Create a Cohesive Medical Practice Team

By all accounts, 2014 will be a watershed year for physicians and their practices. To name only two mandated initiatives: insurance plans purchased through the new healthcare exchanges became effective Jan. 1 and the beginning attestation for the Stage 2 rules of meaningful use rolls out. Practices have been assaulted on all sides by competing demands. Yet, after careful planning to survive bleak forecasts of reduced payer reimbursements and lower patient demand for care due to cost concerns, practices find themselves in a holding pattern when it comes to hiring and providing for their staff.

"I think [practices] are just trying to hold on, I think they are just trying to hang on," says Mary Pat Whaley, cofounder and president of Manage My Practice, a consulting firm based in Durham, N.C. Whaley feels that the pressure to freeze staff wages is easing slightly, but in general, she sees limited salary increases at practices. "At this point, I would say most practices are giving small increases to try to keep their employees solid with the fluctuations in the price of gas, the price of food … the money [for larger raises] is just not there," she notes.

According to the results of Physicians Practice's 2014 Staff Salary Survey, 42 percent of medical practices say they employ the same number of staff they did two years ago. Thirty-three percent of respondents have added staff over the same period. We surveyed close to 1,400 physicians and practice administrators across the country. The typical respondent was an independent practice with one to five physicians. Close to 50 percent said they employed between one and five nonphysician providers and administrative staff. The overwhelming majority, 83 percent, said they practiced in a traditional fee-for-service environment. And, fully three-quarters of all respondents expressed an inability to give significant raises to their staff, citing decreasing reimbursements (58 percent), practice expenses (16 percent), and the national economic climate (13 percent).

So, if there is limited money for giving raises, how will practices incent their staff to work harder and make a personal investment in their jobs? We asked our experts for tips and strategies that practices could use to maximize the staff they already have. Here's what they said.

*According to our 2014 Staff Salary Survey, most medical practices are holding firm on staff compensation. Here's what practices across the country are paying.

Full or part time?

Family physician Deborah Winiger practices at North Suburban Family Healthcare in Vernon Hills, Ill.  She started out 17 years ago in a group practice, and has been in solo practice for the last 14 years. When she lost an associate three years ago, she brought on a nurse practitioner. Her staff is an amalgam of hours and positions, but it works for her and her employees. Together, two part-time nurses make up one full-time-equivalent position: a RN and a licensed practical nurse. The same applies to her front-desk position; two receptionists share one job. Even her mother helps out on a part-time basis.

Winiger says she didn't start out with the intent to hire only part-time employees. Rather, her staffing model grew up over time; from staff preferences and through necessity. "I mean it's just a cost benefit to me to not have full-time staff," says Winiger.  "I have to say, I do offer some benefits to my people because they've been there [for a long time]." And, she has also given raises to her staff. "I'm probably the outlier in that my staff has gotten [salary increases] every year they've worked for me, except for one [year]." She says the raises are minimal, but she also provides bonuses at the end of the year. In this aspect, Winiger aligns with our Staff Salary Survey respondents, 71 percent of whom say they have no plans to give raises beyond cost of living increases.

Of course this type of homegrown staffing model that relies heavily on job sharing does not work for every practice. Renee Killian, business manager for Great Lakes Orthopaedics Center, a large group practice in Traverse City, Mich., that employs almost 90 people, says that while her practice has no official policy on hiring part timers, such an arrangement would make it difficult to staff efficiently. "With our practice, we are so big, and there is so much information you have to know with every physician … trying to keep that stuff organized, staff educated and up to date, it'd be very difficult to have part-time staff in here," says Killian.

That sentiment is echoed by practice-management consultant Laurie Morgan, partner at Capko & Morgan, a consulting firm based in San Francisco. "I think in a lot of practices, for example, medical assistants may be assigned to particular providers, and so the idea of sharing a job is kind of inconvenient for the provider," she says.

However, that doesn't mean your practice can't think creatively. For example, new models of care like Patient-Centered Medical Homes require practices to assume more reporting responsibilities as part of population health management. That may mean already over-burdened staff members must take on one more role. Instead, why not think outside the box? Whaley says that she is seeing more practices allow staff members to work from home for part of their week. Some practices are even hiring for positions that are entirely home-based; such as eligibility and benefits verification, pre-authorizations, and billing. "I think physician practices are coming to realize that not everybody has to be in the practice every day," she says.

