Practice Management Workshop

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Practice Management Workshop

• July 9-11, 2004
• The Westin OHare ? Rosemont, IL

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• A/I
• Practice
• Management
• Overview

Keith Borglum
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Evaluating Practice Options
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A/I Career Options

• Solo practice
• Small single-specialty group
• Large multi-specialty group
• Hospital Employed/PHO
• Academic practice/research
• Management/non-clinical
• Full Time or Part Time

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Negative Market Forces
Other Specialties Competing Managed Care
Weak Economy Increased Overhead
Declining Income

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Demographic Issues
Aging Population 37 of A/Is Retiring by
2010 More Complex Care Less Residents
Increasing Income Possibilities

Source AAAAI Academy News July 2000
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National Median and 90th Percentile A/I Income

• Single Specialty - 340 - 679,000
• Multi-Specialty - 215 - 403,000

Source Medical Group Management Association
www.MGMA.com
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Best Options Financially

• Replace retiring provider with
  strong market positioning,
  in solo or single specialty small
  group
• Start a solo practice in an underserved area

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Benefits of Group Membership

• Higher Earnings
• Clinical Peer Support
• Delegated Administrative Tasks
• Better Management
• Afford/Amortize Better Equipment Facilities
• More Power in Local Medical
  Politics

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Group Dynamics
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Evaluating a Position

• Compatibility
• Practice management sophistication
• Business/political environment
• Clinical reputation/sophistication
• Spend a lot of time and ask a lot
  of questions!

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Management By Statistics
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Know Your Numbers

• Productivity in and Encounters
• Overhead
• Cost Per Patient / Visit / Hour
• Clinical Outcomes
• Industry Statistics
• HMO/IPA Impact
• Management Statistics

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A/I Charges, Collections Income Ratios
You collect 77 of charges, and keep 36 of
collections(net pre-tax income of 28 of charges)
Source National Assoc of Health Care
Consultants/Joint Statistics Report at
HealthCon.org
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A/I Expenses
Source NAHC/ Joint Statistics Report
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Cost Per Hour to Open Mail, etc.
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Increase in Productivity Required to Maintain
Profit with 25 Discount Contract
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Managing Overhead
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Overhead Statistics in A/I
Collections 40,000/mo Physician 36 Staff
13 Clinical Supplies 6 Office Supplies
2 Occupancy 5 Marketing 1 Staffing
3.4 persons ARCharges .7 months, 54,000
Source HealthCon.org 2003
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Cost Control Tips

• Track overhead properly on PL
• Compare to statistical norms
• Create a budget and stick to it

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Cost Control Tips continued.

• Forget deductibility-
• what does it cost?
• Do you need it?

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EquipmentTo Buy or Not To Buy?

• FFS
• How much extra labor/costs needed?
• How long to pay off?
• Capitation
• Will it carve out cap?
• Will it save risk pool ?
• Will it attract contracts?
• Will it give competitive advantage?
• Will it improve outcomes?

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Cost Cutting Tips

• Most important
• Maximize productivity so that the percentage of
  costs fall.

Example2000 rent is 10 of 20,000 income, but
only 5 of 40,000 income.
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Managing Systems Staff
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Medical Record-Keeping

• Paper Records are still universal
• Physicians resist change / often computer
  illiterate
• No PDA or EMR platform is standard yet
• EMR costs are high, but falling
• EMR needs to be regional to be efficient
• Are external issues forcing a platform change?

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HIPAA

• Health Insurance Portability and Accountability
  Act
• HIPAA is mostly about privacy- patients- data
  transmission
• Common sense is 90
• Many false rumors
• No-big-deal for most practices
• There are no "HIPAA Police"
• Many resources for compliance

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Manage More Patients

• Aim for gt 75th percentile Encounters
• Stretch return visits
• Extend prescriptions
• Stay on time
• Do group appointments
• Learn advanced scheduling techniques

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The Effects of Efficiency on Patient Visits
Ambulatory Encounters
Data Source MGMA Productivity Report
www.MGMA.com
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Staff Efficiency
One excellent staff personat 20 over
market-rate pay will equal or exceed in
work-output 1.5 average staff at market rate, at
less cost!

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Hire Correctly

• Always check background
• Objectively test skills
• Written Job Description
• Written Employee Handbook
• Allow half or whole day observation

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Train Correctly

• First half day observation only
• Then graduated tasks
• Use a Proficiency Schedule
• Provide continuing education
• Train managers supervisors

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Feedback Frequently

• Informal verbal support -praise
  publicly -reprimand privately
• Formal written reviews
• Discuss problems
• Allow staff to review you

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Marketing
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Marketing Basics

• Availability
• Affability
• Ability

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What is Marketing?
Any activity to attract a new patient or retain
an existing one. Internal Marketing typically
generates patient-referrals or retains
patients External Marketing is directed toward
strangers
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Define Your Target Segments

• Age
• Gender
• Location
• Language/ethnicity
• Insurance Plan
• Clinical Focus

Create a plan for each target.
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Internal Strategy 1

• Listen, Listen, Talk
• Ask referrers
• Ask insurers/IPAs
• Ask consultants
• Read the journals
• Ask patients

Determine what the market wants!
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Common External Strategies

• Meet 5 new referrers a week
• Solicit non-MD referrers
• Speak monthly to groups
• Contract with insurance plans
• Market a web-page
• Do health-fair screenings
• Advertise appropriately
• Do publicity releases

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Managed Care Marketing Strategy
Cater to the referrer!

• Define develop your select referrer base
• Express/demonstrate understanding of risk
  management
• Be of counsel more
• Seek exclusive relationship (economic
  Darwinism)

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Avoiding Marketing Mistakes

• Have a Plan that is
• challenging yet attainable,
• clear and unambiguous,
• written and measurable
• Dont be amateurish
  get professional help
• Make sure your professional help is
  medical-practice knowledgeable
• Know when to foldem

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• In Summary
• A well-managed practice helps you
• better serve patients!