In watching practices over the past couple of decades, I have seen something that most small practices do and many larger ones do that can sink a practice …quickly! It is somewhat of a surprise to many physicians. It is the organization of the practice’s processes and who is responsible for what.
In a perfect world, all employees are on the physician’s side. They are all totally motivated to be at work and they have no problems at home that might interfere with their work. Now, let’s look at reality. Even physicians are not always motivated, have problems at home, and may get distracted or may end up being driven to take shortcuts that are dangerous.
What is the cure? Cross-training and processes that help a practice to monitor performance can help. In other words, no longer can a medical practice be run like it was in the last century. A successful medical practice must run more as a professional business.
Doctors have for years been very professional in their clinical operations. They have demanded that their employees support them in the clinical aspects of the office and treatment of patients. While clinical professionalism is gravely important, business professionalism is just as important. OK, it’s only important if you wish to stay independent and not have others tell you what to do.
Follow the money
In the last half of the 1900s, cash flow was not an issue for medical practices. Somebody, not necessarily trained, could just write up bills and give them to the patients to pay and then the patients filed with their insurance companies for reimbursement. Then healthcare reimbursement became dependent on a practice submitting the claim for any price and the insurance companies, as a rule, paid out what was billed. Obviously, that didn’t work for the insurance companies and they changed the rules.
Now there are participation contracts with the insurance companies (that most doctors never read or even negotiate) and the doctors are paid less than half of what they used to receive. This has put a huge crimp in the running of medical offices and many doctors, instead of changing their processes, have tried to see more patients and do more procedures so they can get paid what they used to receive. All of this is just so that the practice can cover its overhead.
The downside of that is the doctor is overwhelmed, the staff is overwhelmed, and actually the patients get overwhelmed. This is a no-win situation. What can be done?
I believe that smart hiring and assigning of tasks is where the doctor can get their life back and their cash flow where it belongs. The problem with that is many doctors are very loyal to the staff they have now and/or are very uncomfortable letting those who don’t perform go. What they then do is hire more people, adding more costs and the vicious cycle starts to build. Get off the merry-go-round!
Pay a little more per hire, get better and more qualified employees, and make sure they go to ongoing educational opportunities. As a physician you must have continuing education, why not your support staff? What this does immediately is decrease your overall costs.
It decreases the costs because you won’t need as many employees, the employees will be doing their jobs better, patients will be happier, and cash flow will be maximized by people who actually know how to bill and stay up to date on all the rules. That is also why cross-training your employees is vitally important. You’ll always try to make sure that everyone gets their CEUs at the same time as the physician to save aggravation for everyone, but that is not always possible. If people are cross-trained, they can cover for each other more easily.
One person, multiple problems
So, how does not doing this guarantee your practice going under? Let’s take one position and review what can happen: the billing person(s). Granted this is a vital position, but you’ll be able to see how the ripples can expand throughout your practice.
If you are a small practice, you probably only have one biller and that person probably does not have any training, on-going training, or certifications. He or she probably is not paid that well, either. If that person is the only one who is doing your billing, he or she is the only one who truly knows what is going on in regarding practice income. If that person is stressed about money at home, or resentful that all this work is put on him/her and they see how much you “make,” or not good at their job and committed to excellence …you are in danger!
Studies indicate that 80 percent of practices are victims of embezzlement when their billing is in-house and the doctor never knows. Different people need to be in control of different aspects of the billing and collection process. The front desk must have processes in place that ensure all copays are accounted for and given to the correct person. The biller must have someone reviewing reports and denials to have a feel for any problems that may be starting. The office manager must be bonded to protect you and that person should be reviewing all processes, massaging them as needed, and watching over the big picture carefully.
I’m not saying you need three employees per physician; that would be ludicrous and expensive. But you do need the right people in the right positions and like President Reagan said: "Trust but verify!"
Find out more about Sue Irwin and our other Practice Notes bloggers.
