As the ExtraMD, PookieMD has seen lots of practices. I have also been asked to evaluate failing practices to see where they got off track. There are some common themes amongst failing practices. For once, I will NOT carry on about reimbursement, but rather focus on where the physician owners of these failing practices went wrong. Here are my top ten reasons primary care practices fail:
- No budget. With out fail, every time I have asked failing practices about a budget, I get a vague answer, along the lines of, “Well, we look at the numbers.” NO! A budget is not something your book keeper or office manager creates, and then places on a dusty shelf! You need to look at it as a tool, and analyze where your practice’s money is going, where you want your practice to go, and why you are (or are not) getting there. You must analyze variances and figure out why they are occurring. When I say you, I mean YOU! Yes, you must understand this process to guide your practice/business!
- Serious lack of planning. We physicians are masters at trying to anticipate and forecast what happens with patients. This same skill MUST be applied to cash flow. You must forecast your cash flow so you can plan ahead. Good examples of bad planning: not anticipating paying your staff for holidays/vacations, not planning for the lost revenues while YOU are on vacation, not planning on HOW you will pay your new partner before s/he is generating enough to cover her salary.
- Huge empty offices. I worked at one office where one exam room was crammed with free give aways from drug reps. You couldn’t even use the room. Yup, pens, cute pedometers, plastic clip boards, heart shaped watches were stuffed into the exam room, rendering it unusable. Yikes! Who can afford that?
- Top heavy staff. If you are a small office, you really need to examine how much staff you have, and how much your really use and need.
- Buying sprees. Before you invest in what ever new gizmo you think will earn the big dollars, do a thorough market analysis and cash flow projection. (Worst example I’ve seen: a gazillion dollar laser that a practice bought but never used!) Don’t just believe what ever a vendor is telling you.
- Investing in an EMR and not using it. I have worked for 4 different practices that bought EMRs and were too busy to a) use them at all b) wrote notes and then typed them in later, c) persistently scanned notes in. I’m not kidding. If you are going to get an EMR, commit! Realize it will take oodles of time to make it useful, but for Pete’s sake, don’t buy it and have it sit there!
- Not putting in the hours. All of the practices I have been asked to review had physicians that felt like they were working quite hard, but were only putting in 6 hours a day. Many offices would open at 9:00 am, take a 1.5 hour lunch, and then the office would close at 4:30.
- This is not your father’s practice. Back in the day, the “GP” hung out his shingle, saw 10 patients a day, gave a shot of penicillin in the behind for everything and perscribed milk for ulcers. If you think the business of medicine is that simple you are in the wrong profession. Physicians must understand the complexities of today’s medical/legal/business world.
- Poor location/top heavy lease. It’s tantalyzing to have the medical office suite with the fancy furniture and custom wall hangings etc., but get real. See #1, BUDGET!
- No advisors. We physicians are smart, but not smart enough to know everything. The practices I have evaluated typically had physician owners that were trying to do everything themselves, with out utilizing advisor such as bookkeepers, accountants and business attorneys. You must know enough to understand your advisors, but you also need to trust them to guide you.
If you see your practice here, get busy making changes! Today’s climate is tough, so we need to get tough in how we run our practices businesses.