Medical Practice Management – the Deadly Sins of Practice Failure (2)
What To Do
First steps to opening any practice, be it group, single practitioner, or department of a health organization, is to throw out the assumption that how you conduct business now is correct. Just because everyone else is doing it in similar fashion does not make it valid. In fact, it contributes to the fractionalization of healthcare and increases costs.
Business success is intentional, not accidental. Unfortunately, most practices succeed by accident. Eighty percent of new businesses fail because owners do not take the obvious steps to develop a business design and strategy that is implemented correctly. It is the same in healthcare.
The next step is to recognize who takes the economic risks and what responsibilities are required by the investor. If the physician/owner invests in opening and running a practice, he cannot abdicate economic responsibilities to employees with no vested interest other than a paycheck and a desire for benefits. Physician owners can delegate responsibility, but it must include monitoring staff activities and holding personnel accountable, if they are to guarantee that the investment is safe-guarded and heading in the desired direction. If physician/owners do not want that responsibility, they should not invest in or open a practice, including group practices.
The third step is to learn to hire based upon desired goals, not just salary and experience. An experienced office manager hired at competitive rates does not guarantee a good hire. It can also guarantee a disaster. It is better to outline the kind of functions that contribute to practice goals and hire accordingly. Include incentives that encourage staff accountability and positive performance. Part of the investment is to hire right, not by price.
Finally, every practice, regardless of its size or who owns it, can benefit from having a business manager. If not on a full time basis, then at certain mile markers such as start up, change phase, growth phase or when economic shortfalls need to be evaluated.
In addition, every physician/owner should be willing to give up a minimum of 3 days in their career to learn basic business strategy, design, and implementation, and not abdicate that responsibility to the office manager or business manager. No practice should be so reliant on any one individual for its success. Include staff in the learning and implementation process with the help of a business manager. Once learned and understood, it will provide a platform for lifetime success.
There is a reason why physicians go into medicine and then into owning practices. Every reason is personal and different and becomes the basis of practice goals. When goals are derailed by the realities of practice ownership, it creates active and building frustration because assumptions are not replaced with good basic business training in what is a rapidly changing healthcare environment. Any physician that does not intend to retire in the next five years and owns a practice, is a partner in a practice, or intends to invest in owning a practice, should seek training in business design, strategy and implementation. Sustainable incomes and practice survival will depend upon it.
Ester Horowitz is CEO of Marketpower, a business management & entrepreneurship firm located in Merrick, New York. Marketpower is responsible for growing the prosperity of health enterprises. Ms. Horowitz also conducts business education for the medical profession with the National Center For Business Growth and as a faculty member of the University of Phoenix online. She can be reached by email at firstname.lastname@example.org