The Great Practice Makeover: Management Disconnect

February 1, 2007
Pamela Moore, PhD

This Denver physician has a unique business model but familiar problems.


Katherine Harmer’s business model is unique, but her problems are sadly familiar.

Catalyzed by the death of her father, Harmer, a former software executive, wanted to see healthcare work differently.

Being a “do-it-yourself” sort, she promptly wrote a business plan for a concierge practice in Denver that she named Higher Care, found financing, recruited her first physician to act as her business partner, built out luxury digs, and set out to show the world that it could be done.

Three years later, she is on her third nurse and looking for another replacement. Personnel issues consume her thoughts. New economics didn’t change human nature.

Culture shock

When Harmer first started talking to practice administrators and learning more about the business side of medicine, she thought she could avoid some of the more common mistakes. Coming from another industry, she saw medicine as hopelessly mired in an outdated model.

“It was incomprehensible to me - the attitudes, the processes,” says Harmer. “It’s bureaucracy at its worst. It’s infighting. I’ve never run into so many unprofessional people in my life. I got so tired of saying, ‘You’ve got to be kidding me.’”

Harmer takes a more streamlined approach. For one thing, she is an owner of her practice, not “just” the manager. That’s unusual for a nonphysician. The business is licensed as an LLC, and Harmer is president. She is a businessperson’s businessperson, all facts and firm handshakes. It’s hard to imagine her among other small-practice managers - say, the spouse of a partnered physician or a biller who worked her way up. But it’s equally hard to imagine her mixing with the softhearted, clinically minded internal medicine and family practice physicians. Harmer stands out. That can be a great asset in a culture that can be too accepting of business mediocrity.

But it can also be problematic. It’s like inviting Donald Trump to run Ben & Jerry’s. There are bound to be cultural disconnects.

A fish out of water

If Harmer stands out, so does her business plan. Patients at Higher Care pay an annual fee - $3,000, according to its Web site, although there is a 50 percent discount for cash-pay patients, and Harmer will make other deals with patients who can’t pay her fee. What does $3,000 buy at Higher Care? It gives patients 24-hour access to their physicians, luxuriously long appointments, help scheduling appointments with specialists, and a host of other services that go beyond what managed-care plans typically cover.

The practice still bills payers for the covered services it provides. It’s a two-pronged revenue stream: The annual fee and allowables enable Harmer to offer enhanced patient care.

But currently only one full-time family practice physician works for Harmer, and she’s a recent hire. The internal medicine physician who joined Harmer when she started her business is out on medical leave. Harmer would like to recruit a third physician, but she’s found that not all doctors “get” the concierge model, and few are willing to commit to added hours to treat Harmer’s demanding, 24-hour-access patient base.

Harmer outsources the practice’s billing, so her staffing needs are small. There is one gracious receptionist who sits at a real desk rather than behind a high counter or in a Plexiglas-protected box. The receptionist personally greets patients when they arrive, asks if they’d like something to drink, and whisks them into a luxuriously appointed waiting area complete with upholstered chairs, a flat-screen TV showing nature scenes, and a telephone. The receptionist did not have a medical background when Harmer hired her. But with a college-degree-polished persona and a few pointers, she has proved herself to be exactly what this high-service practice needs. Harmer says she was lucky to find her.

Who’s the boss?


The only other staff position in the office is the registered nurse. And that’s where Harmer’s troubles lie.

According to Harmer, “Compassion seems to be the opposite of accountability. I’m having a hard time finding a non-dramatic, professional RN who feels like this is their practice as well.” She feels her previous hires lacked initiative. “They take direction and that’s it.”

For example, Harmer would like the nurse to look into providing more patient education, but she wants the nurse to define and set up a program to make it happen. In her interviews, she asks potential hires how they would proceed if asked to plan an open-house party to market the practice to new patients. Most applicants simply reply that it’s not something they’ve ever done. Period. They don’t even try to offer an answer calling on experience planning their own parties or events.

Paradoxically, Harmer says these non-starters don’t want to be managed. She says the nurses she’s hired haven’t appreciated criticism from someone without clinical experience. Her relationships with nurses usually end in an ugly scene complete with threats of litigation, she reports.

A new management style

Higher Care certainly isn’t the only practice in the world with staffing headaches, but going through three nurses in three years does signal a real problem. Of course, it’s worth noting that many managers would have let a bad relationship linger much longer than Harmer. Unlike most, she doesn’t have a problem saying goodbye.

Still, it would be nice to have clinical staff stick around.

To make it happen, Harmer must change her approach.

First, she needs to write a detailed job description and expect to do more work herself setting up the systems she desires. If she wants patient education, she should clarify, in writing and at job interviews, what that would look like to her. All aspects of the job should be established at the beginning to avoid later confusion.

