American College of Physicians: Internal Medicine — Doctors for Adults ®

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Rightsizing, not downsizing, is key to staffing success

From the May ACP-ASIM Observer, copyright 2002 by the American College of Physicians-American Society of Internal Medicine.

By Phyllis Maguire

Staff and benchmarking resources

PHILADELPHIA—Want to improve your practice's bottom line? Chances are you're thinking of cutting staff. But experts warn that while thinning your ranks will produce immediate savings, it may actually hurt your profitability in the long run.

At a two-day conference held by the Medical Group Management Association (MGMA), experts warned that severe staff cuts can disrupt patient flow and scheduling, sending revenues into a tailspin. At the same time, projects that could build revenue will fall through the cracks and staff morale will plummet.

rightsizing Sara Larch, chief operating officer of University Physicians Inc., the University of Maryland School of Medicine's faculty practice in Baltimore, said that before slashing staff positions, physicians should take a hard look at how they staff their practice. Strategies that "rightsize"—not necessarily downsize—staff can lead to better efficiency and staff retention, as well as bigger profits.

"Are the right staff doing the right things?" asked Ms. Larch, chair of MGMA's board. "Do they exhibit the right behavior, and are they receiving the right rewards?"

Here are some tips she offered to help "rightsize" your staff:

  • Benchmark staffing levels. To get a handle on your practice's staffing levels, Ms. Larch suggested counting hours, not bodies. Add your staff's weekly hours, including their typical overtime, and divide by 40 to calculate the number of full-time staff members you employ per week. (Remember to include all your support staff, such as radiology technologists and lab assistants.)

    Divide that figure by the number of full-time physicians to calculate the number of staff you employ per physician. Be sure to include midlevel providers in that physician denominator if they bring in revenue. If they do not, add their weekly time to total staff hours.

    Compare your practice's staffing ratios to other practices in the country, including those considered to be "best performers." (See "Staff and benchmarking resources.") Ms. Larch said that the best-performing medical practices tend to have higher staff-to-physician ratios and typically spend more on support staff. Staff costs are a smaller percentage of total revenues, however, because the practices bring in more income.

  • Track productivity. Keep a tab on staff for a few days to see how many tasks they perform, then compare those figures to other practice norms. Instead of using comparisons as a hatchet to cut positions, however, use the data to build practice snapshots that can help you spot problems.

    Ms. Larch presented productivity benchmarks that practice management colleagues have gathered from groups around the country. According to those benchmarks, for example, schedulers should be able to schedule 180 to 200 patient appointments a day (as long as they don't have to register patients), while check-out personnel should be able to schedule return appointments and handle charge entry for 70 to 90 patients a day.

    If your practice's productivity seems low, try to find out why. Perhaps a new staff member needs more training, your computer system is not working properly or your payers' explanations of benefits are particularly indecipherable.

    Or you might find that staff members are being pulled away to do other tasks, like a billing team that sits right behind the front desk and ends up working the front end. "The solution there might be to give them their own office and hire more receptionists," Ms. Larch said.

  • Look for signs of "wrongsizing." If you have too few staff members, Ms. Larch said, you are probably paying a lot of overtime, which hurts profits and burns out staff.

    Another classic sign of trouble: Staff can't stay ahead of the flow of patients and claims. As a result, they don't pull charts or verify insurance until patients are standing at the front desk, while your accounts receivables are six months old.

    Even practices that have enough staff can often do a better job with staff scheduling. Do you never have enough receptionists or schedulers during peak times like Monday morning, but find staff standing around for most of Friday afternoon? In that case, adjust staff schedules to better match patient demand or hire part-timers to get the coverage you need.

  • Simplify your workflow. Staffing needs are influenced by how complex you make your office procedures. Do you insist, for instance, that schedulers check with physicians before they add new appointments to the ones already made for the day—even when your doctors invariably OK add-ons or walk-ins?

