I just got around to watching the episode of The Profit focused on A.Stein Meats. Now, you may be wondering why on earth I'd be posting about a meat business here -- what could that have to do with medical practice management? Well, The Profit deals with a variety of small businesses, and there are often take-aways that apply to almost any business, but the A.Stein Meats episode really hit some notes that are so important for managing the business side of a physician practice -- especially the under-appreciated perils of poor management of accounts receivable. When Marcus Lemonis arrives at A.Stein Meats, he learns that the 75-year-old company is losing $400,000 per year -- despite $50MM in annual revenue. He's initially confused about how the company's expenses could be exceeding their revenues. But he soon figures out that the biggest missing piece lies in the back office: accounts receivable. The office manager -- who nominated the business for the show -- reveals that the receivables are more than $4MM. And Lemonis quickly notes, many are so old, they'll likely never be collected. The owners, meanwhile, seem almost unaware of why they should be concerned about accumulating A/R -- after all, they're just trying to "work with" customers, many of whom are "friends." But, as the old saying goes, with friends like that, who needs enemies? The business's inattention to collecting the money they're owed was putting their solvency at risk; revenue is almost irrelevant if it isn't realized as cash coming into the business promptly. Moreover, the business was essentially financing its customers -- without getting paid to do so. Lemonis stated clearly, "we are not a bank" -- the same message we give our medical practice clients when they're too quick to say, "sure, we'll bill you" instead of asking patients for a credit card at the time of service, or a credit card on-file for procedures that need to be paid for over time. Medical practices are perhaps a bit luckier than a business like A.Stein Meats in that insurance payments still usually provide the biggest portion
The Patient-Centered Medical Home is so much more than just a payment innovation -- it's an idea that appeals for clinical reasons to so many physicians and practice managers, who were already aiming to provide the higher level of care-coordination and patient engagement that is the foundation of the PCMH. But many small practices we work with have been nervous about the hurdles for certification -- is it too much for a solo or two-physician practice to take on? A recent AAFP blog post offers a wonderful idea for smaller practices daunted by the prospect of tackling the PCHM checklist on their own: form an informal network with other, like-minded practices in your area, and divvy up the research and learning. What a great solution -- and a great way to expand your connections with other professionals in your community. Read about it here.
If you've been among the practice managers and physicians ignoring the 'fad' of physician ratings sites, hoping they'll just fade away eventually, there's bad news for you in last month's JAMA: more people than ever are aware of the existence of physician ratings sites. And more people than ever are using them. As has long been the trend, though, patients aren't flooding sites with rants of disgruntlement; positive views continue to heavily outweigh negative ones. The most important take-away from this new research? If you haven't started taking control of your listings on ratings sites, the time to act is now. Hiding won't help ... and taking charge is easy, once you learn a few key steps. Interested in learning more about online reputation management? I will be publishing a new Management Rx ebook on this subject in the next few weeks. To be notified (and take advantage of free review copies if you're interested), sign up here: Subscribe to the Management Rx interest list by Email
Yahoo! reports that a recent study by the Workplace Bullying Institute showed that bullying -- defined as "abusive conduct that is threatening, intimidating, humiliating, work sabotage, or verbal abuse" -- is a problem at nearly half of all US workplaces. They also found that 27% of all adult Americans have directly experienced it, 21% have witnessed it and 56% of perpetrators are bosses. More discouraging, the study found that employers are doing little to combat bullying. Among employers who had received complaints about bullying, only 12% established policies to combat bullying, and only 6% reported a zero-tolerance approach to eliminating it. And, the researchers also found that all this bullying has a high cost in employee turnover: 61% of employees who were victims of bullying either quit, were fired or were forced to quit. Medical practices exist to help patients, and usually most of the employees in a practice were attracted to the field for that reason -- so you wouldn't think that bullying could be a problem in the practice workplace. But bullying is something we often uncover in working with practices, especially when we're brought in because of high turnover or operating problems that the physician owners are having trouble solving. Despite being rooted in a caring profession, medical practices often have characteristics that make it possible -- even easy -- for bullying to take hold. These include: Physician owners are most often with patients and have little time to observe ordinary interactions between staff Physicians often dislike the management side of their practices and become too trusting of and over-reliant on one or a few key managers -- who then have too much power Managers spot the opportunity to seek excess power from uninvolved physicians -- becoming expert at managing upward and hiding the true nature of their relationships with staff* Physicians may have experienced very demanding, bullying (or quasi-bullying) environments throughout their medical training -- and may adopt the same management style almost automatically, without appreciating the costs When our analysis of a practice suggests that a manager, supervisor or physician colleague may be creating a threatening
