Tom Ellis III

Over the years I’ve assembled many, many budgets for physician practices.  Some of these were done for banks and financing, some as a footprint for new partners, some for one- and three-year plans for benchmarking growth, and a variety for revenue and cost line items.   

In assembling budget costs, I’ve always been surprised at the attitude taken toward the cost of front and back office staff. Most physicians have wanted to allocate the minimum amount of money for these crucial employees, setting the cost guidline based on the lower end of salary ranges found on websites or paid by their peers.

Hiring these staff members has often been treated with a “not my responsibility” approach. The typical path seems to be hire an administrator first (a subject of a future article) and then leave it up to him/her to assemble the non-clinical staff. And usually this is done with little input from the physicians.

In every other small business I can think of, the owners usually set the standards for, and are involved in, the hiring of the people who are the “face” of the business. The owners usually want to be part of selecting those who are the first to interact with prospective customers, be it on the phone or in person.  

This generally is not so with most small medical practices. Since small practices often lack a mission statement, there’s no directive that sets the tone for the practice and guides the conversation about how to best handle patients and their families. As a result, a practice can end up with some terrible social media rating and negative comments that last forever on the internet.

So how do you assemble and direct a front office (and back office, who frequently deals with patient problems more than anything else) that will project the practice image you envision?  Here are a few steps to get you started:

1. Develop a general concept of how you want the practice to “show” to the public and your patients. You might want friendly, smiling faces. Or a very professional, all business approach. Figure out what you want (usually a reflection of how you interact in the exam room) and put it down on paper. If you have examples from other practices, note these. Better, visit them and see for yourself.

2. Hire an administrator with experience, and don’t err on the cheap side. This person will be running 

for you and has to engender the trust of all, while fully understanding and developing your business concept. Make sure he/she understands billing and collecting. See if he/she has had any conflict resolution training. Prepare a list of “what if” questions that address some tough subjects, especially angry patients, to ask at the interview. Check references!

3. Be as specific as possible with the administrator regarding the qualifications for personnel they will be soliciting. When the administrator has narrowed the lists down for each specific job, sit in on the final meetings. Ask questions, first as the doctor, then take off your lab coat and be a patient, looking for answers with your problems. 

4. Don’t be cheap. Really good employees are hard to find. An extra $1.00 per hour for a strong, experienced employee may be worth thousands.

5. Remember there’s a huge income and education disparity between you and staff personnel so try not to be intimidating. Once hired, all of your employees need to feel like they are going to be both valued and, this is important, respected for what they bring to the practice (i.e., the respect they bring is “owned”). Most medical practices follow a rule that employees  “earn” respect-but there’s too much at stake for that approach and it implies hiring people who do not bring the level of experience or work expertise you need to be successful from day one.

6. Meet weekly with the administrator and develop a reporting format that covers basic financial and operational matters, as well as patient comments on staff, staff interaction/problems, etc. Don’t avoid the small stuff, because you’re building the structure of your practice and how the employees need to fit within it.

7. And once you’re up and running, make sure you remember to interface with them. I’ve seen too many practices where the doctors don’t make time for the employees except at the holiday party, and that’s not enough. 

8. Finally, make sure you meet with your partners and have a frank conversation about the way staff issues will be handled. I worked with an OB years ago who was part of a group and a terror with the staff. None of her partners had the nerve to tell her she needed to stop and direct her problems to the administrator, rather than screaming at the staff. Chaos ensued, as you would imagine. 

Every practice is different. So there’s no exact model about how to evaluate staff personality in the design of your practice. It’s going to take some time, and some work.

But it has a huge impact on your medical business, maybe even equal to the clinical relationship you want to develop.  It’s a high priority on the front end and will continue to be every day. Don’t overlook it!

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Non-clinical staff play an important role in ensuring a practice runs smoothly and provides high-quality patient care. Keep these tips in mind when assembling your practice’s staff.