    "Instead of making staff stop what they're doing to track down doctors, develop protocols that schedulers can use for double bookings and add-ons," Ms. Larch explained. Create a flow chart for each staff position or department and diagram the steps needed to accomplish daily tasks. Identify steps that create barriers or do not add value, and look for shortcuts or simplifications.

  • Value experienced employees. If your most experienced staffers spend their days filing or running a copier, you're not taking advantage of their expertise.

    Ms. Larch pointed out that in large practices with medical assistants, doctors wouldn't use registered nurses to restock exam rooms and greet patients. But they often fail to apply those same principles to administrative staff.

    For example, hiring an entry-level or part-time billing person to push your claims out the door might free up a more experienced person to track down payment delays or denials. Or you could give your experienced biller even more autonomy and have her analyze the source of persistent collection problems and devise strategies to fix them.

    "We never want to pay another salary, but I think the bang for the buck can be huge," Ms. Larch said. "Your experienced person can be more productive-and you may be training his or her replacement at the same time."

  • Consider part-timers. Try tapping into the sizeable part-time labor force of retirees, former employees looking for a second job and stay-at-home moms who want to work only a few hours a week.

    While you should always hire part-time employees to help get you through rough patches (when you open a new office or install a new computer system, for example), you should also consider them for other efforts that can enhance revenue.

    Full-time employees may balk at working the front desk on Saturday morning if you want to extend your hours, for instance. That position might be perfect for someone who wants to work part time.

  • Educate your staff. While traditional conferences and seminars are one way to give employees new skills and knowledge, Ms. Larch urged groups to look for educational opportunities closer to home.

    "Anyone who has worked at your firm for four years is an expert," said Ms. Larch. "Have them sit and talk about what they know to other staff members over lunch or a snack." Or swap a lunch presentation with another practice in town to let your staff hear from their practice manager.

    You can also make learning a group effort. Divide the journals and publications you get at the office among staff members. Ask them to highlight information that pertains to your practice and present it at staff meetings.

  • Don't reward the wrong people. Don't reward poor performance by continuing to shell out overtime to an employee who works too slowly, Ms. Larch said.

    And don't pile bad consequences on good performers. Some practices routinely let less efficient staff leave early to pick up children from school, but don't extend that same flexibility to office stars whom they depend on. Or groups keep piling projects on high achievers, making them work much more than less productive colleagues.

    A skewed reward system can cost you good employees, especially if bigger workloads don't come with more benefits.

  • Offer incentives. Employees—just like the physicians they work for—are more motivated when they have a stake in financial results. Ms. Larch, who said her own practice has had an incentive plan in place for a year, explained that groups can offer individual or team incentives. She recommended using a combination of both.

    In the multispecialty academic practice where she works, for instance, employees get an incentive that can add up to an additional 10% of their base pay as a bonus. Of that 10%, 60% is pegged to individual performance; 30% is related to their particular specialty's goals, such as collections rate, accounts receivable or charge entry timeliness; and 10% is tied to the entire practice's performance.

    When implementing incentives, Ms. Larch warned, be specific about what you ask for. A goal of improving your net collection rate by 2%, for example, can be easily achieved if employees decide to just write off some accounts receivable. Make it clear that the only kind of improved collections you're interested in is more revenue.

    And, Ms. Larch said, don't make the mistake of trying to keep your incentive plan a secret. "Nothing is secret in a medical practice, particularly when it comes to salaries and incentives," she said. "Keep any kind of incentive plan out in the open, and implement it across your entire practice."

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Staff and benchmarking resources

  • The Medical Group Management Association sells several books and survey findings with benchmarking data on physician practices. Titles include "Rightsizing: Appropriate Staffing for Medical Practices," "Benchmarking for Performance: Moving Toward Best Practice in Primary Care," "Cost Survey: 2001 Report Based on 2000 Data" and "Performance and Practices of Successful Medical Groups: 2000 Report Based on 1999 Data." Visit the store section of www.mgma.com for prices and ordering information.

  • Physicians Practice Inc., a publishing and consulting firm, posts on its Web site practice performance benchmarks for different staff positions.

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