Managing Tech-Driven Staff Changes

Unless you’ve been so busy with patients that you haven’t had time to turn on a television, you know the economy is bad. Depending on who you listen to, this is either the worst financial crisis since the Great Depression or it’s a “market correction” that was inevitable. One thing everyone seems to agree on is that hard times are here to stay - at least for awhile.

As a business owner, it’s natural to start thinking about cutting costs and reducing overhead. If you’ve been taking the advice in Physicians Practice, chances are good you’ve already put some expense-saving strategies into practice.

One thing you may have overlooked is how technology can help cut overhead costs. Whether it’s an EMR system or electronic billing, technology can make your practice leaner, meaner, and more productive.

You’ve probably heard it all before - from the sales rep who tried to sell you a $15,000-a-month practice management system. The only thing the rep didn’t tell you was how to pay for it.

But here is the thing you need to know, especially in these tough economic times: Technology can end up paying for itself.

EMRs and staff reduction

The single biggest technology expenditure your practice can make (outside of specialized medical equipment, of course) is for an EMR. Don’t let the price tag intimidate you, though, because it’s also where you’ll find your biggest cost savings.

Based in Geneva, Ill., Fox Valley Family Physicians is an eight-physician practice with four midlevel providers and an active patient base of about 20,000. In the fall of 2005, it decided to implement Intergy EMR, a comprehensive software package that can handle everything from records management and e-prescribing to financial analysis and setting up a patient portal for the practice.

For Fox Valley, the emphasis was definitely on medical records. “In a paper office, when a patient calls in there is a note taken on a little notepad that is usually put on a spindle,” explains Terri Kraft, director of practice management at Fox Valley. “Someone comes and grabs it off, goes and finds the chart, then they take that chart and bring it to the person in the practice who’s responsible. Maybe that person has to give it to someone else. It eventually needs to get back to the receptionist to call that patient back with information.”

To support its 300 daily patient visits, Fox Valley employed a sizeable staff of medical records personnel who spent the bulk of their day shuffling paper, looking for charts, and pulling charts for physicians or patient visits. With an EMR like Intergy, all of that manual work would disappear.

“The main driver for the return on investment in the system was significant staff reduction,” says Kraft. In fact, the practice targeted a reduction of seven full-time employees, all from the medical records division, over a period of approximately 18 months.

Fox Valley went live with its EMR in January 2006. Within a year - six months ahead of their projections - it was able to reduce all seven FTE positions; six from medical records and one receptionist, which surprised Kraft.

“We found that we were overstaffed because our call volumes went down,” she explains. “What we were finding was that our patients were getting calls back within a half-hour of their original call. It really reduced the number of second calls that came in from patients: ‘I haven’t heard from you, I called three hours ago.’”

The EMR also eliminated follow-up calls from pharmacies. The software’s e-prescribing module meant that pharmacists no longer had to call with questions about handwriting or incorrect dosages.

For Fox Valley, there are no second thoughts about cost-saving technology. “In our second fiscal year, it allowed us to have the best financial year we ever had,” says Kraft. “The reduction in FTEs far exceeded the cost of the system in year two.”

In a couple of months, the practice plans to go live with another cost-saving technology: an interface with the local hospital that will allow for electronic radiology reports to be transmitted directly into its EMR. Right now those reports come to Fox Valley via fax and take up a lot of staff time because of the number of referrals the practice gives.

“Once that turns electronic, our medical records staff won’t have to touch those,” says Kraft. “We’re projecting, if not a full FTE, at least a partial FTE reduction specifically due to that interface.”

Nobody likes to lower the axe

Are you one of those people who can’t bear to think about letting staff go?

You aren’t alone. Your practice might be a business, but a lot of physicians think about staff like a second family. Who wants to fire their own family - especially in the current economic climate?

If that’s how you feel, you might want to follow the example of The Center for Bone and Joint Surgery, an orthopedic practice with seven offices in West Palm Beach, Fla. At the time, the practice had nine physicians, approximately 7,000 patient visits per month, and a practice management system. Like Fox Valley, The Center was concerned about the number of employees that managed medical records.

“If you have multiple offices like we do, the logistics of transferring those charts becomes tremendous,” says David Klebonis, executive manager. “We had suitcases and employees who had to travel between offices. So you have HIPAA concerns about those charts being lost, and you have the travel concerns or the liability concerns because those employees are on the road.”

The practice wanted to add an EMR component to help streamline their work flow and ultimately allow the physicians to see more patients. Like Fox Valley, group leaders figured the gains in efficiency from electronic records would allow them to reduce staff.

“We had it in mind,” says Klebonis. “The monthly EMR expenditure we were going to have was going to be directly offset by eliminating positions.”

A funny thing happened on the way that caused a change in plans: After the EMR implementation, the practice became more successful.

“We were growing so fast at the same time that really we were able to do the exact same amount of work in many of the departments as we did previously,” says Klebonis.

What happened? In short, the technology worked. Efficiencies allowed the physicians to see more patients; a higher patient volume required more staff, just not in the area of medical records. But the practice almost eliminated the FTE positions anyway.

“When you’re growing and your costs are increasing along with your revenue, it makes it a challenge to try to recognize the ROI on a project that was two or three years in the making,” explains Klebonis. “We sort of had to take a step back as executive management and say, ‘This is what we expected, and this was the actual result.’”

The practice went from annual gross revenues of around $10 million at the time of implementation to approximately $23 million in 2007. Now it has 15 physicians and about 10,000 patient visits per month.

And none of the FTEs were eliminated.

“We took a lot of the entry-level positions and were able to pretty easily shift those over,” says Klebonis. “Things like medical records, call center and reception, front desk - there are a lot of medical clerical positions that have pretty close to the same skill set.”

Managing employee reactions

Both Fox Valley and The Center for Bone and Joint Surgery are great examples of technology making cost savings possible, but how can you manage the transition? Regardless of how each case turned out in the end, both practices planned on eliminating full-time positions.

How do you get employees on board with a technology that could ultimately cost them their own jobs?

“That was a tough one,” admits Kraft. “We were upfront with our staff from the beginning. We told them that we felt one of the end results would be a reduction in staff.”

Being upfront with employees might cause some initial anxiety - and it could lead to some staff departures, as well - but it does head off interoffice speculation and bad feelings from employees who feel that they or their coworkers were treated unfairly.

On the other hand, things might not turn out as anticipated. “I expected many of them to leave initially just because of the uncertainty of their future,” says Kraft. “Surprisingly enough, they all stayed until we actually had to let them go… It was tough, but I firmly believe that being upfront with staff really led to the success of the whole project.”

Klebonis takes a similar approach on the matter. “It’s a challenge, but those people who are supporting the new system are moving forward and are always going to have a position in the company,” he says. “You have to support those employees and find some resolution if they get the job done and work themselves out of a job. I think retraining people with entry-level skills is easier, and that’s what it takes to accommodate those employees.”

Ultimately, stresses Klebonis, decisions about staffing and technology are about best business practices - and what the business partners want to see happen. “At the end of the day, you have to motivate the employees to help out the practice and help out the physicians,” he says. “When decisions are made by the shareholders, not many people can stand in the way.”

Robert Anthony, a former associate editor for Physicians Practice, has written for the healthcare and practice management industries for six years. His work has appeared in Physicians Practice, edge, Humana’s Your Practice, and Publisher’s Weekly. He is based in Baltimore, and can be reached via physicianspractice@cmpmedica.com.

This article originally appeared in the February 2009 issue of Physicians Practice.