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Laurie Morgan, MBA is a partner and senior consultant for Capko & Morgan. Her consulting focuses on practice management effectiveness and practice profitability. She is the author of the book People, Technology, Profit: Practical Ideas for a Happier, Healthier Practice Business
Avoid a misfire when bringing on a new practice manager. Here are some ways to evaluate them and make sure they are making the right moves.
A few years ago, we worked with a practice that had finally filled its administrator vacancy after a lengthy search. Understandably, the owner was eager to get this new manager right to work on the practice's most pressing management issues, which in his view meant reining in expenses. In particular, the physician-owner urged the administrator to focus on minimizing overtime and other employee expenses - and he made clear that her bonus would depend mainly on cutting these costs.
Unfortunately, the administrator took these marching orders straight to heart. I say "unfortunately" because problems could have been avoided if the administrator had taken the time to understand what had driven those costs up in the first place before acting. Instead, eager to impress her new boss, the administrator put an immediate moratorium on overtime unless pre-approved. She also discovered that some employee benefits were not promised in the employee handbook - and decided that meant she could eliminate them.
The benefits that were cut had been promised and used by most of the employees for many years. Leaving them out of the handbook had simply been an oversight. But because the physician had made clear that cutting unnecessary costs was the only thing he valued in the administrator's performance, she seized the opportunity to eliminate a large expense. Not surprisingly, the employees were very upset.
The overtime ban was even more problematic. It turned out that short-staffing in the clinic and the billing office - not abuse - were causing the overtime. So when the manager insisted that employees never work late, billing fell behind - and pressure on the team mounted. In the clinic, conflicts began to dominate an already stressful environment. The physician found himself burdened with disputes about schedules, complaints from long-time employees about the changes, and even negative feedback from patients who had been hastily rebooked. It wasn't long before revenue was affected, since collections deteriorated and late appointments were avoided to ensure everyone left on time.
The story illustrates how directly goals can drive manager behavior and why it's so important to think through what you're really aiming for when setting them. The practice could have avoided this upheaval and, channeled in a better direction, the administrator's extensive knowledge and drive would have been assets to the practice from the start.
Here are a few tips to help you set goals to help you evaluate your administrator - to avoid misfires and get more of what your practice really needs from this critical role.
Think holistically. Practice workflows have many interconnected parts. It's easy to mistakenly assume that a problem found in one area is also caused in that area. For example, collection problems could be due to biller errors, but they also could be due to improper data entry during scheduling. In our employee expense example, the practice owner assumed that overtime costs were unnecessary and avoidable, without analyzing what was actually driving them - thus, cutting those costs created more problems than it solved.
A good manager who understands how all the pieces of practice administration interrelate can help you avoid such a costly mistake, provided you set goals that encourage a detailed and holistic approach. For example, in this case, the owner could have set a broader goal of improving profitability - then tasked the manager with figuring out the right way to do it. He could have first asked her to analyze the practice's expenses against benchmarks before making any cuts.
Measure what you can measure. There's an old management saying that "what gets measured gets managed" - meaning that quantifying helps focus management attention. A clear, measurable goal was one reason the new manager in our story acted so aggressively.
Well-chosen quantitative objectives are very useful to encourage focus and help you evaluate performance fairly. But remember that some important responsibilities are hard to measure - like staff morale. When considering the goals you'll evaluate your administrator on, include all the responsibilities that matter, even those you'll need to assess more qualitatively. Give some creative thought to goals that may not seem measurable at first. For example, turnover data or an employee survey can help quantify staff morale.
Make evaluating a two-way street. An ambitious administrator will have many ideas for improving your practice - so don't hesitate to seek their input in creating both short- and long-term goals for their own performance and your business's. A review conversation that emphasizes teamwork, rather than top-down evaluation, will help you and your administrator create shared goals and expectations to drive your business forward.
Include skills development. Continuously improving practice management knowledge and skills is enormously important in the changing healthcare environment. Make sure you're encouraging your manager or administrator to hone their skills through a variety of platforms, and include continuing education in your evaluation of their performance.