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Practice Management


A bonus formula that pleases everyone; Office hours for a new practice; Should patients be privy to your mission statement; Attracting stellar staffers in a tight labor market; The costs of processing paperwork for patients; Whether to curb your generosity toward colleagues; Why workplace policies need to be in writing; Whether discounts lead to improved collections; When a partner quits obstetrics.


Practice Management

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Choose article section...A bonus formula that pleases everyone Should patients be privy to your mission statement? Attracting stellar staffers in a tight labor market The costs of processing paperwork for patients Whether to curb your generosity toward colleagues Why workplace policies need to be in writing Whether discounts lead to improved collections When a partner quits obstetrics Office hours for a new practice

A bonus formula that pleases everyone

Q My hospital-owned community clinic is merging with an industrial medicine practice. I'm unhappy about the bonus plan the new organization has offered me. It's based on patient-visit charges only and makes no provision for certain procedures and materials, formulary usage, or on-site X-rays performed.

At other practices where I've worked, bonuses have been based on overall productivity. The new managers say that their patient-visit formula eliminates the temptation for doctors to overutilize services and supplies. But, surely, there must be a better way to calculate bonuses. Can you suggest a formula that addresses management's concerns about overutilization, but isn't dependent only on patient visits?

A It's a good idea for management to narrow the basis on which it hands out bonuses. Awarding bonuses based on referrals for ancillary services could violate Stark self-referral prohibitions and the anti-kickback law. But management doesn't have to limit itself to a formula based on office visits alone. It can also reward doctors for procedures they perform themselves.

Should patients be privy to your mission statement?

Q Our group just put the finishing touches on our mission statement. Should this remain an internal document, or should we post it in places for patients to see?

A Let the world have a look! Patients will appreciate seeing in writing that their health is your No. 1 priority. Post your mission statement in your reception area and exam rooms, and include it in all patient communications—bills, intake forms, and brochures.

Attracting stellar staffers in a tight labor market

Q The unemployment rate has been super-low in our city. With fewer workers competing for jobs, it's become more difficult for our small group practice to attract the best candidates—for both front- and back-office positions. Any suggestions on how to beef up our pool of applicants?

A In addition to placing an ad in the newspaper, try the following sources:

  • Former employees: Sometimes good workers leave to pursue opportunities that don't pan out. Others may leave because of changing family circumstances. These people may jump at the chance to work for you again.

  • Networking: Spread the word to colleagues and current employees. There's a good chance somebody will know about a qualified job candidate.

  • Local hospitals: They typically receive more resumes than they have positions to fill. Ask the hospital administration if it would be willing to forward some of these candidates to you.

  • Local community colleges: Many have career placement offices that would be happy to post your employment opportunity.

  • Previous applicants: By reviewing the resumes you keep on file, you might come across a perfectly qualified person you turned down simply because you had an even more qualified candidate at the time.

The costs of processing paperwork for patients

Q Patients frequently ask my office to complete forms for insurance policy applications or disability claims. Since these tasks are so time-consuming, I'd like to charge a fee. How much would be reasonable?

A Check with your local medical society to see what the typical fee is in your community.

Whether to curb your generosity toward colleagues

Q Should I limit the number of physicians (and their family members) to whom I give professional courtesy?

A Many consultants say you should end the practice of professional courtesy entirely, because state and federal regulators have tightened the rules regarding insurance billing and have stepped up efforts to prosecute physicians who try to get around the rules. Besides, there's no reason to give away services to colleagues, who probably have very generous health care benefits.

Why workplace policies need to be in writing

Q I've been told that I should pull together an office policy and procedures manual. Why is having one so important, and what topics should it cover?

A The manual lets employees know what you expect of them and what they can expect from you. It can protect you from lawsuits and help your office run smoothly.

Your manual should include a mission statement, and it should cover these basic topics: attendance and working hours, personal conduct and appearance, patient confidentiality, employment probation period, performance evaluations and salary reviews, dismissal and resignation, benefits and leave time, legal policies regarding employment, and office procedures.

Whether discounts lead to improved collections

Q Is it legal to give patients a discount for paying in full at the time of service? I'm hoping such an incentive will cut down on billing and collection hassles.

A It's legal, but it's worthwhile only for patients with no insurance.

You can't discount an insured patient's copay or coinsurance—that's considered fraud. If you discount your entire fee, health plans will end up paying you less. Instead, inform patients when they make appointments that payment is expected at the time of service. Have them sign a statement acknowledging your policy every time they check in. The statement should include instructions on making alternative arrangements with your office manager prior to treatment if a patient expects to have trouble paying his bill.

When a partner quits obstetrics

Q Our six-doctor ob/gyn group shares income and expenses equally—except for our newest associate, who receives a salary. Since I'll be giving up obstetrics soon, the practice is trying to settle on a new compensation method. We don't want to be bothered with a tedious productivity formula. What else can we use?

A Try a formula that splits net gyn income—revenue minus expenses—among the five partners, and net ob income among the four partners who handle pregnancies and deliveries. The associate receives her share through her salary, which is an expense to the practice as a whole.

Office hours for a new practice

Q I'm leaving a big-city group to start a solo practice in a small community. Should I maintain full-time office hours right away, even if I'm not filling all the appointment slots? What about staffing during the first lean months?

A Start with one full-time employee who can handle all the administrative duties—phones, scheduling, billing, dictation, and managed care paperwork. Once you've reached about 15 patients a day, hire a medical assistant as well.

It pays to stay open 40 hours a week right from the start. You need to be visible and to establish your availability to patients. You and your employee can spend any downtime working on ways to develop your practice.


Edited by Kristie Perry,
Senior Associate Editor


Do you have a practice management question that may be stumping other doctors, too? Write PMQA Editor, Medical Economics magazine, 5 Paragon Drive, Montvale, NJ 07645-1742, or send an e-mail (please include your regular postal address). Sorry, but we're not able to answer readers individually.


Kristie Perry. Practice Management.

Medical Economics


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