Is Your Medical Practice in Jeopardy?

Physician's Money Digest, December15 2003, Volume 10, Issue 23

While you're busy seeing patients andkeeping up with the latest medicaladvances, it can be easy to ignore theadministrative end of your practice. Soperhaps it's no wonder that many physicians findthemselves surprised when the quality of their practiceseems to suddenly nosedive.

The truth is, there are usually indicators that somethingmay be amiss, says Rebecca Anwar, PhD, of TheSage Group, a health care consulting firm. According toDr. Anwar, there are 8 questions doctors should askthemselves to ensure the health of their practice—notjust their patients. Here is a quick summary:

  • Has there been a dramatic change in accountsreceivable? Sudden rises or falls can be a sign of trouble.To stay on top of things, the practice should createmonthly graphs of this data.
  • Is overtime increasing? There can be logical reasonsfor this, such as a new hire or new computer system.But if operations are regular, overtime should belimited. If it's rising, ask the office manager why.
  • Is overhead increasing? According to Dr. Anwar,this is "a sure sign of a loss of control." She says it's likelyto be "a combination of poor systems, lower productivity,and poor financial management." You must reachthe source of the issue and address it. First, try a call toyour accountant. For a more thorough overview, contacta practice management consultant.
  • Do patients or staff seem unhappy? Often, thesetwo go hand-in-hand. Dissatisfied staff can cause patientsto feel they're not being properly treated. And ifpatients complain about how they're treated, it's a definite sign that the office isn't functioning well. Rememberthat an atmosphere is created from the top down. If youare positive and accessible to your staff, they will typicallytreat patients in the same manner.
  • Do you have a lot of turnover? If so, then youknow the answer to question number 4. An inordinateamount of turnover can point to a problem such asunrealistic expectations of staff or poor management.Never underestimate the importance of creating anenvironment where people feel important and proudof their position.
  • Is your schedule always behind? This shows poorappointment scheduling and should be an occasionaloccurrence—not a regular pattern. Dr. Anwar adviseslooking at scheduling templates. Is there overbookingdue to great demand? Is there not enough time set asidefor quality patient contact? Is there high absenteeism?
  • Do the physicians receive practice performancereports each month? In this case, the answer should be"yes." Dr. Anwar says standard reports should includemonthly and year-to-date production activity (eg,charges, receipts, and adjustments by provider),accounts receivable, and aging reports. Note: This datacan be obtained from a computerized billing systemand prepared in a graphic format for clarity. Otherreports should examine income, expenses, and detailedstaffing costs, including new hires, training, bonuses,and overtime. Specific reports for strategic planningshould be requested on an as-needed basis. Overall, thisreview should take less than 2 hours a month. That'stime well spent when it allows you to make smart data-drivendecisions for your practice.

Adapted from "Signs that your practice is headed for trouble," by Dr.Rebecca Anwar and printed in Physician's News Digest, March 2003.For more information, contact Dr. Anwar at 215-247-9334 or visitwww.thesagegroup.net.