That’s good management. “You can’t just put staff out there without a lifeboat and expect them to swim,” says staffing guru and consultant Judy Capko. “You need to set responsibilities and expectations.”

Harmer may be used to go-getters. She is one. But most nurses, while driven, smart, and crucial, are not usually asked to develop new programs from scratch. In fact, in many settings, a nurse’s success is measured by the ability to accurately take orders from a physician and not deviate from those orders.

While Harmer doesn’t think her own lack of medical training is at fault, her previous nurses disagree. Nurses generally tend to pair with a practice’s physician and disdain suited executives. Whether you agree with their assessment of you or not, it’s only sensible to acknowledge what your employees perceive as your weaknesses. The point is to determine which approach has the greatest effect with different types of professionals.

When interviewing and discussing issues with staff, Harmer could say, “You are the expert here clinically. My interest is in making this business work. Let’s work together to find solutions that make us both happy.” Or, “I don’t know why we couldn’t do things this way, clinically speaking. Will you please tell me all about it? Then we can find a solution that works.”

Taking steps to reduce the resentment that inevitably grows between Harmer and her nurses makes good business sense. Says Capko, “If you haven’t walked a mile in their shoes, what gives you the right to criticize? It can sound really pompous even if you are right.” This is simple human nature; not a case of who’s “right” and who’s “wrong.”

Another option: Harmer could have her nurse report directly to one of the physicians while she retains ultimate decision-making authority. That would allow her to focus on her strong suits, thwart complaints that she doesn’t understand the clinical world, and force the physician to take an active role in management. Of course, this assumes the physician is at least as good a manager as is Harmer.

Re-evaluate staffing needs

Higher Care should also take a look at the clinical staff it really requires. Right now, Harmer calls on her RNs to do patient intake, blood draws, injections, and some basic testing. For example, the practice offers exercise testing and spirometry. During the remainder of the full-time work week, the nurse processes paperwork such as pre-authorizations and schedules appointments with specialists. While an RN could readily handle much more challenging tasks, in a concierge practice, patients explicitly pay for extended, personal time with a physician.

In other words, they don’t want to see the nurse. The practice is paying top dollar to employ RNs but then not taking advantage of their skills. Harmer says she thought an RN would be more professional than a medical assistant (MA), but since none of the RNs she’s hired are sticking around, and she’s not satisfied with their professionalism, it’s a moot point.

The practice might fare better with a well-trained MA or licensed practical nurse (LPN). An MA or LPN would cost less and would most likely be more willing to take direction.

This is something many practices should consider. Some practices truly need the high-level skills only an RN can provide, but many hire RNs only to add prestige to their practice. That inevitably leads to high overhead costs and low morale among under-challenged nurses, says consultant and practice manager Nick Fabrizio.

“One of the best decisions I made was to get rid of our RNs,” Fabrizio says. “They are too specialized, want too much money, and most medical groups cannot afford them. Show me an office with mostly RNs, and I will show you an office with some overhead problems. RNs should be doing highly skilled activities as well. Patient education is not one that I would recommend, since most LPNs and MAs can do just as good a job with some training.”

Regardless of the credentials of the person Harmer decides to hire, she should also strive to find someone with the right “cultural fit” to be happy in her practice. She needs someone who can handle her relatively aggressive and patient-centered needs.

For Harmer’s needs, job seekers with résumés highlighting premedical experience in retail or the service industries would likely make good candidates. Fresh graduates willing to be trained are worth a look too, as long as the physicians consent to do a little hand-holding when clinical questions arise.

The interview process will be crucial to finding an employee who is the right fit for this position. Harmer may want to try asking candidates how they would handle actual situations that frustrated her with previous staff.

The physicians may decide they can do without any clinical support staff. In this case, they’d handle their own intake and testing. That’s terrible advice for physicians in a traditional practice. Those doctors can see more patients if they leave intake to administrative staff and concentrate on clinical care.

But the concierge model isn’t a volume business; its success depends upon spending quality time with patients. By doing their own administrative work, Harmer’s physicians could devote more time to patients without extending the total appointment time. For example, they could initiate a conversation about nutrition while taking weight, catch up on a patient’s summer vacation plans while drawing blood, or talk about smoking cessation while the patient is on the treadmill. This approach might work especially well right now, since the physicians’ patient panels are not full. They have extra time to spend on the patients they have.

Like most executives with staff problems, Harmer is clearly distracted by her trouble handling clinical support staff. Getting this issue under control or at least taking some new action will free her up to focus again on the bigger picture of growing her practice.

Pamela L. Moore, PhD, is senior editor, practice management, for Physicians Practice. She can be reached at pmoore@physicianspractice.com.
This article originally appeared in the February 2007 issue of
Physicians Practice.