By Sharon Ryan, MBA
Managing the growth of a medical practice is not easy. Just ask someone who has done it successfully. Many physician leaders, even those with great vision, will talk about coming through the fire a bit scathed. Mistakes are often made and lessons are learned the hard way. That’s what growth is all about.
You can’t avoid all the trials and tribulations. However, you can side step a few with some substantive thoughts on why you want to grow your practice and how you want to grow it.
Why Do You Want to Grow Your Practice?
What is your definition of growth? Is it more revenue, more patients, more hours needed on the job? Growth can be what you want it to be, actually. If your take home pay is less than you desire, assess the gap and you have a pretty good idea of how much growth you need to see in your practice. Is it a yard or a mile?
Jack Welch, former CEO of General Electric, suggests that you ascertain if you are “on the right bus.” Can you reach your desired goals from the position you are in right now? In theory, a physician paid a salary with a productivity bonus can earn more by working harder. If that allows you to grow as you wish to, you may be on the right bus.
Physicians are often motivated by seeing more patients. The same analysis applies. Assess the gap between the number of patients you see and the number you desire to see. That’s the growth you seek for your practice. If your current practice situation will accommodate your wish, then you can set some plans in motion.
There are essentially two reasons to seek growth and one most likely applies to you if you want to grow your practice. They are:
· Earn More / Work More: You want to earn more or you want to see more patients and you are willing to work more to do it. (You go!)
· Earn More / Work Less: You want to earn more or you want to see more patients and you want to work fewer hours. (Yes, it can be done.)
How Do You Want to Grow Your Practice?
If you are already in the process of growing, here are four general categories you fall into. See if you recognize yourself.
Average/Healthy: You see steady growth in revenue or steady growth in patients. You have spurts in expenses that make the bottom line better, but at a variable rate of improvement.
Average/Unhealthy: You see steady growth in revenue or a steady growth in patients. You also see steady growth in expenses that make bottom line results trend flat or only slightly better. You are not sure if your efforts are paying off.
Over-Achiever/Healthy: You have steep revenue growth or steep growth in patients. You are writing some mighty big checks for good reasons. Bottom line results are trending up at a variable rate. You feel in control, but just barely.
Over-Achiever/Unhealthy: You have steep revenue growth or steep growth in patients. You can’t believe how much your expenses are. Your bottom line results are slightly better. You’re not sure who is in control, but it doesn’t feel like you are.
Here are some examples of putting it all together to achieve your growth expectations.
Earn More/Work More
Average/Healthy Category. Slow, predictable, controllable growth is ideal. It is also very hard to achieve. Set expectations for the hours you will work. If it means expanded office hours, you also need staffing and must make sure the net result is steadily pushing you toward your goal.
It is very likely that you will find opportunities to work more than you desire. If you take one of those opportunities, you are now in the over-achiever category. Just be sure it’s the healthy side of the aisle.
A classic example of average/healthy growth going off the track is a physician who practices full time and takes on the added responsibility of seeing patients in a local nursing facility. The nursing home bonds with the physician and begins to involve him in a myriad of time-consuming management issues connected with non-physician personnel. Since this is not time spent seeing patients, there is no compensation.
Over-Achiever/Healthy Category. If you want to get from point A to point B yesterday, you fit in this category. Look for fewer opportunities with larger time commitments. Expanding office hours may not be enough. If you do that and then look for another small hourly commitment, you may find yourself shuttling from one short assignment to another.
For instance, a physician practicing full-time is interested in working an additional 20 hours per week only to find that a very desirable position with 10 hours per week is readily available. The physician commits to the 10 hours even though he wants 20 hours. To compensate, the physician agrees to provide expert reviews for a small insurer.
Now, the physician has three jobs in three locations and each have their own idiosyncrasies about when the work can be completed.
If you do this, you’ll be amazed at how quickly you will feel out of control. You will find yourself at the Porsche dealer rationalizing the purchase of a fast car. That’s referred to as increasing expenses faster than revenue – the hallmark of over-achiever/unhealthy growth.
Earn More/Work Less
Average/Healthy Category. A steady, small increase in revenue matched with a steady, small decrease in hours worked is what you seek.
This usually means complex patients, elective procedures, working with physician extenders, or seeking training that will allow you to provide more specialized services. In essence, you are looking for strategies that will generate more revenue per minute than you currently generate.
A major theme should be efficiency – the kind that comes from effective delegation and judicious application of technology. Efficiencies don’t materialize overnight. On average, a practice needs 14 months to acquire electronic medical record software and become proficient with its use.
To have steady growth, the most expensive technology is not mandatory. Seek out advice. For example, primary care physicians can take advantage of a national program aimed at increasing the use of electronic health records. Many practices will be receiving free advice on the selection of software and assistance with its installation. For more information, go to www.qipa.org, and click on DOQ-IT.
Over-Achiever/Healthy Category. Precision is the key to having steep growth in revenue and a decline in hours worked. All available time must be spent generating revenue. And, you essentially need to have a practice that generates revenue when you are not present. In this case, the old adage applies: “it practically runs itself.”
This requires preparation and discipline. If you are good at picking talented employees, good at delegating, and above average at motivating your staff, you have a shot. But, you must also consistently avoid dictating, handwritten prescriptions, and providing patient services that could be provided by someone you supervise.
You have to be realistic. Working fewer hours may not mean working less. You will be using your time off to learn about technological solutions and how to implement them. You will likely have to use your down time to help train staff who can provide services that generate revenue (e.g., nutrition counseling, massage, and many other services).
You might not “be working,” but you will be thinking constantly about how you can improve your efficiencies. Your best friends will be a highly paid business manager who “gets it,” an electronic health record, e-prescribing, a cell phone, and a pocket PC or Blackberry.
Stephen Covey, the oft-published business consultant says, “Once you have a clear picture of your priorities – that is values, goals, and high leverage activities – organize around them.”
Setting goals, having realistic expectations and implementing the plans you make will determine your growth pattern.
Sharon Ryan, MBA is President and Chief Operating Office of PMSCO Healthcare Consulting. Located in Harrisburg, PA, PMSCO is a subsidiary of the Pennsylvania Medical Society.