5 Chronic Mistakes That Can Sabotage Your Medical Practice

No matter the size, running a practice is a challenge. By being aware of — and more importantly steering clear of — some common but unrecognized pitfalls, you can increase your odds for success and profitability.

A physician who in the past has led medical groups as both chief medical officer and president, Gerda Maissel, MD, president of My MD Advisor, a private patient advocacy group, has seen the good, bad, and ugly of practice administration. There’s a spectrum of infractions: anything from doctors making inappropriate jokes with staff or patients, to failing to establish key relationships with other critical entities, says Maissel.

“Being a good physician who provides value is important in building a practice,” explained Maissel. “But it is not the be-all and end-all.”

While the number of physician-owned practices is declining, just under 50% are still in private practice, according to the American Medical Association’s 2020 survey. There’s also a continuing trend toward larger practices. Whatever the size, the physicians are responsible for strategy, marketing, building the practice, and maintaining profitability. 

Catherine Lightfoot, CPA, CHBC, president of the National Society of Certified Healthcare Business Consultants (NSCHBC), has her finger on the pulse of what’s right and what’s wrong when it comes to running a medical practice. Although she says there are no hard and fast rules on how to run a thriving medical group, there are common mistakes that physicians often don’t recognize.

Here are the five key mistakes that commonly crop up, and the experts’ thoughts on how to prevent or fix them:

1. Failing to engage in outreach activities and community efforts to build your practice.

Yes, physicians earn good reputations through dedicated work, and that often precedes them when it comes to building a practice. But assuming that hanging a shingle backed by strong credentials is all it takes for success is akin to building a website and assuming people will find it organically. Maybe there was a time, in a small community, where this was good enough. But no longer.

It’s important to plan to get your practice and your name known to potential patients. “Most physicians think that means advertising, but that’s not the complete case,” Maissel said.

Much of the equation involves ensuring availability. This means setting office hours that work for your target audience of patients, and then ensuring you stick to those hours. This extends beyond scheduling your current patients and into referral patients, too. And it’s particularly true while in the building phase of a new practice.

“If one of your colleagues calls with a referral patient, and they consider the matter urgent, you need to heed that,” explained Maissel. “So have a breadth of availability for these referral cases.” Through word of mouth, you’ll get a good reputation for patient care and availability, and that will go a long way toward helping to grow your practice.

Establishing a culture that doesn’t involve canceling and rescheduling patients is part of the scheduling equation, too. “I’ve seen the full gamut of cancellation policies, ranging from a month’s notice on changes to 3 months’ notice,” said Maissel. “It all gets at the same issue, which is failing to set up a culture where doctors don’t change their schedules and leave patients hanging.”

In the end, wonky scheduling, cancellations, and a lack of respect for the urgency of referrals can cost a practice. Forge a reputation in reliability and word will get around, in all the right ways.

2. Not having enough oversight of your outsourced billing service

Billing is one of the biggest pieces of running a successful and profitable practice, yet too many practices ignore it once they’ve handed it off to a billing company. That can cost you in more ways than one, said Lightfoot. “Billing changes all the time, and if you’re not monitoring your billing partner, you don’t know what you’re getting,” she said.

Lightfoot said that a decade ago, billing was much more straightforward — essentially, you did the work and received payment. Today’s complex insurance, Medicare, and Medicaid environment have changed the landscape. “Now you have to fight for every dollar you’re billing,” said Lightfoot. “Rates get cut all the time, you might miss out on a claim, and the rules are constantly changing.”

The solution for many practices is to outsource billing, which Lightfoot supports. “They specialize in this, and that’s a great start,” she said. “But it’s not as simple as handing it off and forgetting it.”

Instead, ensure your internal staff is up to date on all things coding and billing so that they can catch what your outsourced billing partner doesn’t. Your internal staff should be prepared to carry out coding, check coding, and stay on top of the billing company if they aren’t processing claims quickly enough. For instance: if there’s a denial, how many times will the billing company go after that money?

Other questions to ask when entering a billing relationship: What does the billing company expect from your practice? Do they communicate what needs to be worked on or fixed? Are they providing you with monthly reports? “You want to make sure you’re getting those reports every month and reading them over carefully,” said Lightfoot.

