10 signs of a well-run practice

Questions to help you decide how well a practice is run

By Teresa Odle | Feature Articles | Spring 2011 | Uncategorized

 

Jill Stoller, M.D., managing partner

A lot of young physicians have their eyes opened when they get into a practice that they haven't evaluated," says Jill Stoller, M.D., managing partner of Chestnut Ridge Pediatric Associates in Woodcliff Lake, N.J.

Location, location, location. Along with compensation, it’s one of the first considerations when physicians job search. But you can golf most anywhere and ski in most northern and Rocky Mountain states. Even if you return to your hometown, you might have several practice opportunities from which to choose. So don’t overlook how well a practice runs when researching places to work.

Most physicians would agree that resident programs don’t prepare physicians well for the business side of medicine. Jill Stoller, M.D., FAAP, managing partner of Chestnut Ridge Pediatric Associates in Woodcliff Lake, N.J., says there isn’t much emphasis on practice management. “But I think it may be changing a little bit,” says Stoller, who also chairs the American Academy of Pediatrics’ Section on Administration & Practice Management. “A lot of young physicians have their eyes opened when they get into a practice that they haven’t evaluated.”

Physicians don’t better vet practices because they may lack the business savvy to do so or they run out of time. Many simply must adjust after so many years in medical school and residency. Ryan Mire, M.D., FACP, is an internal medicine physician with a multispecialty practice in Nashville, Tenn., who has been in private practice since 2002.

He says that many residents are used to getting through short-term challenges: four years of medical school, three to five years of residency, and maybe one to three years of fellowship. “However, employment is a long-term objective very similar to a marriage, and there is a lot at stake,” he says. “Physicians have to think globally as they make decisions and also understand aspects of the practice that they are not necessarily taught to assess.” Mire began sharing his job search experiences with residents soon after beginning practice, and self-published a book on transitioning into medical practice because he saw that residents needed information and advice.

Quality of life and location certainly are important, but you can’t enjoy them if you’re stressed out or working more call and making less money than expected. “It goes hand in hand,” says Stoller. “If you want a good quality of life, you have to be sure to have a financial basis for it. You want to be able to have that day off a week and that six to seven weeks of vacation a year. And the only way you’re going to get that is to make sure you’re running an efficient practice from a business standpoint.”

To effectively evaluate a practice, you’ll need to ask lots of questions and gather information beyond what a recruiter typically provides. You may not ask all of the questions on your first visit, but try not to get caught up in the remodeled office with the golf course view until you consider the less flashy, long-term issues that will make the days go more smoothly.

Impress with finesse

Still not sold on the idea of asking some tough—even probing—questions of a potential practice? Think again. Asking these questions is much more likely to impress than to upset future physician colleagues and leaders, so long as you go about it with timing and finesse.

“It will definitely give you a leg up on most of the applicants coming right out of residency,” says pediatrician Jill Stoller. She says they’ll realize you not only have good clinical skills, but that you seem to understand what private practice is all about from the business perspective.

Get a feel for when to ask the questions and how, says radiation oncology administrator R. Scott Krewson. “I tell our residents that I’m giving them some questions but that they’re going to have to see how the conversation goes and when and how to ask,” he says. Krewson advises that applicants generally not bring up salary until it’s brought up to them. Internist Ryan Mire says that once you narrow your choices down to the top two, return for a second interview at each. “This is your opportunity to open all closet doors, speak with other employees of the practice … and do a brief chart review to make sure the group is practicing the standard of care that you would expect for your patients.”

When you ask about details, have a list to remind you. But don’t start firing off questions like an interrogation. Krewson gives an example for determining patient volume: “Now that I have a sense of your practice, I’m really excited. How busy do you think I’ll be?” He says, “it’s a fine line, using finesse, sitting back and not being offensive.”

Can we crunch some numbers?

Both sides will want to discuss lots of financial numbers and markers that dance around physician productivity. You also need to talk about how the practice shares numbers with physicians after they join.

“What’s the collection rate for the practice?” asks Mire. “Once off guarantee, your income is determined not by what you charge, but rather what the practice collects on your behalf.” It’s good to know daily volume or census, or at least ballpark expectations. Of course, you’ll eventually want to ask about fixed and variable costs or overhead rates. If you don’t get specific amounts, at least ask for ratios of overhead to revenue. Compare those rates against the current practice environment. For instance, if the practice is bringing you on to ramp up for a new service, does the overhead rate reflect the new support staff the service may require? Were capital costs (like equipment) paid for in advance, or will there be a monthly payment or lease? And what’s the projected monthly revenue?

“How easy is it to get reports out of their practice management system?” asks Cindy Dunn, RN, FACMPE, a principal consultant with the Medical Group Management Association Health Care Consulting Group in Cocoa Beach, Fla. ”If they roll their eyes and say ‘We’re working on it, but it’s not that easy,’” think twice. Dunn also suggests asking for a sample financial board packet. “If it’s 20 pages long, that’s a problem,” she says. “They ought to offer a dashboard that is one or two pages long with key performance indicators—at a bare minimum, net collection and days in A/R.” And Dunn suggests asking about days in A/R greater than 90, not 120.

 

Topics: , , , ,

Pages: 1 2 3 4

Comments are closed.