Rewarding effort and dedication

While most staff members well-understand the economic challenges that prevent them from receiving raises, it is imperative that physicians and practice administrators find other ways to invest in their staff. Not only does it send a positive message to staff letting them know they are valued members of the team, it also prevents economic damage through turnover.

According to Glenn Morley, a Chicago-based practice consultant with Karen Zupko & Associates, there is a direct correlation between staff retention and a practice's financial success. "If you look at retention … turnover costs a practice somewhere between 17 percent to 21 percent nationally, based on that employee's compensation. So … if you are churning through employees like a puppy mill, then you're never going to recover," Morley says.

She adds that communicating with staff is vital, especially if you plan to ask them to take on more responsibilities. She advises that managers tell their staff "the story, the 'why' behind these new tasks." Otherwise, staff may jump ship and look for a new employer. "We are already seeing [staff attrition]. It's really tough. It's not that [staff members] are saying 'Oh, I'm not going to work anymore,' they're saying, 'I'm not going to work in this capacity anymore. I'm going to do something different.'"

So how can a well-meaning office manager reward her staff for stellar performance on a shoestring? Our experts tell us there are myriad ways to share the love. Some strategies to consider:

• Adequate orientation. A common mistake in practices is to throw a new employee into the "water" and hope he swims. Not only does that waste valuable time, it also engenders frustration. Morley advises, "No matter how great a person is, when they are presented with a new job, it feels really uncomfortable." She says that just sitting down with the employee and talking about how they can become successful in a new job is a huge relief for them.

• Continuing education. Why not send a dedicated staffer for training on key tasks? Killian says that she is sending one of her billers to become certified with ICD-10. Killian is a real advocate for ongoing education: "You can't expect people to keep up with the times if you don't educate them. It's always such a clinical focus, but if we don't educate our nonclinical staff, it's going to come around and bite us."

• Succession planning. Most people would think "physician" when they hear about succession planning, but Morgan says it also applies to practice administrators. She says that not very many practices think about future scenarios, but if they do, that also becomes an opportunity to develop junior staff. "You may identify that person who has an interest in learning more about billing, and then potentially, maybe, becoming the billing manager." She says that by defining career paths, managers can let their staff know there is room to grow in the practice.

• Giving on-the-spot kudos. It really is all about appreciation. That is something Killian knows first-hand; not only has she worked in many practice positions, she has also owned a small consulting business. "I'm not a supervisor that stays in the office. I am actually on the floor with my staff, multiple times through the day, just checking in." Killian favors one-on-one time with staff members, asking them about their daily frustrations and handing out compliments. She also writes thank-you notes for staff, and puts out a quarterly newsletter for the physicians that often celebrates staff achievements.

• Tying compensation to performance goals. Most experts advise against handing out yearly bonuses just to spread good cheer. Don't forget, your practice is a business; if it flourishes, so will your staff. Urogynecologist Robert Harris, whose group practice Southeast Urogynecology is based in Jackson, Miss., awards quarterly bonuses that are tied to practice metrics ― for example, billers who directly influence cash flow for the practice. He explains, "[Billing staff] get bonuses [based] on the [accounts receivable] A/R days ― the amount of A/R that is less than 120 [days]. … If they meet certain specified criteria, then they get bonuses; which is usually based on a percentage of salary."  Harris notes that billers are "really digging" at the end of the month, to collect everything that is due the practice.

Make the most of nonphysician providers

While most respondents to our survey say they have given minimal raises to their staff, the one bright spot appears to be nonphysician providers. Roughly one-fifth of respondents say they have added an NP or a PA to their practice in the past year. And when comparing average salary increases across all years of experience, our survey tells us that PAs received a 3.6 percent increase in annual salary in 2013, while NPs received a 6.4 percent increase. Notably, while nurse managers did well, receiving a 4.4 percent increase in annual salary over the same period, RNs took a hit, experiencing a 1.7 percent decline in salary.

Lawrence Herman, president of the American Academy of Physician Assistants and a PA himself, says the demand for PAs has gone up partly due to the physician shortage, but also because the role they play in practices is uniquely different. They can spend more time with patients versus time-crunched physicians, and are especially good at managing chronically ill patients with multiple conditions. "A patient will typically say, 'They explain things to me in plain English, they spend an extra couple of minutes with me, and really reassured me,'" says Herman.