This means that if you have a large practice, you should have a point person within your billing department to handle the relationship with your billing partner. If it’s a smaller practice, the task will likely fall to the office manager. The ‘who’ isn’t important, but having someone on the case is.

Another important aspect of this billing relationship is understanding what you’re receiving for your payment. “Sometimes going with the cheapest offer amounts to a billing partner who isn’t working on those claims and denials as much as they should,” said Lightfoot. “I’ve seen fees anywhere from 4% to 9%, and the lower end can mean you’ll need to chase down every penny.”

3. Neglecting to forge the right relationships in the community.

Another common mistake physicians make is failing to develop the professional relationships that will help you thrive. Successful practices need to establish relationships with the right people and organizations. While the occasional afternoon of golf used to serve this purpose, today outreach must go beyond that, said Maissel. “You need to create relationships with hospitals and hospital-based practices because you may have value to them,” she said. “You should also get into some sort of relationship with your local ACO (Accountable Care Organization) or PHO (Physician Hospital Organization). Identify the leaders there and let them know you exist.”

Establishing these relationships goes beyond that first step of introducing yourself, or you risk losing their benefits. You must also nurture and “fertilize” these relationships in an ongoing fashion. “For years, as the head of employee practice, I had a competitor who would go out of his way to invite me to lunch regularly,” said Maissel. “When there were opportunities for his group, I would connect him. I wouldn’t have done that had he not worked on our relationship over time.”

The adage of “it’s not what you know but who you know” holds up here. If you don’t do the reach out to the right people and organizations in your community, you will have a harder time succeeding as a practice.

4. Hiring the wrong person/a family member for the job.

When starting a new practice, or if you’re running a small practice, it can be tempting to look for affordable or reliable staffing from among family members or friends. That’s fine if your family member or friend is also qualified for the job. If they aren’t, however, you might be setting up for failure.

“When you hire someone without the right qualifications, you need to be willing to train them for the job,” said Lightfoot. “Doctors don’t have that kind of time.”

Too often, Lightfoot said, a doctor will have a position like officer manager open and fill it with an in-law, whether he or she is experienced or not. “Now you have someone in the role who is unqualified, and the rest of the office can’t speak up about that because it’s a relative to the lead physician,” she said. “That doesn’t create a good environment for anyone.”

Also, a set up for failure is hiring someone who might be qualified, but not possessing the right personality for the role. A front desk position, for instance, should be held by someone who’s a bit upbeat and able to multi-task. “You can’t put a shy, quiet person in that job,” said Lightfoot. “So, if you see a person with 10 years’ experience in a medical practice, but they’re reserved, what will happen? You must think about this when hiring.”

One PA recalled a small family practice in which the lead physician’s wife was the office manager. To save money, the wife removed lights from the staff restroom and staff lunchroom and declined staff requests for earned vacation. The staff felt unable to speak up, and they — and all new office staff members — ultimately left the practice.

5. Overlooking the importance of acting like a professional and respecting your staff.

This one might seem obvious, but many physicians get a bit too comfortable in the office environment, said Maissel. This can encompass a whole host of bad behaviors, from making inappropriate jokes to staff and patients, to trash-talking colleagues. None of this behavior is acceptable and can set you up for things to go wrong, especially when good labor is hard to come by. “Your staff is made up of people for whom 50 cents an hour is meaningful,” she said. “If they don’t have a warm, supportive office, they will look elsewhere.”

This is especially true of younger people now entering the workforce — they are less tolerant than generations past of egregious behavior. Try to establish a professional, yet nurturing environment for your staff. “Inquire about things that matter to them,” said Maissel. “Small talk can go a long way. See them as human beings, not cogs in the wheel.”

Inappropriate and uncaring behaviors will give physician leaders a reputation, one that sticks. “The medical community is pretty connected, and if you behave inappropriately enough times, it will circle back to you,” said Maissel.

Launching, and sustaining, a successful medical practice is never a given, but mistakes are. With the right approach, however, you can avoid these common — and impactful — errors and set your practice up for success.

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