Don’t discount the value of non-clinical staff

I am working with two physicians who are leaving a large group because they are dissatisfied with the back-office operations and billing situation. Years ago, they had their own practice and did everything in-house. Now, three years later, they want to recreate the practice of their past.

These experienced docs operated a successful private practice in another market before coming my way. After a lot of discussion, it became apparent that they are not only strong clinicians who know what support they need from their clinical staff, they also have the characteristics of good leaders who know how to motivate a small staff and engender a healthy “family business” type environment.

We’ve found them a great independent practice association to work with, one that provides good in-network rates and a slew of value-added services and vendor connections to help make it a smooth transition. In fact, there’s only one real issue.

I’ve worked with a host of practices over the last 10 years. Some billed in-house. Some billed in-house but employed a certified coder to oversee things. Others used a certified coder to oversee outsourced billing. Others were cash only. And some were out-of-network, a whole other Pandora’s Box of issues.

Billing is always a hot topic with docs. I’ve met many who have felt no person or company could collect their money better than an in-house staff. I’ve met others who shied away from outsourced billing because of a bad story they heard years ago from a peer, and there are certainly some bad stories out there.

Anxiety is always present when turning over the collection of your money to people you don’t see every day. Should it be?

Unless you’re an all-cash practice or have a practice that is predominantly Medicare or Medicaid, I’ve come to feel like outsourced billing is the way to go for a number of reasons:

Government and hospital reporting requirements

This is, of course, a short list. In fact, each topic can generate a lot of discussion and comment. It’s almost impossible for someone not dealing with payers every day to understand how they are constantly changing reimbursements, reporting requirements, and even some rate structures. This can be especially endemic within the government plans.

I think the bigger questions to ask are these: Can a billing company stabilize my cash flow, aggressively address my revenue cycle, and keep me up to date on all billing-related matters that might impact my practice? Can they help my staff and me learn how to code more effectively and understand what payers are looking for in complex coding situations? Is their pricing truly expensive given what I would have to create within my own office and, more importantly, manage?

Focus on that last word. Most docs I know don’t want to take on another internal management position where they are going to be forced into a learning curve on a subject with extreme levels of detail and risk. In fact, in most instances where I’ve seen in-house billing, the docs start by being dedicated but fall away as their private practices and lives becomes more demanding. Managing the billing effort and staff becomes a pariah of a responsibility. Cash flow usually suffers in one way or another. Only, no one noticed until their salary check was affected. Then crisis mode and high anxiety levels set in.

It’s not always about cost. It’s about the value realized for the expense. You have to ask a lot of questions. You can rely on your peers for a variety of opinions, good and bad stories, and cost data. Or, you can work with a consultant who’s been down this road before, who can analyze what you need and be there to ask all the right and necessary questions.

You need to find ways to effectively use your time and manage the nonclinical parts of your practice as healthcare reimbursement becomes more complex in lockstep with the growing responsibilities of your clinical practice. Outsourced billing, when done right, is certainly one of them. And if the entry strategy is good, there should be no reason for anxiety.

Tom Ellis III has been a healthcare consultant in the North Texas area for more than 20 years and has worked with a variety of clients with a focus on physicians. More information on Tom can be found at 

The decision of whether to keep billing in-house or outsource is not always about cost. It’s about the value realized for the expense and the risk of not getting it right.

The billing conundrum

Two years ago, I fielded a call from a surgeon I knew of but had not met. Raised locally, she had left the state for undergraduate school, returning to her home state for medical school and staying for her fellowship. Heavily recruited, she wanted to stay close to home and her family, and accepted a position with a group of surgeons practicing at one of the area’s stellar hospitals.

Two years into a three-year employment agreement she was unhappy. In fact, she was angry, frustrated, worried, and greatly concerned about her future.

The genesis of her story is almost a clichÃ© in the problems that frequently crop up after a physician has been recruited by a group. And it’s easy to see where things went wrong. It all involves what I call the “failed entrance strategy.”

