Cover Story

PRACTICE POINTERS

Is your practice staffed correctly?

Getting the right employee mix isn't rocket science, but it's easy to make mistakes. Here's a guide to help you decide how much help you need and what kind.

By Michael J. Wiley

Do you have the right number of employees in the right jobs? If not, you could be working harder than necessary and earning less than you should.

A low collection ratio is a telling sign that your staff needs restructuring. Most primary care practices have an unadjusted collection ratio (gross receipts divided by charges) of 50 to 65 percent; if yours is lower, you may not have enough people doing billing and collections. Adding an extra clerk could raise revenue more than enough to justify the new salary.

Other telling signs: Patient complaints over long waits can point to an overworked receptionist or medical assistant. If you're constantly rushed but don't see as many patients as you could, you may need more clinical help.

On the other hand, employing more staffers than you need could chew up a big chunk of your bottom line.

To calculate how much to spend on staff, look at the typical ratio of staff costs to revenues for your specialty. One excellent source for this data is the annual cost survey done by the Medical Group Management Association ($240 for members, $450 for nonmembers). The median total staff cost (including benefits) for family physicians in non-hospital-owned, single-specialty practices is 32 percent of medical revenue, according to the MGMA's 2001 figures. For internists in the same kind of practices, the figure is 30 percent; for pediatricians, it's 28 percent; and for ob/gyns, it's 26 percent.

If you're spending less on staff than other physicians in your specialty, explore whether hiring more people could increase patient flow or collections. If you're spending more than the median, you might be able to reduce your staff costs without negatively affecting efficiency.

Some doctors and office managers prefer not to develop formal job descriptions, fearing they'll discourage teamwork and give employees the opportunity to say, "It's not my job." You can prevent this by coming up with descriptions that list primary and secondary tasks. For example, a receptionist's main job should include greeting patients, answering the phone, and booking appointments. Her secondary responsibilities might include backing up the checkout clerk and assisting the billing clerk and office manager.

Employees' ability to cover for one another is vital to any practice. It not only evens out the workload, but it allows the practice to function properly when one or more staffers is out.

Typically, a solo physician has a receptionist, a checkout clerk, an office manager who also does billing, and a medical assistant or nurse. In larger practices, patient volume, specialty, percentage of patients enrolled in managed care plans, and level of computerization affect staff size and makeup.

Here's a rough job description for each role in the office and an idea of how many staffers your practice needs in each role.

Nurses and Medical Assistants

You need an RN only if she'll be assisting with procedures or giving injections. Surgeons often hire nurses; so do pediatricians.

Family physicians and internists, in contrast, can usually get by with less expensive medical assistants. An MA coordinates patient flow, prepares patients for the exam, and sets up the exam room for the next patient—all tasks that don't require the skills of an RN. A well-trained MA can also record a new patient's history and chief complaint and assist during an exam or a minor procedure. If your practice isn't big enough to have a record clerk, the MA will help pull and file charts.

Primary care doctors should evaluate an MA's cost based on extra office visits as well as ECGs, pulmonary function tests, and other services required by the additional patients. If hiring an MA costs you $13 an hour but lets you see three more patients a day at an average of $50 per visit, you're coming out ahead. To realize this bonus income, however, you have to change your appointment schedule. If you're seeing a patient every 20 minutes and you take on an MA, you should cut your average visit length to 15 minutes. Continue adding MAs until an extra assistant wouldn't help improve your patient flow, or until you can't handle any more patients.

Your other option is to hire a licensed practical nurse. LPNs, who are better trained than MAs, earn 20-30 percent more.

Medical assistants made an average of $23,840 in 2000, according to the Bureau of Labor Statistics in the US Department of Labor (www.bls.gov/oes ). RNs receive about twice that. They make a little less in office settings than they do in hospitals, however.

Receptionists

A receptionist is the public face of your office, so choose one carefully and don't underpay her. Her morale is especially important, because you want her to greet patients warmly and never be rude to them.

Receptionists wear many hats. In smaller practices, they check patients' insurance eligibility and obtain referral approvals. They handle the bulk of appointment scheduling. When people call with refill requests or clinical questions, receptionists route those callers to the appropriate clinician. And when someone needs a chart pulled, more often than not the receptionist does it.

In general, a soloist needs one receptionist, two doctors need a full-time receptionist and a part-time person or backup from another staffer, and three physicians need two full-time greeters. But if you're in a heavy managed care area, you might need more front-desk help to handle referrals. A four- or five-doctor practice might hire somebody to do nothing but managed care work.

Above all, make sure you meet your patients' needs. If your receptionists aren't answering every phone call or they keep people on hold for too long, you could be losing potential business. Automated phone systems can take some of the pressure off, but don't make them too elaborate; patients get annoyed if they have to choose among more than three options. (To find out how many people hang up before someone answers, check with the phone company.)

Although salaries vary regionally, a receptionist makes roughly $8 to $11 an hour.

Checkout Clerks

Besides collecting payments from patients, a checkout clerk should schedule them for follow-up appointments. If the clerk has to hand off the patient to a receptionist for another appointment, the patient might feel he's on a treadmill just as he's getting ready to leave the office.

