Five years ago, Dr. Brent Greenberg's practice was running into the red. After years of doing well financially in a full-risk practice, the budget got out of control around the time his firm spun off a second business that offered billing services to other practices. That's when his practice, Penn Elm Medical Group in Escondido, Calif., turned to a medical practice management consulting firm. In this month's column, Dr. Greenberg shares his advice on working with a third party.
In our situation, it was clear there were significant fiscal challenges that needed to be addressed or our doors would close. But without such a clear-cut crisis, when cash flow is high and bills are easily covered, most physicians don't appreciate the benefit of digging deeply into their budgets to truly appreciate their cash flow.
Nor do they realize the opportunities that could make a significant difference to their bottom line. If you're curious about taking a fresh look at your budget and work flow, then there's no shortage of medical practice management firms with persuasive presentations about what they can do for you. Before hiring any firm, insist on contacting a list of former clients who have a similar patient demographic and insurance mix.
Don't spend a dime on a consulting firm unless you and your partners are willing to make some changes. That may sound obvious, but in my search for a consultant, one former client I spoke with was unhappy with the experience. The reason: The consulting firm had recommended creating a budget, a solution that lacked the easy-fix, wow factor that the client was expecting.
Find out what methodology the firm uses to evaluate the practice and reach its recommendations. The firm we hired, the Sage Group, spent 3 days interviewing senior physicians, front-office staff, and nurses separately. Another 3 hours were devoted to a group session to assess staff interaction. And 2 hours were devoted to discussing the findings of the report with the shareholders of the practice. A large part of the assessment was spent monitoring how time is spent and the flow of patient visits, from sign-in to exit.
A simple, yet invaluable recommendation was to upgrade our phone system to one that allows us to monitor the number of calls received, the wait times, and the number of hang-ups. One look at those data, and we realized that we were losing business.
The consultants helped leverage efficiencies. When confronted with the numbers, the outliers who routinely spent 1 hour on visits that should have taken 15 minutes of physician time were finally convinced of the value of delegating more tasks to nurses and using their time more strategically.
The consulting firm's three-person team included a financial expert who analyzed our contracts with insurance companies as well as our accounts receivable and our means and methods for bill collection.
All of this information was compiled to compare us with Medical Group Management Association industry benchmarks, which enabled us to spot opportunities for improvement relative to peer practices in the region.
The consultants even tapped into the emotional interaction among the members of our eight-physician practice, something we had not expected. Initially, philosophical questions such as “what do you want to achieve?” and “what do you need to be happy?” seemed off base. But ultimately, they proved to be beneficial.
The process helped us openly acknowledge that we have a mix of physicians with different goals. Some value free time over money at this point in their careers, and others still have medical school debt and young families to raise. Much like marriage counselors, the consultants helped us untangle the divergent desires of our multiple-partner marriage. In our case, we acknowledged the need to structure our bonus distribution more fairly.
All told, the fee was $7,800. Keeping our doors open for business and learning to work harmoniously: priceless.