Healthcare reform is, at least for now, law. It is easy to get "analysis paralysis" trying to
anticipate what it might mean for your practice and your bottom line. No one really knows for sure
exactly how things will play out over the next few years; but most physicians and their managers know
what needs to be done to improve, regardless of what unfolds under the guise of reform. There is plenty
of hand writing on the wall right now to indicate that practices cannot afford to continue with the same
modus operandi. Savvy practices are rethinking operations and implementing changes
before the impact
of reform is felt. By doing so, they will be a much better position than their competitors to weather the
storm, adapt, and seize the opportunities presented by reform. Here are some suggestions.
Develop a business plan and a budget. Knowing where you are going makes it faster and easier to
get there. Everyone is on the same page and working as a team. No matter how small or large your
practice is, management should be spending 60% of their time on daily operations, 25% of their time on
monitoring the annual plan/budget and 15% of their time planning and getting ready for next year. You
can't expect anyone to implement change and think ahead if bogged down/distracted 100% by daily
operations. This is typically a symptom of a practice without a business plan.
Keep score. Monthly financial and productivity reports are necessary to monitor progress against
budget. If you don't keep score, you have no idea where you stand or what needs to be modified. This is
no different that treating a patient. You need data to make decisions. Change is painful and you can't
convince naysayers that something is working unless you have objective data. Otherwise, decisions are
based on politics and subjective information.
Communicate. Physicians should meet regularly, at least monthly, with their manager to review
reports, get status reports and to stay on track. In larger practices, the manager should meet
separately with the support staff and act as the intermediary between the support staff and the partners.
Staff participation and feedback is crucial to their "buying in". It gives them a sense of ownership and
pride in the practice. One of the most common criticisms of management by staff is "they never ask us
what we think".
Embrace technology. Relative to most other industries, healthcare has been slow to embrace
technology to improve efficiency and profitability. Many practices are still without the basic "tech
amenities" like email, web sites, electronic billing and even cell phones. But all the technology in
the world, including the inevitable electronic record, will not improve productivity and profitability
if you end up "paving the cow paths" as the saying goes. Technology is wasted if you cannot ultimately
process more patients more efficiently.
Review third party contracts and fees. Many practices allow their commercial contracts
to renew automatically without reviewing them first. Are the conditions and fees still acceptable?
Does your staff dread a particular carrier? You should know what your top 15 are and how much each
of your major contractors pays per procedure. If you are in the fortunate/envious position of
having more patients/business than you can handle, consider reducing the pressure/workload by
weeding out and eliminating your worst payers.
Audit your documentation and coding. Use an independent auditor to review 10 charts per
provider and the corresponding E&M code selected. It is important not to do this with internal
staff as you will lose objectivity. An outsider will not be swayed by internal politics, turf
or have a stake in the status quo.
Get an outside perspective or second opinion. A qualified medical practice business
specialist/advisor will provide a fresh and unbiased perspective on your operations and offer
recommendation for improvement. We all have a tendency to be defensive and avoid change. An
independent advisor can help you achieve consensus among partners, prioritize what needs to be
accomplished and serve as a catalyst and moderator for change.
Plan for succession. Do you have an exit strategy? Do you know when your partners plan
on retiring? Do you plan on phasing out your practice as partners retire or will you replace them?
Are you planning on selling your practice? Unfortunately, a lot of practices just fade away and the
partners come away with nothing. This uncomfortable subject needs to be discussed as it is becoming
increasingly harder to recruit new physicians, especially to rural areas.
