Taking the pulse of your medical practice — in several parts
This series is geared towards physicians in practice, who have a nagging feeling they aren’t being as business-like as they should, or want to!
Last week, we began this analysis with 10 Questions to answer about your medical practice, as a business.
Now let’s focus on your medical practice governance. Boring, but essential to clarify so that you can answer questions like:
- who is/are the managing partner(s)?
- how will this person or these people be compensated for this “administrative time”?
- what will be the extent of their authority for decision-making?
- who will establish and oversee the operating budget?
- what happens when a partner is ill, disabled or dies?
- what happens when a partner wants out?
- what happens to your practice if and when you retire?
- how do you bring on partners?
- how do you add associates to the practice, and how can they become partners?
- how do you determine the direction of your medical practice’s growth? Additional sites? More space in the same building?
- how do decisions get made, such as whether to merge with or be acquired by another group?
- what ancillary services/businesses (lab? diagnostic testing? therapeutic devices/services? in-office dispensing? real estate?) will the medical practice invest in?
Let me start with defining what I’m referring to.
Medical practice governance refers to the setting of policy and strategy for a group practice. This role is usually assumed by a board of directors if you have a corporation (in fact, it’s typically a requirement of a corporation).
Here’s an excellent podcast you will find useful on the topic – “Organizing your medical practice for success: Vision Setting, Decision Making, Governance, and Communications” by Will Latham CPA MBA.
And these are valuable self-assessment tools from MGMA to help determine where you stand with regard to governance.
One is a Physician Retirement and Practice Transition Self-assessment Tool, another is a Compensation System Self-Assessment Tool. Use these to figure out how near to …or far from… optimal your medical practice’s performance is.
I have a feeling you’ll be rather surprised by what you don’t know about your practice!