Hiring the Best Office Manager

A physician can spend up to $39,253 a year on an office manager with a little experience, according to The Health Care Group's "Staff Salary Survey, Year 2001," or up to $80,000 for a full-fledged administrator or executive director.

That's worthwhile if the result is a smooth-running, profitable practice. But too many physicians end up feeling saddled with a costly staff member who only makes life more stressful. How do you find a good manager and build a good relationship, while avoiding uneasy interactions and wasted overhead?

Just as you would build a good marriage: find a mate who meets your needs, set goals, and communicate.

Making the match

Finding the right person is the first step on the road to management bliss. The qualities that make up a Mr. or Ms. Right vary by practice size and culture.

"The kind of a person you need for a small medical practice -- say, three or four physicians -- is different than the person you need for a larger group," says Darrell Schryver, principal consultant with the Medical Group Management Association's (MGMA) Health Care Consulting Group.

A smaller practice might need someone with hands-on experience -- who can get her hands dirty with billing or answering phones. A bigger practice typically looks for a more classic manager -- someone with an MBA or MHA who can look at the big picture. "These people will stand back, run numbers to see how the practice is doing, and look for trends. ... They do it very analytically and find other people to solve the problem," explains Paul Angotti, president of Management Design in Monument, Colo., which helps practices find managers.

Some groups opt to hire a practical person to manage specific functions while outsourcing the higher-level issues to a consulting firm. However you choose to handle it, you should reassess your needs regularly. As a group grows or changes, so do its management requirements.

"Sometimes the nurse or the bookkeeper that has been with Dr. Jones for 10 years isn't the right person anymore," Schryver says. Either way, a recruit's academic achievements will probably end up being less important than hard-earned experience in a physician office.
 
Attitude counts

Along with real-life training, look for an attitude that fits. For example, Schryver is currently looking for an administrator for two quite different groups. One has 10 physicians and a very strong board. "You aren't going to be successful if you hire an administrator who is a control-and-command type person" for that group, he says. But the second group lacks strong physician leadership, so Schryver is looking for a more assertive administrator to fill the gap. "Clearly identifying what you want is crucial," he says.

Edgar Silvey, who won MGMA's Administrator of the Year award in 2001 and manages a 78-physician multispecialty practice in Baton Rouge, La., adds that physicians should look for managers who "understand the schizophrenic nature of practice management."

As an administrator keeping track of the business side of the practice, a manager is, in a sense, the physicians' boss. He has to be able to give the physicians good advice, Silvey explains. At the same time, of course, the manager is obviously employed by the physicians, who take all the financial risks.

Some managers have difficulty striking the right balance; problems often arise when managers suggest business policies that the doctors believe would deteriorate the quality of care they provide.
"Anytime business and medicine go head-to-head, medicine wins. Some administrators have trouble with that because they feel like the physicians don't respect their expertise," Silvey observes. "A lot of people get into healthcare management thinking a practice will function like a Fortune 500 company."

When it doesn't work out that way, the administrator is disappointed and the physicians are annoyed. Silvey advises administrators to see themselves not as commanders but as advisors, adopting a position of "servant leadership."

Schryver agrees: The manager's role "is an assigned role, not an assumed role. They are not at risk. Too many administrators assume they can step in and say where the group is going and how it should get there."

In your interviews with prospective managers, ask the candidates what made them get into health administration, Silvey suggests. That will help weed out applicants with the wrong expectations. "If they've got passion for the business, I'll hire them and educate them," Silvey says.

Also ask candidates to demonstrate skills you'll need them to have. For example, give them a denied claim and ask what they would do with it. If you need help managing your phones, ask what they would suggest.

Get what you want

Whether your manager is a brand-new hire or has been with you for years, you need to put some work into making the relationship function well. Namely, you need to set goals and expect action.
"Communicate your goals so you can keep it nonpersonal. Like the Godfather says, 'it's not personal; it's business,'" Angotti notes.

You don't want to have annual reviews with your manager based on nothing but subjective observations and general discontent. Instead, "sit down annually and say 'This is what we want you to achieve in the next year,'" Schryver advises, adding that it's wise to make the goals measurable and connected to deadlines. "The worst thing a group can do ... is not set any measurements. Have frequent meetings and hold people accountable."

Reasonable goals can be whatever you want -- as long as the manager knows what is expected in advance. Typically, though, Silvey says managers should be able to produce and understand:

• financial statements, including differentiating between cash and accrual basis accounting;
• reports on reimbursement, by carrier,
   procedure, or whatever the practice needs;
• incident reports, which you'll need if an employee falls, is stuck by a needle, or if an issue arises regarding professional liability;
• pay formula calculation, under whatever formula the physicians want;
• human resources, including hiring, managing and firing of staff; and
• regulatory and legal issues, with at least some idea of what OSHA, Stark, HIPAA, and other regulations require.
  In smaller practices, an administrator might simply provide reports on the number of new patients seen, the number of existing patients seen, the number of surgeries performed (if applicable), net collected revenue, and expenses.

"Every business has a few things they need to keep their finger on," Angotti says. "If you track these things, you'll know when something is going wrong and you'll probably know what to do."

Communicate openly

On top of setting measurable goals, it's up to the physician to set the right tone for a physician-manager relationship. The biggest mistake? Encouraging a manager to hide bad news. Honesty is essential to any good relationship.

Of course, few if any physicians will tell a staff member to lie or omit important information, but actions speak louder than words. If a physician acts as if staff is there to keep business issues out of his hair, staff will pick up on that and try to "protect" him. The result: A physician who is one day surprised to find out that his manager is quitting and the practice has lost thousands of dollars over the past year.

"Staff [members] feel like it's their job to isolate the doc from the operational problems of the practice, so things go on for years," Angotti says.

Silvey's advice for managers is, "Never lie, never hide anything. I don't care how bad the news is. It's extremely important to keep the owner aware of what's going on in the practice. The practice can't improve if the owners, the major assets, aren't aware of what's going on."

Ideally, physicians will respond to bad news appropriately, looking for ways to cooperatively solve the issue. In that way, too, physician-manager relationships are like marriages. They take conscious effort, but can pay off in the long run.

Pamela Moore, senior editor of practice management for Physicians Practice, can be reached at pmoore@
physicianspractice.com.

This article originally appeared in the November/December 2002 issue of Physicians Practice.