Practice Management
September 2021
by John Pinto and Corinne Wohl, MHSA, COE
Just about every concept you need to know to run your practice you learned in medical school. Here’s an example. As an ophthalmologist, you memorized a routine history question set to help you understand your patient’s eye health. You don’t ask every patient every question at every visit, but by having a memorized routine, you don’t miss much either.
The clinical question set you use today is probably a lot shorter than the questions you used as a resident. You’ve learned what can be left out and what answers lead to an off-ramp to the end of the exam.
The same concept can be applied to the management side of your practice, which you might consider to be a kind of “patient” needing your ongoing attention and understanding.
Here’s a starter kit of questions you can refine and apply daily, weekly, and in some cases, monthly or annually in your practice. Some questions are granular and some are big picture. Some questions should be posed directly to management staff, some should be posed to rank-and-file staffers. Some of the answers you get back will be satisfactory at face value, and some should be cross-checked with outside experts.
- Do we know what we want to do?
Too often, surgeons show up for work with goals that are no more defined than “Let’s make it through the day.” Start understanding your personal goals deeply and have these drive a formal, strategic business plan with a time horizon of at least 3–5 years. - How cohesive is our practice team?
Does your practice have sufficient organizational “connective tissue” so that the lofty goals held by the doctor owners are being translated completely into workaday action? Do you have a written operations manual? - Do we know what dimensions of our practice are growing, shrinking, or staying the same?
Practice financial data is often too late, too scant, too short term, or not sufficiently segmented by service area to back up your hunches. Bookkeeping controls must be in sync with the scale, financial challenges, and aspirations of your practice. - Do we have control over the volume of patient visits and the mix and volume of surgical cases in our practice?
Rather than just taking what comes through the door, you should establish specific volume performance goals for the year, describing the number of new and total patients and mix of services you want to provide. You should then compare these figures monthly to actual performance, implementing whatever marketing actions are needed to meet your goals. - Are there costs we could reduce without adversely impacting the quality of care we provide?
For example, you may be able to secure more cost-effective billing services by outsourcing this critical function, something that would be neutral in terms of the quality of medical care you provide. - Would cost containment efforts backfire and actually harm profitability?
For example, by reducing marketing costs $50,000 a year, you might reduce revenue by $100,000. By dismissing two techs, patient capacity may diminish and cash flow drop far more than the cost of two salaries. - Are there steps we could take to improve the quality of our patient care without adversely impacting profitability?
Remember that “quality” is not just clinical outcomes, but also patient perceptions. For example, handing every patient an inexpensive printed fact sheet describing their chief complaint and your treatment approaches would save some of the cost of having staff spend extra time educating each patient and would potentially improve patient compliance for better care. Everyone wins. - When will we post charges, submit claims, and receive payment for the services we’re providing to patients today?
Too often, doctors concentrate on the more than 90-day account column when the real problem is far earlier in the revenue cycle chain, for example, a bottleneck in the insurance department, generating a delay in claims submissions. Ask staff at the front lines about the time lag from service to posting to submission. - How many hours do our staff actually work every day, and how many hours are they paid for?
Practices, as they grow, can carry forward informal and sometimes even overly permissive wage and hour policies. This laxity can generate several negatives. Selected staff will abuse the system, claiming payment for extra time they didn’t work each day. This costs the practice real dollars, and worse, leads to lower morale among the non-abusers. Valid claims could be made against the practice for violating labor laws. - Could we have seen more patients in the clinic or performed more surgical cases?
Most surgeons end their work day with a cushion of unsold “inventory.” It may not bother you that a few no-shows leave you with time to read your email. But remember that marginal, incremental revenue represent the bulk of your profits, since fixed costs are already covered. Just three missed exams a day in a typical solo practice can trim $100,000 from your annual income. - If we ended the day providing less care—doing less work—than was possible, what could we do to improve?
Giving yourself an annual pay raise could be as simple as adding one or two slots to the appointment template, calling patients 24 to 48 hours ahead of their appointment to reduce no-shows, or increasing your refraction fee by $10. - If we saw all the patients or performed all the cases we were capable of, what’s holding us back from doing more?
If growth is a goal, look for opportunities to increase everyone’s productivity. Potential answers lie in back-office technology, increased tech training, or increased ophthalmologist delegation of care to optometrists. Note that you may not want more patients packed into the day but an extra hour to spend with your family. Knowing your goals is the start of achieving them. - Are we extracting a full measure of value from every staff resource in the practice?
Are techs standing around waiting for a doctor to emerge, or are they calling to remind the next day’s patients of their appointment? Are receptionists hanging out waiting for the next patient to arrive, or are they checking insurance verifications? You wouldn’t put your investment portfolio in an interest-free checking account; why would you let an $18-an-hour member of your staff not continuously provide value? - Are we extracting full value from every other resource in the practice?
Satellite office or surgical facilities left vacant most of the week were affordable in an era of $1,500 cataracts. Today, all offices should be open full-time, and an increasing number of practices are adding evening and weekend hours to extract a full measure of value from fixed resource costs. - Are we even in the right business?
Have we gone too far in turning a cataract practice into a LASIK practice, now that volume growth is stagnating in most markets? Have we considered ourselves a surgical practice only and missed optical dispensing opportunities? - What’s our exit plan?
Smaller practices have an easy answer: Sell to another practice in the community, bring a successor surgeon in a few months before retirement, or simply close the doors. Large practices have a more complex challenge. With the advent of private equity companies and ever-larger health systems, your options have broadened.
In the heat of daily battle, few surgeons and few managers take the time to ask these questions, much less act on the answers. Your practice—in both clinical and business dimensions—is the most important “patient” you care for. It’s certainly the most demanding. Learning to ask the right questions every day will improve your organization’s treatment plan and prognosis.
About the authors
John Pinto
President
J. Pinto & Associates Inc.
San Diego, California
Corinne Wohl, MHSA, COE
President
C. Wohl & Associates Inc.
San Diego California
Contact
Pinto: pintoinc@aol.com
Wohl: czwohl@gmail.com
