Physicians Practice - July/August 2008 - (Page 70)

WHAT WENT WRONG “them” (the rest of the staff).There was no real effort to integrate the satellite ofﬁce staff into the larger employee pool. The lesson: Decide early who is in charge. The politics involving the president of the group and the onsite physician leader must be openly discussed, and a working Collect good background information on the future location. The president evaluate the competition in the area. Consider your own resources. of the group and the business manager should appoint a small subgroup to work with a consultant (if the project is large enough) to estimate the needs and cost. A consumer-oriented approach consistent with the group’s strategic plan is WHO’S THE BOSS? It is not enough to hire a good business manager. A single designated physician — not more than one — must be responsible and accountable for the new project. Next, review the practice’s human resources (physicians and ofﬁce personnel available) and their ability and desire to deliver the proposed service. How will this new ofﬁce affect your lifestyle and that of your employees and colleagues? How will travel time affect productivity? Are staff prepared to cover for each other as a single unit? Find a captain. It is not enough to hire a good business manager. A single designated physician — not more than one — must be responsible and accountable for the new project. The designee must acquire knowledge about the project, visit similar practices, and seek advice from other professionals independent of the business manager. In our case, no single physician took “ownership” of the project or budget, and several physicians assumed others were involved in assisting the business manager with the budget. It turned out that no one had! Develop a pro forma budget based on reasonable data. The most important relationship should be established. In this case, a vacuum existed because of a lack of communication. Name the “sacred cows” and agree on which are up for discussion and which are not. Every group has its “sacred cows” — things it will not sacriﬁce or changes it will not make, no matter what — and these should be thoroughly discussed up front. Ideally they should be limited to basic principles of quality patient care and, occasionally, lifestyle issues. All other issues should be moved into the fair-game column. For example, our two separate, pre-existing facilities and staff should have been taken off our verboten list. None of the physician groups at the three locations were willing to cut staff or expenses at their particular sites. In essence, each location was operating as an independent entity, not as a single business unit committed to being proﬁtable together. 70 | PHYSICIANS PRACTICE | JULY/AUGUST 2008 needed, taking into account market research (actual data and demand for services). Prior to contemplating a satellite ofﬁce, the practice must ﬁrst look at the demographic data in the city it is contemplating. Does the area have enough of the speciﬁc target patient population in terms of age, gender, education, ethnic makeup, and income level to be suitable for the specialty location’s success? For example, suppose you are considering opening a satellite ofﬁce to provide cosmetic services for a mostly female, educated, high-income patient base. Go to www.factﬁnder.census.gov, and check the demographics of the relevant ZIP codes. Are there enough of your targeted patients living in the area to support your practice? Also consider the trafﬁc around your proposed location, visibility of your proposed ofﬁce from roadways, and highway access. And be sure to part of the decision about whether to start a satellite ofﬁce is your ﬁnancial feasibility analysis examining the costs and revenue projections. Based on this analysis, you’ll create a budget that forecasts revenues and projects expenses — a pro forma budget. The budget process, in this case, starts with a “zero base,” meaning that it does not start with the previous year’s expenses as a baseline like in most established-practice budgets. Almost the entire budget process rests on volume projections. Our manager based her revenue projections on faulty volume projections borrowed from a similar established practice. She spent large sums of money on renovation, furniture, and trimmings. Why was this not evident? Because the expenses were rolled into a bank loan for equipment and other necessary expenses, and since there was no immediate cash outlay, no one asked serious questions until the ﬁnal bank WWW.PHYSICIANSPRACTICE.COM http://www.fact?nder.census.gov, http://WWW.PHYSICIANSPRACTICE.COM

Table of Contents Feed for the Digital Edition of Physicians Practice - July/August 2008

Physicians Practice - July/August 2008 Contents The Bigger Picture: Battle Royale in the EMR Market Letters Physicians Practice Pearls: Hire Right Noteworthy Cover Story: Healthcare Reform: Voting for Change Patient Relations: Dealing with Problem Patients The tech Doctor: Is Self-Service Medicine Inevitable? Technology: Do EMRs Make You a Better Doctor? The Guide Idealab: Cash-Only Care Still Works The Administrators Desk: Who’s in Charge? Ask The Experts What Went Wrong: ‘Why Our Great Idea Didn’t Work’ Coding Start It Up: How to Launch a Practice: Operations Partnership: Don't Let Partner Conflict Destroy Your Practice Appraisals: What’s Your Practice Worth? Getting Advice: How to Hire a Consultant Classifieds Advertiser Index

Physicians Practice - July/August 2008

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