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Twenty-five hallmarks to evaluate practice success
A simple self-test can show how you and your staff are doing at managing the business side of your profession.
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“I am always doing that which I cannot do, in order that I may learn how to do it.”
– Pablo Picasso
Picasso was obviously on to something. Keep trying and trying. Although estimates vary, it is believed that he produced more than 50,000 discrete works of art, including paintings, sculptures, ceramics and prints. And that is before counting his less well-known poetry and plays.
But you do Picasso one better. In your own career as an eye surgeon, you will probably knock out about 180,000 works of art, including all patient encounters and surgical cases.
And then there is that piece of art (some would use other words) called your “professional practice.” It, too, for all its lumps and warts, is your personal creation. It deserves efforts at constant improvement and attempts to do that, which is difficult.
To find out how well you and your staff are doing at managing the business side of your profession, I created a simple self-test. Below you will find 25 key hallmarks of practice success. There could as easily be 50 or 100, but after more than 35 years of fieldwork, I think that these 25 are the most important.
Read through each one, and then score your practice — and your board and management team — on the following scale:
4: We have nailed it. We do this and do it well.
3: We do this but could probably make improvements.
2: We do this on and off but not well or consistently.
1: We have done this in the past but not for some time.
0: We have never done this.
When you are done, go back and add up your score. The maximum score is 100 points. Use the overall score, as well as your lowest-scored items, as the jumping off point for an internal discussion about needed improvements.
Hallmarks
1. A written strategic plan: Completely describes, with appropriate time horizons, the mission and values, the intended service area, growth rate, service and provider mix, positioning strategy and alignment with other market participants; used as an active document, it provides the context for tactical priorities.
2. Written tactical priorities: Driven by the strategic plan and limited at any one time to a realistically accomplishable list of near-term actions and objectives.
3. Administrator/executive director/CEO: Appropriate experience, skill and time commitment; competencies aligned with the practice’s current needs. The appropriate mix of leadership/executive vs. management/operations talent for the scale of the practice. An appropriate balance between “hard” skills (finance, accounting, regulatory, product knowledge) and “soft” skills (HR, communication, conflict resolution, marketing); rewards are proportionate to performance and aligned with the owners.
4. Managing partner: An inspirational group leader who is selected based on the current needs of the practice, the candidate’s skill and the candidate’s desire to lead. A 2+ year tenure with no term limits; a modest honorarium.
5. Accountable communication: Open issues and conflicts between people are addressed early and fearlessly.
6. A management committee (the managing partner, administrator, site managers, chief financial officer, department heads, etc.): Meeting every 2 weeks using accountability documents allowing each committee member and the board to see the status of all open projects.
7. Other meetings: Appropriate frequency, duration and content.
- All hands (monthly to annual, depending on scale)
- Departments (monthly)
- Providers (monthly)
- Committees/task forces (as needed)
8. An “action grid” or similar project accountability tool: Shows item, owner, deadline and dated progress notes; updated biweekly and used as the core agenda for the management committee.
9. Written operational guidelines for all practice areas. These standard operating procedures are updated regularly and memorialize the “one, agreed, best” way to do everything in the practice. They force service consistency, formalize training and advance the continuous quality improvement mission.
10. Quality assurance/performance improvement: A standing committee that examines outcomes, utilization, facilities and the customer experience; focuses its attention on a current scope of work.
11. Root cause analysis: The managers and board do not look at just surface symptoms but for the “problem behind the problem” to revise the root causes of performance gaps.
12. Profit margin sufficiency: Practices with higher percentile profit margins (eg, above 40%) have the resources to seize opportunities, react to challenges and weather fee cuts.
13. Income vigilance: Continuous, formal scanning for missed opportunities to reduce or share costs, boost incremental revenue and add new ancillary services.
14. Capital access: Keeping not less than 3 months of cash and equivalents (lines of credit, personal funds, etc.) at the ready as a business “shock absorber” for third-party payment delays, transient doctor disabilities, etc.
15. Risk management vigilance: Scanning the environment for potential threats and lining up mitigation resources before they are needed (compliance audits, insurance products, etc.).
16. Financial and volumetric data analysis: Both traditional financial statements and practice management system reports, plus derivative graphical aids, are used to spot adverse trends early.
17. Benchmarks: Pushed down the chain of command, memorized, tracked at appropriate intervals; positive values are used to reassure the board about the company’s favorable performance; any adverse values are a trigger for timely response.
18. Revenue cycle management: Assuring that we are getting paid fully and in a timely manner for the work we do; billing department work is done competently and efficiently.
19. Sufficient practice facilities: Practice development is not choked off by a lack of space, equipment, technology.
20. Mid-level manager development: Ongoing effective efforts, with sufficient formality and time commitment, to help department managers, at every career stage, advance their skills.
21. A marketing mindset: Staff at all levels are conscious of the desired growth rate and the practice’s mission to preserve or increase its market share; includes a continuous focus on customer service, continuity of care, referral outreach and an appropriate array of direct-to-consumer efforts.
22. A career coaching mentality: An approach in managing both providers and support staff cohorts that focuses on individual development.
23. The use of external expertise: Drawing on outside subject matter experts (peer practices, professional advisers, readings, CE meetings, etc.) to find and solve problems and stay current.
24. Passive income development: Through the development of ASCs, optical, employee providers, etc.
25. Intentionality: Rather than drifting from one random expedient to the next, the practice intentionally pursues a logical, linear progression of opportunities.