Basic Facts About Practice Management

What is medical practice management?

Apart from the medical examination, the Practice Manager is responsible for everything else that occurs during a patient encounter. From the organizing and optimizing of patient flow, office workflows, to procedures and tasks.

Tasks are broken down into different roles and assignments, including: Front Office scheduling, eligibility and authorizations; Clinical pre-exam and examination; Back Office Revenue Cycle Management and Collections; Referral Desk, and Checkout.

The most visible activities that a office manager performs are the hiring, training, and organizing the office staff; financial management of cashflow; maintaining compliance; and ensuring engagement and patient satisfaction.

The mission of the practice manager is to allow the doctor to remain focused on treating patients, minus the burden of running the office.

The primary concern of a medical practice manager is that the physician gets paid properly for services rendered.

The responsibilities of a practice manager stretch across administrative, legal, financial, technological and more.

And according to Athenahealth, the role of a practice manager includes: Financial Management including insurance and patient billing, financial performance, and negotiating contracts with payers. Business Operations. Human Resources Management. Information Management including securing PHI and reporting on practice compliance. Organizational Governance including establishing office performance standards and monitoring staff efficiency. Keeping licensing up to date. Quality Management including establishing and monitoring quality standards. And Risk Management including establishing procedures to ensure patient safety and to address emergencies, disasters and legal challenges; while ensuring governmental compliance.

The software that allows an astute practice manger to efficiently and effectively accomplish this mission is called practice management software.

Management: Forecasting & Measuring Performance

Managing a modern medical office closely resembles the classic management model that dates back to the turn of last century’s industrial revolution where a scientific approach to tasks and organization resulted in significant strides in worker performance and overall organization performance.

In our Practice Management Hacks blog series, we offer practical tips from our smartest medical managers on creating more efficient office process and workflow. But here we will take the most recent advances in management thinking and offer applied examples in the context of Front Office, Back Office, Physician/Employee Relationships, and Senior Management – Employee & Finance. We will note the dimensions of process and workflow, culture and employee performance, financial performance, and time efficiency and productivity.

There are many ways to measure performance, but success is always a team effort. Your front-office, back-office, and medical staff must work smart as well as hard to keep the practice functioning at optimal levels. Relevant, measurable goals and metrics for every area of the practice enable all staff members to do just that. Effectively implemented metrics can also help you spot areas where your practice excels and those that need improvement. Following are some thoughts on measuring quality.

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What to measure

Measures of back-office quality may include insurance verification timeliness and accuracy, first-pass recovery rates (the “cleanliness” of code resulting in prompt payment), the percentage of accounts receivable resolved within 60 days, and the consistency of weekly deposits.

Front-office efficacy can be quantified through timely patient verification, consistency of appointment reminders, promptness of the check-in process, patient fees collected at arrival, and customer service.

Metrics for healthcare staff (nurses, physician assistants, etc.) include the accuracy of coding of patient visits, the number of patients seen, patient satisfaction scores, and documented contributions to workflow processes. Practices consider such physician metrics as timely starts for patient visits, cost of staff per visit, cost of supplies per visit, and on-time completion of medical records.

Note that information collected on physicians can be used to fine-tune budgeting, staffing, and financial policies. When presented as blinded comparisons of in-house colleagues, physician data can be a powerful motivational tool as well.

Complementary Practice Analysis

  • Benchmark Your Reimbursement Rates and Claim Efficiency Against Peers
  • Review the Revenue Impact of No Show and Cancelled Appointments
  • Identify Lost Revenue due to Patient Balances (especially > 90 days)
  • Recoup Lost Revenue due to Unpaid Claims (especially > 120/180 days)
  • Review Ways to Increase Patient Satisfaction and Referrals
  • Strategies for Increasing Revenue for Routine Appointments
    and Pro-Active Patient Outreach

How to measure

Practices can collect metrics data in real time using the features available in robust practice management software. Information as simple as the time stamp on patients’ co-pay receipts or as complex as a physician’s lab orders or referrals to specialists can be highlighted and aggregated in the electronic medical record. Customized search engine agents can uncover external performance data such as online patient reviews.

With staff stretched thin, practices increasingly are turning to managed service providers for optimal billing coding performance and regulatory compliance. These external partners monitor financial performance, verify patients’ insurance eligibility and benefits, conduct patient balance reconciliation, and report results, freeing staff for other tasks.

When it comes to gauging physician productivity, some practices use relative value units (RVUs) that consist of physician work (time, mental effort, technical skill, judgment, stress, and level of a physician’s education), practice expense (direct expenses such as supplies, nonphysician labor, equipment expenses and indirect expenses), and malpractice expense.

Make sure all goals and metrics are appropriate and that all staff members know what metrics are in use. Review these measures regularly to ensure their relevance to your practice. It might also be advisable to inform staff about the limits of your performance measurement methods. Employees who believe they’re being tracked or monitored too aggressively will be demoralized, perform worse, and might eventually move to another practice.

When To Measure

Performance must be measured consistently and there are several standard times to measure performance: In real-time (KPI’s), Daily (end of day cash reconciliation and deposits), Weekly (scheduling, front office performance), and Month-end reporting (all departments, all metrics).

