entrance strategy.” And now conditions had become toxic, beyond repair.
The first step a graduate takes post-graduation may be the most important they take outside of their academic career. In this ever-changing health care environment, graduates, most highly sought after, need to take the time to look at both the clinical and business environment they are entering. If necessary, they need to seek guidance to help them navigate these issues (which are woefully under-addressed in medical schools), to make sure they ask the right questions.
As they say, divorce is painful. But in this instance there was a happy ending. We were able to extricate her from her contract, and although she had to relocate her practice 20 miles she’s happily employed now with a group that is attentive to the problems she encountered. On her second go round, she had a great “entrance strategy” and things we much different.
Tom Ellis III has been a healthcare consultant for over 20 years in the North Texas area.
Synergy is one of the most overworked and overused words in the language. Webster’s primary definition—“The interaction of two or more agents so that their combined effect is great than the sum of their individual effects”—is what most people know. But it’s the second definition that serves as the guide post for functional medicine practitioners: “Cooperative interaction among groups…..that creates an enhanced effect.”
I’ve worked with physicians in the world of traditional medicine for a long time and have seen the impact of synergy when two or more gang together, but generally the results of this are related to cost savings and other HR related items.
Functional medicine is different. Although there are cost savings to be enjoyed when practitioners merge, the real potential is in integrative, comprehensive program that can truly provide patients with the varieties of care FM practitioners want to be able to offer to their patients.
This isn’t meant to denigrate the solo practice. There are hundreds of great solo practices out there, all providing fabulous care. Last Fall I sat in on a presentation by a group of FM leaders, all of whom operate individually, and whose model for patient care has been successful for years. Bravo!
Let’s look at what a general grouping of what most FM docs would like to be able to provide their patients:
That’s a big list. So how do you get there? Affiliations.
It’s the old “stronger in numbers” approach. A solo practice can’t generate enough patients or revenue to approach most of what’s listed above. But building a strong alliance of like-minded providers/practitioners, especially under one roof or at one location, is the only way to create a patient base large enough to support expansion, especially of services like infusion therapy, bariatrics and nutritional counseling.
My experience in FM started with one client, an MD who had a nutritionist/office manager. She merged with another FM doc. Another MD. Then nurses and NPs. It took 3 years to get to the point the practice now has all of the above. All built through affiliations.
More on how create affiliations next time. TE