When Herman describes PAs as "a force multiplier" for the practice, he's referring to their ability to multiply the number of patients a practice can care for. He says that by hiring a PA, a physician can typically "walk home … with $18,000 more in your pocket annually. And you get an extra week's vacation on top of it."

At Southeast Urogynecology, Harris has plans to hire more nurse practitioners. Because his practice is the only surgical subspecialty of its type in Mississippi, patients can travel up to four hours to see him or an associate. The practice is planning to expand services for remote patients by opening up a satellite clinic that will be staffed by NPs and make generous use of technologies like virtual consults, using Skype or FaceTime. Harris says, "Our ultimate goal is for the patient to be able to be seen in a clinic that's 150 miles away [from the practice], get her testing, that she would [normally] get right here ― that I can interpret via the Internet."

Preparing for change

After the crescendo of introduction and support for the new healthcare insurance exchanges has ignominiously died down, many practices are left wondering, "Where are all the new patients?

Jeff Waddill, divisional vice president at Staff Care, a locum tenens staffing company based in Irving, Texas, says that despite record increases in requests for NPs and PAs in 2011, practices are reticent to beef up their staffing in anticipation of newly insured patients. "It's almost the opposite," he says. "Most facilities are in a holding pattern. And everyone is kind of holding their breath, waiting to see what's going to happen."

At Great Lakes Orthopaedics Center, the practice has experienced the opposite problem. Killian says they already have many new patients who bought insurance through the exchanges. However, patients are frequently confused about their coverage. Some think that by simply enrolling, they have insurance. But until they've received a letter of confirmation, they do not.

That's why Great Lakes has already held three practice-wide meetings dedicated to preparing for new patients insured through the exchanges ― discussing ways to identify new patients, verify insurance, and counsel patients about their new insurance, which typically carries a much higher deductible.

Within the last six months Killian has hired a referral specialist and a financial counselor, and she has plans to hire two more staff. "With all the coding in here, especially right from the beginning, we've already started that whole [ICD-10] transition. So I'll definitely need to hire another biller, because my coders will not be able to work on A/R."

Stacking the deck with smart collections

Practices are holding off on hiring more staff as several costly health reform initiatives have begun to roll out. Barring outsourcing billing to a third party, working smarter is one way that practices can squeeze the max out of staff time and resources.

At Great Lakes Orthopaedic Center, a large group practice based in Traverse City, Mich., business manager Renee Killian addresses every opportunity to confirm and collect patient balances as soon as possible in the revenue cycle. Her staff verifies insurance a week prior to patient appointments, and then again, two days before patients arrive. "We are reviewing our whole collections process; it's changing rapidly because we are [accepting different insurance] plans," says Killian. She adds that her practice is grappling with sending patients to collections, especially if they are trying to meet their financial obligations. That's why Great Lakes will set up payment plans for patients, and even has financial counselors on staff.

According to Glenn Morley, a consultant with Chicago-based Karen Zupko & Associates, in 2014 "revenue cycle management is going to be a focus like no other." She advises practices to incent staff to collect all they can at the time of service by sharing collection metrics from prior years, setting financial goals, and making collection benchmarks part of annual performance reviews. Also, she says practices should reward successful collections with incentive payouts. "First explain the problem, then explain the solution, and then reward success."

To read more on successful collection practices visit AR Primer for Medical Practices; Improve Your Billing Process; Five Collection Mistakes.

In Summary

Practices have been braving the effects of a slow economic recovery, that leaves little extra to compensate staff. Here are some ways you can maximize staff roles and responsibilities, while rewarding them for excellence:

• Find the right mix of full- and part-time staff to suit your unique needs

• Don't be afraid to think outside the box, when it comes to crafting staffing models

• Be available to staff on a daily basis, and familiarize yourself with their challenges

• Provide adequate training and grooming for possible advancement

• Set incentive bonuses that are based on quarterly practice metrics

• Work smart by fully utilizing nonphysician providers

*According to our 2014 Staff Salary Survey, most medical practices are holding firm on staff compensation. Here's what practices across the country are paying.

Erica Sprey is an associate editor at Physicians Practice. She can be reached at erica.sprey@ubm.com

This article originally appeared in the May 2014 issue of Physicians Practice.