Using a Management Coach to Improve Medical Practice Performance

August 4, 2013
Gregory Mertz

Sometimes getting help from a management coach is what your practice needs to improve performance. Here's what coaches can do and how to choose the right one.

One of my roles as a consultant is to work with troubled medical practices. By troubled I mean losing money. These client practices vary in size from two physicians to nearly 600 physicians. They are private and hospital-owned; single and multi-specialty; with physician and lay management. The common element in all of them is the failure of leadership to change with market conditions. At one time they were viable and successful (well maybe not the hospital-owned practices). So what went wrong and how could the problems be avoided?

Typically at the end of one of these engagements the blame falls to management and, not infrequently, there is a change in leadership. In some of the cases this is appropriate and the past leader should never have been in that role in the first place. But in the majority of practices, the administrator/senior physician simply needed help in building their skill set as the management responsibilities became more complex. A growing number of my projects now include some form of "executive coaching" to teach leaders how to avoid future problems. This transfer of skills helps avoid the disruption resulting from sudden change in leadership, helps the practice avoid hiring yet another person that may not have the needed skills, and creates high morale as both physicians and staff realize the commitment of the physicians to their staff or colleagues.

Every practice can do better, so borrowing to meet payroll is not the only indicator that help is needed. Hospital-owned practices virtually always lose money but can do dramatically better if they are willing to make some tough decisions. Private practices may be generating sufficient income for the physicians to enjoy an acceptable income but an improvement of 10 percent to 20 percent to the bottom line would be welcomed.

So how do you select a coach and what can they do? First and most important: A coach needs to have significant experience in medical practice management. Hopefully in multiple types of practices so that they have a broad knowledge of what challenges you face. Have they coached anyone before? Do they do this for a living? Ask about the situations they have faced and the outcomes. Most importantly, is there a personal connection? If you like the coach as an individual you are more likely to listen to a difficult message. Regional accounting firms that provide consulting support for medical practices, local practice management consulting groups, and perhaps a law firm that has a number of physician group clients are excellent sources for coach recommendations.

What can you expect a coach to do?

Identify key data that should be monitored by both physicians and management. Very few "troubled" practices have a dashboard of key financial and operational metrics that are produced on at least a monthly basis and are used to spot trends or problems. Key metrics would be tied to staffing levels, accounts receivable, collection rates, income and expense per relative value unit (RVU), and visits. These data should be produced on both a practice (or specialty) basis as well as individual provider.

Help define the role of administration and physicians. While physicians may be highly skilled clinically, not all are experienced in organizational governance. The coach can help define areas of responsibility, help develop governance skills, and create a collaborative culture so the strengths of both physicians and management can benefit the organization.

Assist in setting goals. Management needs a clear set of goals and priorities so that they can support the wishes and needs of the member physicians. Getting these goals written is a first step in assuring that management efforts are in line with physician expectations.

Support the development of a productive environment. Coaches can help develop skills in both management and physicians to help build morale in practice staff, encourage staff growth from a skills perspective, create a culture of customer service so patients have a positive experience, and assure that troubled employees are either assisted to improve or removed from the staff.

Better understand business functions. Using budgets is an excellent first step in monitoring practice performance. Coaches can assist with this process, identify opportunities for improvement, and build knowledge and skills in practice leadership.

Engaging a coach should be viewed as a positive step toward improving practice performance. Neither physicians nor management should assume that the step was taken because of problems or poor performance. Coaches have the advantage of having worked in many environments, addressing challenges often more complex than facing your practice, and creating successful environments for other clients.

Typically, coaches return benefits that far exceed any cost. Our firm tracked the financial benefits of just our operational recommendations and found that, on average, clients experienced $12 in first-year benefits for every dollar spent on our fees. If you choose to explore adding a coach, ask about their experience in building the client’s bottom line. That might help make up your mind.