Physicians Practice - October 2008 - (Page 89)

IN PRACTICE DON’T LET STAFF COSTS STIFLE PROFITS BY BOB REDLING HOW TO KEEP LOYAL STAFF ON BOARD WITHOUT OVERPAYING Are you hearing footsteps behind you? It might be staff salaries and beneﬁts creeping up on your practice’s proﬁts. The Medical Group Management Association (MGMA) culled cost ﬁgures for multispecialty groups over the past ﬁve years and found that stafﬁng expenses had risen by nearly 12 percent, from $177,000 per physician in 2002 to almost $198,000 per physician in 2006. Even though many physicians increased clinical production during that time period — seeing more patients and doing more procedures — stafﬁng costs still consume more than 30 percent of medical revenue IN SUMMARY The cost of salaries and beneﬁts for clinical staff as well as administrative and business employees is a rising burden to many medical practices. National surveys indicate that staff expenses consume on average just over 30 percent of a medical practice’s annual medical revenue. Instead of cutting staff or freezing wages, experts suggest physicians reassign staff to help increase provider production. National surveys also indicate that the best-performing medical practices tend to be the ones with more, not less, staff per physician. Medical practice experts suggest setting up a salary grid and keeping it updated with local market conditions to control staffing costs. A well-maintained grid also can reduce employee friction over wages. Awarding bonuses for good performance, giving extra time off, and allowing ﬂexible work schedules are other tactics that can keep employees happy without inﬂating stafﬁng costs. on average. And that’s after payers have taken their contracted discounts. What’s a physician to do? Cut staff to save money? Freeze wages? None of the above, suggests Donald Skinner, a Carroll, Iowa, family physician. Skinner, whose practice is part of the large physician-owned multispecialty McFarland Clinic PC, warns that getting lean and mean with stafﬁng just makes it harder to produce revenue. “We’ve taken the tack in our ofﬁce that we will try to maintain our stafﬁng levels in order to maintain maximum efﬁciency for our providers, which is what drives the revenue stream,” Skinner says. His ofﬁce, one of the McFarland clinics’ 21 practice sites across central Iowa, houses 11 physicians who are supported by 45 clinical and administrative staff. Many of the group’s business functions are handled by a central ofﬁce; otherwise, its employee head count would be even higher, he says. “Our ability to raise prices is near zero, but even in central Iowa we feel pressure from other medical groups and local hospitals to be competitive in the marketplace for staff,” Skinner says. OCTOBER 2008 | PHYSICIANS PRACTICE | WWW.PHYSICIANSPRACTICE.COM 89 http://WWW.PHYSICIANSPRACTICE.COM

Table of Contents Feed for the Digital Edition of Physicians Practice - October 2008

Physicians Practice - October 2008 Contents Another Reason to Go Cash-Only? Letters How ’Bout Them Gas Prices? Second Opinion: Oh, Canada! Noteworthy Cover Story: Fixing the Leaks: How to Tighten Your Money Spigot Navigating a Lawsuit Ask the Experts The Administrators Desk: What’s Your Mission? EMR: Help or Hindrance? Dealing with Dr. Dangerous E-Mail Abuse Primer The Road to EMR Interoperability Don’t Let Staff Costs Stifle Profits Coding Classifieds Advertiser Index

Physicians Practice - October 2008

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