Top 8 tips to reboot your practice

With all the pressures facing independent practices-from adjusting to value-based payments to meeting the growing demands of patients-business innovators may provide some key practice management lessons.

Lance M. Black, MD, is a former family practitioner who now develops medical devices. He is medical affairs manager for the Global Center for Medical Innovation in Atlanta and is a chapter coordinator for the Society of Physician Entrepreneurs.

“It starts with our training. Physicians are trained to be very conservative,” Black explains. That can conflict with a business mentality, he says, even though private practice owners are, by definition, entrepreneurs.  “They’re not going to jump into an unproven treatment, while entrepreneurs are more willing to move fast and take chances.”

But can physicians learn some skills from the business world when it comes to running their practices? Can enthusiasm and an outsider’s view spark healthy innovation?

Black thinks so.  Dealing with practice unknowns-from changing payer mixes to new regulation and government incentives-is in the entrepreneur’s toolkit, he says.

And those skills can pay off in a medical practice’s financials.

“Entrepreneurs tend to have certain innate characteristics, like risk-taking, but there are some components that can be learned,” says Olubunmi Faleye, Ph.D., a Northeastern University finance professor.  Faleye was part of a team of researchers that published a study showing entrepreneurs’ effect on small-company boards of directors. Their presence led to higher stock prices, larger research and development budgets and improved revenue, the study found.

Leading and dealing with people are skills that can be honed, he says, and are valuable tools for medical practices.  And that counts not only in dealing with patients but potential referrals and business partners.

Business experts and physicians who have run their own practices identify eight core traits that are common to practices that excel:

1/ Retain passion

Physician-run practices reflect their founder’s mentality and typically are passionate about their patients, but physicians aren’t always natural business people. 

As a result, many of them are caught between doing what is in the best interest of  patients and financial necessity, says James Allen, MBA, a senior partner with Bain & Co. in London and author of “The Founder’s Mentality: How to Overcome the Predictable Crises of Growth.”

“All great companies start with a founder mentality and then over time, many lose that and die in complexity,” he says. They often struggle with how to professionalize their practice while still keeping their focus and sense of urgency.

2/ Adopt the sales gene

That struggle may be easing, some physician entrepreneurs say, as economic realities adjust attitudes about new revenue sources.

Amy Baxter, MD, chief executive of MMJ Labs, LLC, and a former pediatric emergency medicine physician, says she sees more physicians getting comfortable with selling products in their offices, for example. Baxter invented pain-relieving devices for pediatric and adult patients undergoing injections.

“One trend I’m seeing is physicians who didn’t want to be a part of anything to do with business, starting to realize there are value-adds for their patients by providing some things in the office that are useful,” Baxter says. “It’s been very common for endocrinologists to have glucometers and other things that help with diabetes management, but pediatricians? Almost never.”

Now, she says, that’s changing. “As other sources of revenue dried up, more doctors are feeling less uncomfortable about having products patients can buy.”

3/ They hire ‘owners’

Another key factor in making a practice more entrepreneurial is smart hiring decisions, Allen says.

“One of the major make-or-break moments for physician-run businesses is their choice of professionals,” he says. Managers who put profits ahead of patient care is a prescription for disaster, he says. In a turbulent industry such as healthcare, professionals have to respond quickly to change. If physicians have staffers who react with a bureaucratic attitude rather than with the mission of the practice in mind, it will result in bad decisions, he says.

“Founders don’t focus enough time on cultural fit and whether a person they are bringing in buys into the mission,” he says. 

Physicians need to hone job descriptions and then hire staff members who fit the description, rather than being dazzled by a well-known employer name on a  resume. Smaller, physician-driven practices, for example, need to look for candidates who have excelled in that environment. And be prepared to pay for the right expertise, he says.

4/ Check egos

A little humility goes a long way in keeping physicians open to new ideas and potential sources of revenue, Allen says.

“Many physicians were trained in hierarchical structures and are used to privilege and recognition,” none of which fosters the kind of collaborative culture that leads to really great entrepreneurial practice ideas, he says. Physicians who are labeled by colleagues, hospitals or payers as hard to work with tend to also be those who find it most difficult to adapt and thrive, he says.

5/ Balance stars and systems

Growing practices typically face the need to do more compliance, and can often be caught flat-footed when they neglect it, Allen says. He recalls the case of a physician who failed a payer’s audit because the practice wasn’t increasing its security measures as more staff members were given access to medications.

How to keep new controls from sucking the urgency and passion out of a practice? 

One way is to make employee motivation a key goal. “Compliance systems can end up taking over the original culture and you lose the original, insurgent mission,” he says. “Everybody becomes a slave to the system and you start to de-motivate the best doctors.”

Try promoting an outstanding young partner or staff member to a level that is two pay or performance grades higher, he suggests, rather than adhering strictly to performance plans. And ask yourself whether you’ve become a slave to the status quo. Are you clinging to a relative-value unit (RVU) model instead of performance pay, for example, when you initially disliked the RVU model?

The attitude that change must be resisted is an innovation killer, Allen says. “Becoming the enemy of change and trying to fight all of it is never good. New regulations can be bureaucratic and stupid, but some of them are actually good for patients and if you don’t change, you’ll be disrupted,” he says.

6/ Build a learning
environment

Creating a practice culture where learning from mistakes is valued is another crucial step in energizing a practice.

Nodding to Syed’s work on industries that learn from failure, Allen encourages practitioners to develop cultures where employees communicate more regularly and effectively about what isn’t working in patient management, documentation and practice financials.

7/ Do more with less

Another skill physicians can learn from their entrepreneurial counterparts is doing more with fewer resources.

Felmont (Monte) Eaves, MD, FACS, a plastic surgeon and medical director at Emory Aesthetic Center in Atlanta, Georgia, has developed several devices in entrepreneurial ventures over the course of his career, a passion that came from growing up watching his father, an engineer, build products.  

“There are lots of lessons you carry back and forth” between the practice and the startup venture, he says. “A big one is resource management. There’s only so much money, people and time, so startups are always trying to be as cost effective as they can.” Even in well-established practices, it’s irresponsible to overspend, so forcing
critical thinking about priorities is essential, he says.

8/ Join in

Participating in and leading industry associations helped to inject life into both sides of Eaves’ career. “I think far and away the thing I did that meant more to me in terms of managing a practice and a startup was being involved” in those organizations, he says. “I had to build consensus among volunteer groups of people, articulate vision and get other people’s buy-in.

“You build relationships that are long-lasting and lead to all kinds of new ventures,” he adds. “Today I’m working on new device ventures with people I worked with 20 years ago in those associations. It’s a community.