This doctor had been pursued by this group, pitching a great future, good salary, moving expenses, and even a signing bonus.  Two visits to her soon-to-be employer focused on where to live, meetings with all of the group members, a hospital administrator or two (representing her surgical sites), and a real estate agent to look at homes. Everybody seemed nice and she liked what she had seen.

A contract arrived shortly after the second visit. A lawyer was hired and they focused on the "eight things a medical employment contract must have," taken from a random google search. Her lawyer followed her lead. Within weeks the contract was signed and she returned her focus to her final year, relieved of the pressures of finding a job.

Barely two years later, she was miserable. What could have happened?

From my perspective, the group that hired her didn’t provide her with a complete analysis of what the job entailed, what they were going to do to help her build her practice, how her work would be evaluated, or a host of other things that should have been explored and explained up front.

You can’t expect a new med school grad to come ready with a complete list of operational questions. From my perspective, it’s a requirement that the hiring group provide much more than a “look-see” at the way the practice runs and provides data to its physicians.

Most of her complaints were around issues that should have been discussed and/or documented 

any contracts were assembled, much less negotiated.

For example, she never saw examples of the reports provided to each physician that outlined patient counts, charges and revenue. These turned out to be woefully inadequate, and belied some serious issues with the group’s billing practices. The practice had policies and procedures, but they only applied to the staff - there were no rules for the doctors. Governance was not in place. She was assured overflow, but as soon as she arrived everyone got very protective of their patient base and the overflow was far less that what had been promised.

Mentoring her in certain procedures was quickly abandoned, and she was left alone to do surgeries where she needed guidance (her surgical times on these cases were excessive as a result, which made the hospital unhappy). When the group decided to start taking call at another facility, she was included but not consulted, creating issues with her family. When the practice’s payer mix changed, she was given no notice about the financial impact this would have on her collections.

And why did patients with badly reimbursing insurance always seemed to appear on her schedule? This list wasn’t even half of the problems she recited. All of them could have been addressed, and many included as terms of her contract.

But this requires two things: First, that the practice is organized enough to provide this kind of data. Second, that they are able to communicate the full scope of the job requirements and how they will provide support and data to make the new hire a success.

 and now conditions had become toxic, beyond repair. (Ironically, her contract set out, in great detail, every issue imaginable related to leaving the practice, termination, etc.!)

The first step a graduate takes after leaving med school/residency/fellowship may be the most important they take outside of their academic career. In this ever-changing health care environment, graduates need to take the time to look at both the clinical and business environment they are entering. If necessary, they need to seek guidance to help them navigate these issues (which are woefully under-addressed in training), to make sure they ask the right questions.

But a hiring group can make things easier by going to great lengths to explain some of the following, providing documentation where available:

1. Practice governance. Most importantly, who does the new physician talk to about problems-both clinical and operational issues.

2. The business model that was assembled for the new physician for the first two years.

3. The practice’s revenue cycle. And any anticipated changes thereto because of market forces.

4. Reports the new physician will see that will track his practice performance.

5. His role in marketing his practice and the plan to do so.

7. Non reimbursable requirements, like committee memberships, meetings, marketing efforts, etc.

At the bare minimum, both parties need to be on the same page on these topics. Hiring practices need to understand that a new grad isn’t going to have perspective on many of these topics, at least not at first. But new grads learn quickly, and questions on all of these topics will be forthcoming. Better to get as much on the table at the outset as you can. A lot of practices budget for a consultant to come in and help a new hire navigate all of this.

Remember: When you hire a new doctor, you’re investing a lot more than money in them. Turnover is expensive and highly disruptive to a practice.

The new grad left the practice and for the past few years has been happily working for another group at another hospital. Not so for the group she left. They have hired and lost two surgeons, repeating the same mistakes.

As the availability of med school grads lessens, the recruiting process becomes extremely critical both as a key to attract new physicians and keep them in place.

Tom Ellis III, has been a healthcare consultant in the North Texas area for over twenty years, and has worked with a variety of clients, focusing on physicians. More information on Tom can be found at 

Don't leave your new hire in the dust and out of the loop. Here's how you can get them started.