Small Business Lessons for Physician Practices – Part 1 of 4: Human Resources

Laurie Morgan November 1st, 2011

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A happy, motivated, well-functioning front office team is critical to your practice’s health

The need for “special” management skills to run a medical practice is getting a lot of airplay lately.  Some people even argue that doctors should have MBA training in order to successfully manage their practices.  But academic business training often falls short in the day-to-day skills small businesses need to thrive – and these are the most critical skills that physicians and practice managers in small- and medium-sized medical practices need as well.

One of the most-noted weaknesses of formal business training is in the basics of effectively managing people.  Perhaps this is because interpersonal skills are thought of as intuitive, not teachable; or perhaps it is because the humans that make businesses run are literally thought of as “resources” in the context of analyzing strategic decisions.  Whatever the reason, the lack of understanding of how to effectively manage and motivate people has tripped up many a new MBA graduate.  For the MBA, though, the consequences might be a career speed-bump – while for a medical practice, failing to manage staff effectively can jeopardize the practice’s profitability. 

For a medical practice, staff represents the single biggest expense – so it’s crucial to invest those dollars wisely.  And, your office staff in many cases spends nearly as much time interacting with patients as you do.  The quality of these interactions colors patient feelings and opinions about your practice; if office staff are discombobulated or grumpy, that can even taint patients’ views of the care they receive.

The bottom line is, a happy, motivated, well-functioning front office team is critical to your practice’s health.  So, what does it take to get there?

  • Hire slow, fire fast.  This saying from Silicon Valley technology industry lore is even more valuable to a small enterprise like a medical practice.  It’s easy to underestimate the damage hiring the wrong people can do – and to overestimate how easy it is to fire them.  Much better to invest time in hiring well.  This is especially true when hiring a practice manager – the eyes, ears and guardian of your practice.  And when he or she hires the rest of the team, the same principle applies all the way down the line.
  • Strive to be clear.  It’s impossible for people to do well when they don’t know what’s expected of them.  Make sure your practice has clearly defined jobs and good documentation.  Make sure people know what it means to perform well.  Every employee should have an annual performance review – both to receive kudos for what they’ve done well and to set goals for development.
  • Communicate a mission.  A medical practice can be an inspiring place to work.  How many other organizations have the potential to save people’s lives?  But, if the staff doesn’t understand what drives the physicians to do what they do, how can they feel that their administrative tasks are part of that larger purpose? It’s up to the physician owners in a practice to set that mission, and practice management to carry it out.
  • Be businesslike and fair. Small organizations like medical practices have a tendency to be very informal – sometimes almost family-like.  That can be okay – unless there is a perception of favoritism, unfairness or a lack of work-life boundaries.  For example, consider a policy against hiring family members – or, at the very least, be sure that one family member is not another’s direct supervisor.  Rules about conduct – scheduling, cell phone usage, attire, e.g. – should apply equally to everyone.
    Perceived under-compensation is one of the main reasons people leave jobs at medical practices, so be vigilantly fair and businesslike about your approach to pay. Set salary ranges based on market data, and be sure performance-based and cost-of-living increases are implemented in a way that’s fair and readily understood by employees.
  • Build for the future. Having a plan for the future – for growing your practice – helps both physicians and staff stave off boredom (another key factor in employee turnover).  A growth goal could mean simply building a bigger practice, or it could be something personal to the physician partners – say, establishing a means to do charitable work or starting a clinical trials program.  Whatever growth means to your practice, having a plan communicates evolution, professional development and opportunity to your staff.   Invest in training where appropriate, and encourage employees to learn and develop new skills that will help your practice as it evolves.
  • Be present and appreciative. One of the main causes of unwanted employee turnover is, sadly, one of the most avoidable: people too often feel underappreciated.  Making your staff feel appreciated isn’t hard: it starts with being present.  Have monthly staff meetings where people can raise operational issues – your processes will improve and people will feel more trusted.  Set goals and offer small rewards – say, a pizza party in exchange for reaching a co-pay collection goal of 90% for a full month, or Amazon gift cards for the team when an improvement in no-show appointments is achieved.  These rewards don’t have to be costly to be effective – they just have to show you’re paying attention and recognizing good work.

Mastering all these aspects of “people management” can be challenging if you haven’t been considering these goals previously.  Managing physicians and the practice manager need to agree on these goals and work together to achieve them.  But, the payoff can be enormous – more productivity and a lighter office atmosphere, which in turn functions as a form of marketing to patients.  Start with a review of this list, and an honest assessment of how well you’re doing on each of these goals – and pick one to improve on each month until you’re hitting your stride.

Small Business Lessons for Physicians Practices is a four-part series.  Next installment: Marketing made easier.

Laurie Morgan is a management consultant with Capko & Company. She specializes in marketing, management and technology for medical practices and blogs about practice management issues at . Laurie has a BA in Economics from Brown University and an MBA from Stanford. Her most recent article for Getting Paid was Getting the Most From Your Third-Party Medical Billing Service.

Watch a webinar on Managing Your Medical Billing Team: Get the Performance You Expect now.

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