Staff should not only know what is being measured, but when to expect a review. Performance can be checked weekly, monthly, quarterly, or yearly—whatever makes sense for the practice manager and the staff member. For many staff members, a yearly review/report is adequate. Closer scrutiny is expected for coders, accounts receivable, and collections specialists.

Benchmarking is necessary, especially when it comes to strategy and planning. Comparing a practice’s performance with an external standard can spur employees to commit to improvement and reflect more effectively on their own performance. External forces—from regulatory agencies to prospective patients—are already making these comparisons.

Real Time Reporting Via Management Dashboards

Many of the leading practice management platforms have Key Performance Indicators (KPI’s) built into their dashboards with easy to understand snapshots of productivity – especially around denied claims and at a glance monitoring of how well the practice is doing against key KPIs

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Some History

The Story of Modern Management

It’s fascinating to note how much of today’s medical practice management clearly has its roots in classical management dating back to the turn of last century’s industrial revolution where a scientific approach to tasks and organization resulted in significant strides in worker performance and overall organization performance. Taylor’s scientific school studied work methods and techniques, while Gilbreth’s classical school focused on managerial principles.

Many aspects of early classical management such as Henri Fayol 14 management principles can be readily seen (or even worse, not seen) in today’s busy medical practices –principles that provide modern managers with guidelines on how a supervisor should organize her department and manage her staff.

Max Weber’s turn of the century notion that organizational authority should be something that’s connected to a person’s job and be passed from individual to individual as one person left and another took over, is in stark contrast to an employee’s loyalty being attached to an individual such as a family member. Which model better serves the long-term goals of a particular organization? Tension arises today from not understanding and implementing early management principles that have proven the test of time.

My Fav: 80 years before you and I heard of it, Mary Parker Follett put forth the idea that instead of treating employees like robots, organizations should establish common goals for employees and encourage managers to have them participate in decision making. She stressed people and objectives over techniques. And Chester Barnard’s sympathy for understanding employee needs positioned him as a bridge to the next wave of thought, behavioral management.

A summary of the history of management would look like this: (1) The classical school, (2) The behavioral school, (3) The quantitative or management science school, (4) The systems school, (5) And the contingency school.

 

A Pick & Choose Approach That Works

Like economist, schools of business management may never agree in whole. But for the medical practice, a cadre of experts from today’s modern schools of management thought and style offer actionable benefit. In short, the more ideas you know from the various schools of thought, the more tools you have in your tool belt to apply to any given circumstance.

  1. Peter Drucker’s Management By Objective (MBO)
    MBO defines specific objectives within an organization that management can convey to organization members, then deciding on how to achieve each objective in sequence (sounds like whom?)

2. Total quality management (TQM)

  • Produce quality work the first time.
  • Focus on the customer.
  • Have a strategic approach to improvement.
  • Improve continuously.
  • Encourage mutual respect and teamwork.

3. Business Process Re-engineering

  • Organize around outcomes, not tasks.
  • Identify all the processes in an organization and prioritize them in order of redesign urgency.
  • Integrate information processing work into the real work that produces the information.
  • Treat geographically dispersed resources as though they were centralized.
  • Link parallel activities in the workflow instead of just integrating their results.
  • Put the decision point where the work is performed, and build control into the process.
  • Capture information once and at the source.

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MBO

  1. front office
  2. back office
  3. medical staff
  4. collections

TQM

  • front office
  • back office
  • medical staff
  • collections

BPR

  • front office
  • back office
  • medical staff
  • collections

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Sources:

  1. Physicians Practice, June 21, 2014, “Using Measurable Metrics to Review Medical Practice Staff,” by J. Cloud-Moulds, //www.physicianspractice.com/blog/using-measurable-metrics-review-medical-practice-staff
  2. Huffington Post, July 27, 2017, “Ways Healthcare Changes Affect Providers and Consumers,” by Jill L. Ferguson, //www.huffingtonpost.com/entry/ways-healthcare-changes-affect-providers-and-consumers_us_597a43cbe4b0c69ef705269e
  3. Becker’s ASC Review, August 31, 2011, “10 Metrics for Measuring Physician Performance,” //www.beckersasc.com/asc-turnarounds-ideas-to-improve-performance/10-metrics-for-measuring-physician-performance.html
  4. Medical Group Management Association, Lessons for Financial Success, Chapter 5: “Productivity, Capacity and Staffing,” © 2009 //www.mgma.com/Libraries/Assets/About/About%20MGMA/About%20Center%20for%20Research/Lessons-for-Financial-Success-Ch.-5-Productivity-Capacity-and-Staffing.pdf
  5. Bloomberg BNA, August 4, 2017, “Wearable Tech Offers Brave New World for Employers, Workers,” by Genevieve Douglas, //www.bna.com/wearable-tech-offers-n73014462771/
  6. Managed Healthcare Executive, July 28, 2017, “Four questions to ask about healthcare benchmarking,” by Joseph Krause, //managedhealthcareexecutive.modernmedicine.com/managed-healthcare-executive/news/four-questions-ask-about-healthcare-benchmarking
  7. //www.referenceforbusiness.com/management/Log-Mar/Management-Thought.html#ixzz4s1LW2QK1