Physician practices are being pulled in one direction by today and in another direction by tomorrow. Right now, most of you are struggling with declining reimbursements, increasing operating costs, and severe staffing shortages. Tomorrow you'll be struggling with all three of those challenges, plus a (likely) influx of new patients and mounting pressure from federal and commercial payers to improve quality of care while reducing costs.
"Everything looms before us," says Loretta Swan, who oversees daily operations at 40 small- to medium-size clinics in and around Tyler, Texas. "We have to really tighten our belt and reduce our cost, but we need to do this without affecting our patient care."
It's a lot for any practice to handle. But despite the mounting challenges, Swan, the vice president of operations at Trinity Mother Frances Hospitals and Clinics, says a strategic approach to staffing can provide a better outlook for your practice.
She would know. Changes made at Trinity over the past year, including staffing adjustments, have saved the organization several million dollars, she says. And she stresses, those are "sustainable savings."
Here's how Trinity did it, and how experts say you can restructure your staffing strategy to help your practice thrive now — and in the future.
Dealing with today
In response to declining reimbursements and increasing operating costs, many practices are rethinking their staffing structure to support "volume-based" staffing, says Gary Van House, the consultant who helped Trinity through its changes. That means implementing changes that allow your practice to operate at its highest level of productivity at the lowest cost. "If they have excess staff, they need to dispose of them," he says. "… It's absolutely mandatory in today's environment that they take those costs out."
Van House, who is the managing director of Huron Consulting Group in Chicago, suggests practices begin a volume-based staffing analysis by using benchmarks to assess whether their staff is right-sized for success. The Medical Group Management Association (MGMA) Cost Survey Report for instance, shows the amount and type of full-time equivalent (FTE) employees needed at a practice per 10,000 work RVUs. This information is also broken down by practice specialty. "It's a more structured model of looking at how many staff you need per office, back office, based on really the volume of patients and revenue through the practice," says Van House.
This is the strategy Trinity used, and though it found it needed to reduce staffing in some areas, Swan says in other areas of the practice the analysis lead to staffing increases, such as additional nonphysician providers and physicians at some of the clinics. "The more productivity there is, then obviously the more staff you can support," she says.
Swan is on to something. Though it might seem counterintuitive, some of the most successful practices have the highest number of employees, says Brian Baker, a consultant with Baker Healthcare Consulting Group in Nashville, Tenn. A former practice administrator himself, Baker points to the MGMA's Performance and Practices of Successful Medical Groups Report, which finds that practices with the highest number of FTE employees per FTE physician are the most successful.
Practices also need to assess whether their staff is assigned the right responsibilities, says Chuck Gooder, a former administrator and senior adviser with Integrated Healthcare Solutions in Minneapolis. Look at job descriptions and "match requirements for operational needs with the kind of personnel that would be the most cost-efficient," he suggests. In other words, ensure that no staff member is overqualified for his responsibilities.