Checkout clerks should also function as part of the billing department. If they input the doctors' charges while they have the charge slips right in their hands, they take a significant burden off the billing clerks. Charge codes should also be posted at the time of the visit, rather than be batched for later processing. Practices that do time-of-visit posting can get bills out in 48 hours; it usually takes two weeks or more in offices that do batch posting. The delay can affect the collection ratio significantly.

In most primary care offices, one checkout clerk can handle three to five doctors. If the practice has more than five doctors, or if five-minute visits are common, as they are in specialties like dermatology and ophthalmology, more than one checkout clerk may be required.

In small practices, the checkout person will also back up the receptionist, help with filing, and/or do billing. In a solo practice, the checkout clerk and the billing clerk might be the same person. If you have a separate checkout clerk, you should pay her $9 to $14 an hour; if she does both checkout and billing, you may have to go somewhat higher.

Billing and Collection Clerks

In too many practices, the billing department is simply "out of sight, out of mind." Because physicians don't have much contact with billing clerks, doctors often don't hire enough of them. As a result, the clerks spend most of their time filing claims and do very little collection work.

An average three- or four-doctor practice needs two or three billing clerks. These staffers should "scrub" claims to make sure they have all the required information, submit the claims, produce statements for self-pay patients, post payments, challenge denials of claims, and pursue unpaid bills.

Under ideal circumstances, with state-of-the-art computer software, one billing person should be able to handle about $1 million worth of claims per year. That assumes the checkout clerk is entering charges. It also assumes the practice has a lot of Medicare patients, is submitting claims online, and is using electronic remittance advice from Medicare carriers.

If your practice is oriented to Medicaid, managed care, and union patients, cut that estimate to $500,000 worth of claims per clerk. The more difficult it is to collect payments, the fewer claims an individual can handle.

Competent billing clerks who understand coding and computer systems don't come cheap. In the New York metropolitan area, for example, they make $12 to $18 an hour. Don't skimp: If you pay less than the going rate in your area, you're likely to get poor work, high turnover, and low collections.

You may want to consider outsourcing at least some of your billing work. By having an outside firm dun insurers for claims that are more than 120 days old, you can free up your staff to pursue more recent claims, which are more likely to be paid.

It's generally unwise to hire a billing company for all your billing work, however. For one thing, they'll charge you plenty—7 to 10 percent of revenues. For another, you won't have a billing person in house to back up other staffers when needed. But if you're having trouble finding competent billing people, you don't want to spend a lot on a practice management system, or both, outsourcing the whole process could be the way to go.

Office Managers and Administrators

If you have more than three employees, you need an office manager to supervise day-to-day practice operations. In small offices, the office manager typically does the billing as well. But when you have three or more doctors in your practice, you should hire an extra billing clerk and let the office manager be a full-time supervisor.

A good office manager will handle operational and personnel issues so you don't have to worry about them. She'll make sure that any problems at the front desk get resolved, that claims are filed and payments posted in a timely manner, and that you have all the supplies you need. She'll also play a key role in training new employees.

She won't do strategic planning or financial reporting, though. For these more sophisticated tasks, you need a consultant or an administrator with specific expertise in those areas. Office managers can run a five- or six-doctor practice quite well, although they might need some outside consulting help. Larger groups hire administrators, some of whom have assistants to handle operational details.

An office manager typically makes $45,000 to $55,000 a year, but some earn as much as $75,000. An administrator is usually paid $75,000 to $120,000. If a practice is grossing $8 million to $10 million, a competent executive's contributions can easily justify this salary.

Midlevel Practitioners

Some practices hire one or more nurse practitioners or physician assistants to handle overflow business. But midlevels aren't right for every office. A soloist who needs someone to share call should take on an associate or partner. In contrast, a three-doctor group that has adequate call coverage but needs help in the office may consider an NP or a PA.

A midlevel must see a certain number of patients a day to cover her costs. That includes not only her salary—which averages about $65,000 for an NP and $62,000 for a PA—but also an allocation for malpractice insurance and other overhead costs. If your overhead is 50 percent of gross, you should double the midlevel's salary and add in a little profit for yourself to arrive at the amount of revenue she has to generate to justify the hire. From that, you can figure out how many patients she needs to see.

Don't be bashful about informing the NP or PA of this expectation when you interview her. No matter how dedicated and hard-working she is, if she doesn't handle her share of patients, you'll come up short.

Technology has an impact on staff structure

Computerization can significantly increase efficiency and revenues, while reducing the amount of staff time spent on simple, repetitive tasks. Electronic claims submission, for instance, saves time and reduces the number of errors in claims so staffers won't be resubmitting as many. And electronic remittance advice can cut the time needed to post payments by a couple of days a month.

Scheduling software allows multiple employees to access the appointment schedule simultaneously, so several people can book appointments at the same time. Such a program can also generate recall notices, so you needn't have an employee spend two or three days a month going through appointment books and creating recall notices by hand.

Technology isn't the only way to improve office efficiency. Simply color-coding the tabs on your chart folders alphabetically, for example, can save a substantial amount of filing time.

Every hour your staffer saves is time she could devote to something more productive—and that means more money in your pocket.

The author is a certified health care business consultant with Healthcare Management and Consulting Services in Bayshore, NY.

 

Michael Wiley. Practice Pointers: Is your practice staffed correctly?. Medical Economics 2002;12:66.