It’s a common error for physicians to think their manager and the staff can do anything they ask of them. Although it’s admirable, it may place an unfair burden on everyone. And if the practice has grown, but the staff hasn’t, you may be expecting too much. If you have major projects that get put on the shelf or get derailed, you may be missing out opportunities or losing your competitive edge. And, if you find yourself picking up the slack for staff that is inundated with their workload demands and things just aren’t getting done, it may be time to outsource your pain. Even if staff has enough time, you might be asking someone to take on a responsibility they don’t have the acquired skill set required to get the best outcome. Physicians and managers also face tremendous demands that sometimes cause them to put off important projects that would help the practice become more robust and put you in control of your future. For example, most practice leaders don’t have time to take on something as important as a developing a strategic plan. Such a project requires tremendous upfront research and analysis, prepare the report and plan the strategic planning retreat? Hire an expert to do the leg work and facilitate the retreat and you will not only get the job done, but you’ll get it done on time. And how about using a payroll service with automatic deposit to the employee’s account? You can select a service designed to track accumulated paid time off, and allows you to download the employee time records, which is a real relief to managers. This is a cost effective way to get a reliable outcome and allow the manager’s time to deal with other pressing issues that need attention. Whether it’s outsourcing a specific one time project, ongoing responsibilities like revenue cycle management or an important daily task like seeking a technology partner to electronically manage appointment reminders, you can find a good match for your needs. Check with your colleagues, do research on-line and take advantage of those annual conferences
Microsoft recently announced it will end support for the Windows XP operating system on April 8, 2014 -- and this may have HIPAA implications for your practice. What could 'support' have to do with your HIPAA compliance? The biggest implication is that hackers could discover new ways to breach XP security -- and no support means Microsoft will no longer issue patches to plug the holes. That means you'll potentially expose protected health information to hackers if you continue using the unsupported operating system. Even if you're using cloud-based EMR and other systems, your office PCs may still contain protected information -- for example, if documents are scanned and saved to their drives. The good news is, PC prices are lower than ever, and upgrading can make your team more productive. (In virtually every practice we visit, we find at least a couple of computers that are so slow that they are adding to patient wait times at check in, check out and while scheduling on the phone -- and cutting into staff productivity. Inevitably, the practices believe they're saving money by not upgrading, but at today's prices, faster computers would likely pay for themselves very quickly.) If you act fast, you might even be able to get Windows 7 machines -- you'll miss out on the pizzazz of the new Windows 8 interface, but also skip the longer learning curve when transitioning from XP.
Our work with medical practices often involves analyzing a practice's data against benchmarks from sources like MGMA, NSCHBC, specialty society surveys, etc. But, it's not enough just to compare against the averages and percentiles; you have to know whether meeting or beating a benchmark is a good thing. Believe it or not, this is not always obvious. Among the benchmarks most subject to misinterpretation are staff per provider and staffing expense per provider. Most physicians and practice managers we work with are very focused on keeping headcount and staffing expense low -- and so they're pleased to learn they're in the lower tiers for headcount and staff expense ratios. The pleasure shifts to confusion, though, when we explain that squeezing staffing down to the lowest possible expense is not usually a path to higher profitability -- and can often be associated with lowering profitability! There are several reasons for this. The most important is that well-trained, well-paid, motivated staff -- and enough of them -- free up providers to focus all their attention on the tasks only they can do. Coincidentally, the tasks that only providers can do are almost always also the only tasks that generate revenue for the practice. Increase provider time spent on revenue generating activities (and not on unpaid tasks that don't require their training), and you're on the way to more profitability. Consider that an additional medical assistant might cost a practice about $100-$150 per day. If that additional assistant allows a practice to see as few as 1-2 more patients per day, that's a profitable addition. Often, one additional assistant can help more than one provider -- and help the practice quickly generate more revenue than is needed to make the addition a profitable one. When a practice is focused primarily on expense control and minimizing headcount, sometimes that results in providers doing too many tasks that could be handled less expensively by staff -- an opportunity cost for the practice and a direct hit to revenue potential. What's more, when a practice is too reluctant to add headcount, existing staff can quickly become