Attention to the business management side of a medical practice with multiple providers is critical in order to thrive. Patients are less willing and less able to pay for the level of health care which they have come to expect. There will clearly continue to be governmental, employer and third-party insurer concerns with limitations on the amount of money physicians will be paid for services. These changes in the environment will force group practices to be more tightly coordinated and organized. Business planning will no longer be a luxury but a necessity. Multi-provider practices should establish long-term strategic plans (3-5 years) and then monitor themselves against these plans. Practice decisions can no longer be made on gut feelings or emotions; they must be made on the basis of critical self-evaluation, concrete data and a knowledge of their practice environment.
Most practices’ overall approach to practice governance has been much more in tune with the “small practice” philosophies of the past than with the business into which medicine has developed. To compete in the ever-changing health care environment, practices must develop a more businesslike approach to practice, both technically and philosophically. A good organizational structure is the basic foundation for good business. Developing a business-like philosophy should not cause practices to lose sight of the most important part of what they do…care for patients. Instead, it should help practices provide better care through more efficient routines, more available time on the doctors’ part and expanded clinical services.
The first step on the organizational structure ladder is the physician-level leader or “Managing Physician” as it is most commonly known. There is no doubt that a group practice can make physician-level decisions on a democratic basis. However, one physician should have primary responsibility for providing group leadership, managing the practice, overseeing finances and, in turn, reporting on relevant issues to the shareholders or members, conducting group meetings, encouraging group consensus, and assisting to resolve disagreements.
Although a Managing Physician is not totally in control of the group, it is his/her responsibility to know what is going on within the practice on all levels and to present the necessary discussion items to shareholders with recommendations for needed changes. The Practice Administrator reports directly to the Managing Physician. This assures that one physician is constantly informed of what is going on in the practice from a business, personnel and financial point of view. It is important to remember that the naming of a “Managing Physician” does not hand over total control of the practice to any one person. Instead, it develops an effective chain of command for the day-to-day management of the practice and gives the physicians a recognized leader to make some basic day-to-day decisions without the need of formal involvement on all of the physicians’ part.
It is typical for the Managing Physician to assign specific projects to other physicians so that no one person carries the total burden of investigation. This is a good way for each physician to be involved in the overall management of the practice. In those instances, however, the Managing Physician assigns the tasks and ensures that these tasks are reported on and considered by the group. The introduction of such a leadership structure is something all of the physicians must agree upon. Often groups fail to recognize the need for an organized management structure to provide the group with higher-level leadership. Groups that employ Practice Administrators without this physician-level leadership are frequently disappointed because of their inability to appropriately direct the Practice Administrator’s efforts.
Implementing the Managing Physician Role
Many practices have a physician who is charged with practice management duties; however, the role is frequently not vested with any authority and is too narrowly defined to be effective. It is essential that the role of the Managing Physician be clearly defined as to what authority and responsibility the position entails. Below are some of the specific responsibilities that I recommend be handled by the Managing Physician:
- Serve as chairman of the shareholders’ business meetings, preparing an agenda for each meeting and assuring that the meeting’s decisions are carried out.
- The Managing Physician also should have the authority to assure that the physicians are all conforming to the practice rules and procedures. He/she would have the authority to focus on physician lateness, patient satisfaction issues, inattention to details, and any other disregard of specified practice rules. No one physician, including the shareholders, should be exempt from the rules set out for the good of the practice. The Managing Physician must have that authority, or else he/she will be ineffective.
- Assign tasks to the Practice Administrator and outside advisors and see that those responsibilities are properly handled. The Practice Administrator will have a variety of responsibilities for the actual running of the practice, but he or she will have definite reporting requirements. The Managing Physician and the Practice Administrator should meet weekly or bi-weekly, even if only for 15-30 minutes to stay abreast of current issues in the practice.
- Make all routine decisions and have them implemented satisfactorily. This does not mean that the Managing Physician has the final “say” on everything within the practice, for the other shareholders need to have input as far as the “big picture” items are concerned. For example, the authority to borrow money, hire / terminate physicians, and so on should be discussed among all shareholders, but the Managing Physician would have the ultimate decision for all day-to-day concerns. The shareholders should be willing to give the Managing Physician this authority and then stay out of the decisions.
- Responsibility for signing checks, approving accounts receivable write-offs, changing billing procedures and so forth, working in conjunction with the Practice Administrator.
Being Managing Physician will require that physician to spend time and attention at it. He/she cannot hope to accomplish this if not given the time to act as Managing Physician. The Managing Physician should be permitted to cut back patient activities when necessary so that he/she can devote the necessary time and attention to the running of the practice. In the event that the Managing Physician is not able to reduce their patient hours due to concerns for personal compensation, an annual stipend may be paid to the Managing Physician for personal time outside of the scope of patient care directed towards these activities and responsibilities. In groups that divide income equally among shareholders, it is not necessary to have separate pay for the Managing Physician’s administrative duties if they are allowed to cut back on clinical responsibilities.