Practice Managers Succeed with Practical Know-how
By Dixon Davis, MBA, MHSA, CPPM
Health care provides opportunity to work in a variety of settings, from medical clinics to hospitals, and from long term care centers to home health. Within this industry there are many exciting employment opportunities. Physicians and other clinicians provide direct care to patients while the front office registers patients and schedules appointments. Coders and billers verify accurate and complete revenue flows, as auditors and compliance officers ensure the practice follows federal and state regulations. And then, there’s the practice manager who oversees, organizes, and directs all of these efforts. Effective practice managers are increasing in demand.
Most independent medical practices are owned by physicians who have very little, if any, training in the business side of medicine; the majority of their education and training is on providing excellent clinical skills, not in running a business. A practice manager who can effectively organize and manage a medical practice is crucial to the physician business owner.
Managers Are Essential to a Practice’s Success
Successfully managing a medical practice is one of the most challenging, yet rewarding, leadership opportunities in health care. The complexities of the revenue cycle and compliance regulations in our health care system, along with human resource knowledge and general business and management skill requirements, make this an exciting and demanding profession. Successful managers are those who have the skill set and expertise to ensure the mission and goals of the practice are met.
The industry places many demands on medical clinics, such as advanced technology, a complex payment structure, federal and state regulations, documentation and coding requirements, laws prohibiting certain relationships, and health care reform. These demands create an increasing need for managers who not only understand the basics of practice management, but who are able to apply these principles in real life situations. I have associated with managers who can talk about accounts receivable (A/R), denials, and even contract negotiations, but if they had to actually find a way to reduce A/R, to decrease denials, or to renegotiate a contract, they’d be in trouble.
Hands-on Approach Reaches Higher Success Levels
As with most positions, some practice managers get by with mediocre performance while others dive in and really make a difference. Some managers struggle to keep the business afloat while others lead, directing successful medical practices to provide quality services with financial strength. This is even more evident in small- to mid-sized clinics where the practice manager must be directly involved in all aspects of the clinic because there are no resources for “extra” staff. Here are real scenarios to illustrate my point:
Scenario One: This manager knows the basic theory of managing the financials of a practice, either through education or limited experience, and can talk about A/R and how the number of days in A/R needs to be kept low. When it comes time to meet with the billing supervisor or billing staff, the manager explains that the days in A/R need to be lower and directs the billing department to get the aging buckets in line with benchmarked numbers; however, the manager does it without providing specific direction or assistance. Without a practical understanding of how the A/R can be improved, the manager is only able to provide theories, not real life solutions, for the billers, which compromises financial success, as well as the confidence the billing staff has in their manager.
Scenario Two: This manager has received training in the practical application of practice management and not only understands the theory of A/R, but also the practical application of how to manage it. This manager also has practical skills, such as what tactics work to have clean claims, collect money due, manage denied claims, and administer appropriate adjustment policies. When this manager sits with the billing staff, he or she is able to more effectively make specific goals and plans, provide specific advice when needed, and get in and help out with specific functions when appropriate. When problems or shortfalls occur, this manager also can identify specific areas for correction and improvement because he or she understands the mechanics of what is making the engine work.
The principle of practical know-how illustrated in these scenarios also applies to many other duties of running a medical practice. Practice managers who possess the skills and practical know-how, as demonstrated in Scenario Two, can effectively lead and manage medical practices to a higher level of success.
In medical groups, we often see staff recognized at excelling in areas such as coding, billing, clinical skills, or customer service and are rewarded by career advancement—sometimes to a practice management position. These individuals may work hard and still fall short because they are not proficient in the skills necessary for the new breadth of responsibilities handed to them. Other times, we see staff that is very bright and excelling in their current position, but their career advancement is limited because their skills are too specific to take on more responsibilities. Both of these groups may be able to succeed and be knowledgeable in a medical management position if they can fill in that gap and learn the additional management skills necessary.
Training for Practice Management
Many scholastic institutions offer management degrees, including bachelor’s and master’s degrees in health care administration. I’m a proponent of education and believe it’s valuable to your career and your life in general. I understand, however, that a college degree is not an option for everyone and that simply understanding the high-level theory surrounding practice management—or business in general—is not going to be enough to truly help a practice maximize revenue, minimize costs, stay in compliance, manage staff and physicians, and prepare for the future of information technology (IT).
Whether you are a coder, biller, college graduate, high school graduate, or a manager looking to be more effective, it’s vital to understand the practical skills needed to effectively run a medical practice daily, and how to apply those skills for real success. It’s these basic skills people often either overlook or don’t know exist. Sometimes, so much time is spent learning high-level theory that the effectiveness in practicality is lost. Other times, experience and education is so focused that there is no opportunity to learn the necessary skills for effective management over several business disciplines. By understanding these basics, you can find success and fulfillment in this position.
Some say finding a great job opportunity involves a lot of luck. I believe luck is what happens when preparation meets opportunity. Opportunities in practice management are out there. Prepare yourself now to succeed in the opportunities that come your way.
Dixon Davis, MBA, MHSA, CPPM, has held senior leadership positions in independent physician groups and integrated health systems. His operational experiences include the implementation of EHRs, financial restructuring and improvement, acquisitions and divestitures of physician groups, managing several practice start-ups, and successfully leading organizations through change management.