Practice Management Tips and Techniques

Creating an Annual Work Plan

We have just ended another year, and medical practices are faced with the prospects of closing out one year, planning for the next at a time when we are all busy with personal and professional responsibilities. While the task of running a medical practice never ends, it can be aided by developing a creative plan to spread many of the larger tasks and responsibilities out into an Annual Work Plan. By setting aside some time in the middle two weeks of each month for the review, analysis and planning of specific elements of the practice.

The following is an example of an Annual Work Plan that breaks up large tasks, not day-to-day management responsibilities into twelve segments.

January - Review Medicare Updates & Compliance Plan - With changes or updates in Medicare regulations and new RVU schedules, January is a perfect time to review those changes and at the same time undertake a broad review of your compliance program. Define how and when internal audits are going to take place and whether you need a minor update or a major overhaul to your current compliance procedures.

February - Review Last Year's Financial Results - By mid-February the last calendar year financial results should be in and finalized. The goal this month is to have a broad review of last years results against the last several years and try to determine exactly why the results ended up as they did -' good, bad or indifferent. Compare last years actual results with this years budget to make sure that the budget is realistic and achievable.

March - Review of Insurance Policies and Contracts - In the March begin an annual review of all insurance policies - from malpractice, liability, health, disability, workers comp, etc. Log all renewal dates, coverage levels, annual payment amounts and companies. The plan is that several months before each due date, you will either quietly shop for current rates and coverage levels or decide to get firm quotes. An analysis of all current contracts with third-party insurance plans should also help you define a negotiating strategy as they come up for renewal.

April - Marketing Review and Planning - During the marketing review, practice managers will want to look at all elements that promote the practice to the public. An analysis of referrals (which doctors are sending patients into the practice), a review of advertising effectiveness (Yellow Pages, media ads, etc.), a competitive analysis (understanding who are your main competitors and what they have to offer), and finally implement a Patient Satisfaction Survey so you understand first-hand what patients like and where improvements need to be made. The goal is to fully understand your patients' wants and needs, their demographics and make sure you are properly positioning the practice to gain a significant share of quality patients.

May - Technology Review and Planning - Increasingly, the implementation of new technology can lead to dramatic improvements in employee and physician productivity. Is your phone system helping or hurting performance? Is your computer system state-of-the-art or does it require manual intervention to complete routine tasks? Are you using the Internet for research, communications, promotion, education, and other things that make this an ideal delivery channel? How much time and effort would a move to electronic patient records have on the practice? The answer to these questions can help a practice begin a full cost-benefit analysis on these and other technological innovations that may lead to more a efficient operation and more productive employees.

June - Facility Review - In the short run your office space is a fixed cost. However, once a year a complete review of your office or offices should take place. If the space in convenient, comfortable, cost-effective and can handle anticipated growth, that's great. If there is not room for growth or major repairs may be needed or your landlord wants to pass on huge increases in rent, etc. then some real tactical planning needs to be done to begin to define options which should be reviewed. Anticipation and preparation are good habits especially when it comes to making major business decisions.

July - Longer Term Strategic Planning - Over the past few months a manager would have reviewed last year's results, been through all the insurance policies and contracts, reviewed marketing programs, accessed new technologies and undertook a complete facility review. Now is the perfect time to sit down with the physician owners of the practice and try to identify where the practice should be going over a three to five year planning horizon. There will be a true marriage of clinical and business aspects of the practice as the physicians will have the best idea of where the medical elements (new procedures, tests, drugs, etc.) are headed and the practice manager can identify the business aspects of how to make this happen. Even if this planning process does not lead to a formal strategic plan, it must lead to a consensus by all parties as to the direction that the practice should be headed and what needs to be done this and next year to prepare for implementation.

August - Task Analysis - The review of all work by practice employees is the beginning of a task analysis. Answering the phone is a task and that, and other tasks, may be assigned to a receptionist as part of an overall job description. It is vital that all employees fully participate in this process and help define each task and identify approximately how much time is spent with this task on a per day, week, month or per patient basis. Once all the tasks are defined, the manager should create a performance standard for each task. For example, the phone should be answered by the third ring. That is a standard of performance that is acceptable for the practice that wants to provide good service to their patients. Tasks and standards go hand in hand and the goal is always to provide superior patient service.

September - Personnel Evaluations - Economedix strongly feels that all annual personnel evaluations should be done at one time during the year, not on an anniversary basis. Also, that the issue of pay raises be divorced from the performance review. By handling the performance reviews just one month after the tasks and standards have been analyzed, those items are fresh in the manager's mind and they can be more objective during the evaluation process.

October - Job Descriptions and Reassignments - Over the past three months the manager has worked with the physicians to define the practice's longer term direction, gone through the task analysis and developed performance standards, then evaluated all personnel. Now is the perfect time to rebuild each job description to make sure that all tasks are assigned in a way that maximizes patient performance and productivity. This may mean reassigning tasks to different employees, retraining and cross-training programs. This proactive approach to review all job descriptions on an annual basis will make sure that jobs are done in a logical way, not "because this is always with way we have done it."

November - Detailed Cost & Pricing Studies - Toward the end of the calendar year, a detailed review of all costs should be undertaken. This includes employee costs, occupancy costs and supply costs. Any variable cost, especially equipment and supplies should be viewed to determine if the practice is getting the best possible prices, or if they have been overpaying because of a long-standing relationship with the supplier. This is also the time to review the price the practice charges for all standard procedures. Any price changes will have an effect on gross and net collection percentages, adjustments, and other financial elements, but an annual review is needed to ensure that the practice has receives fair compensation for their services.

December - Finalize Next Year's Budget and Plans - All the planning elements come together in December when a budget is prepared to map revenue, spending and profit expectations for the practice. Economedix believes in a Bottom-Line Budgeting process that can really help physicians target and track production levels and managers can control spending. December is also when employee raises for the next year will be finalized and any bonuses will be determined if that is part of the overall compensation plan.

A practice manager's job is never done, but by breaking up the large tasks and projects over a year's time, the job can become manageable. It is also important that the above-described planning programs not be done in isolation. A manager should not simply gather all the data then lock themselves in a room to review and analyze the information. This is a great time for delegation and team work.

This process should be open and the manager should ask employees to help gather the necessary information in the days or weeks prior to the review. The data and results should be shared with the physicians as part of a regular meeting and appropriate information shared with employees during staff meetings. Good communications is vital at all levels of the practice and if the employees play a role in gather the information, understand why changes are being made and what the short and long term plans are -' they will all help row the boat in the right direction.

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