Medical Consulting: Can My Private Practice Survive, con't.
Posted by Lin Dworshak on Mon, May 09, 2011 @ 11:09 AM
Yesterday, we identified 4 areas that must be looked at in detail to answer the “sustainable practice” question.
(1) Owner demographics
(2) Practice performance
(3) Strategic capabilities
(4) Leadership
Today, we will look at Practice Performance in detail. We are beginning here as analyzing this single essential ingredient to a sustainable practice may be all the further you may need to go to make a decision. Indeed, if performance; whether it be physician, office staff or accounts receivables does not meet the high mark of expectations in today’s environment; alternative practice models must be considered.
Eight significant components of practice performance will be considered. First and foremost is your practices receivables management capability. Your practices productivity must be maximized through accurate, efficient and timely working of patient accounts. In today’s world of complex health plans and electronic expectations and rules; not to even get into the 5010 and ICD10 regulations; your staff’s ability to collect from insurances/patients all the dollars owed you and the first time you submit a claim is paramount. To be more precise, your AR days (the average time a claim is paid) should be less than 40, your aging of accounts needs to be under strict control (less than 20% of accounts greater than 90 days) and you need to know that the payer is compensating you accurately. (For information on how to achieve those goals, subscribe to the white paper on this page)
Accurate coding of visits and procedures is necessary to capture full compensation for services performed. If your coding of procedures is not being performed by a CPC coder; then you need to consider adding one/employing one. Your productivity as a provider needs to be appropriately captured by a certified coder.
The practice performance is not only measured by looking at the performance of the providers, but also the staff performance. Does your front end staff have clear performance guidelines to ensure quality, efficient "customer service"? Historically, health-care providers have not liked to use the term "customers" when talking about patients, but in fact...that is exactly what patients are......they are customers looking for value, access, efficiency, quality "care" and a friendly warm smile. Like all customers, being treated as a valued customer whose needs, preferences and expectations are met will be returning customers giving your practice a "word of mouth" approval which is priceless. The accurateness of your billing staff is worth its weight in gold. Collecting the correct information efficiently (prior to the visit), 
billing insurance timely, and answering patient questions courteously and with patience will ensure patient satisfaction.
Your practice's relationship with the "choice" hospital is also an essential as well as your relationships with home-health care and hospice facilities. These relationships will bring value to your practice and must be nurtured and developed for maximum effectiveness.
There are other Practice Performance essentials to consider as well. The sustainability of your market share and the relationship with your referral base is crucial to consider. Where do your referrals come from…….how will that relationship be effected should you choose to integrate with a hospital system? What is the turn-over rate of your staff? What is your current access to technology? Do you perform ancillary testing in your office? What percentage of your revenue comes through these services? All these questions should be carefully and objectively evaluated and answered in order to gain a realistic knowledge of your practice productivity.
Owner demographics are another key area to consider. The age profile of providers must be considered; is anyone close to retiring? Are providers committed to practice? Do they have business skills that can add to the over-all strategic plan of practice? What are financial objectives of practice? Does your practice actually have a strategic plan based on expectations/needs of providers?
The leadership of your practice is an often over-looked essential. While physician leadership is often viewed as an intrinsically feasible decision; the physician leader must also possess the business qualities of executive and management capabilities and have the time to if practice is to develop and become a "best" practice in your community. The leader of the practice must encourage a culture of accountability for the entire practice. The leadership must also exercise financial, operational and managerial discipline for your practice to capture and maintain market share. Hiring a business leader may ensure these questions are answered affirmatively.
The strategic capability of the practice must be evaluated. What are the regional influences (geography) considerations? What is the scarcity of your specialty...ie: what's your competition? Do you have active recruiting capabilities to attract and maintain equity partners? How solid is the practice's access to capital?
Tomorrow we will continue our discussion with the risks/rewards of choosing sides.