The Workplace: All in the Family

When family physician Lloyd Van Winkle started his practice in 1985, he didn’t think twice about whom he would hire to manage insurance claims and billing. His wife, Joanne, was already a certified coder and biller, having held the same job for the teaching hospitals where he completed his internship and residency. “She’s a professional,” he says. “She’s not doing this just for me. The business is important to both of us and we both work hard.”

A solo practitioner with Medina Valley Family Practice in Castroville, Texas, Van Winkle still relies on his wife to not only post payments to accounts, but also maintain the office software and negotiate reimbursement with payers. He notes, however, that Joanne’s greatest contribution has been helping him manage his practice more like a business. “I’m a doctor so I see things medically,” he says. “When it comes to [patient billing] she’s more business-oriented than I am, which keeps me from getting ridiculous in my approach.”

Van Winkle is not alone. Physicians in small and midsized practices often employ close friends or family members to help perform clerical jobs. In many cases, they use their spouse as an office manager, hire a relative to answer phones, or groom an adult child to take over the practice when they retire. With the cost of doing business on the rise, husband-and-wife physician teams are also cropping up as couples look to capture economies of scale.

Indeed, hiring those you know makes good business sense - at least on paper, says Betsy Nicoletti, a physician practice consultant with Medical Practice Consulting in Springfield, Vt. “Physicians who put their spouse or child on the payroll get to keep their money in the family,” she says. At the same time, physician couples who work together can reduce their office rent by half, share the cost of high-priced equipment, and pay one staff member instead of two.

Perhaps the greatest incentive for putting loved ones on the payroll, however, is the level of trust they bring to the table. “A lot of practices hire family members because they trust them more than anyone else,” Nicoletti says. “They know they’re not going to steal from them and that they are the only ones who will really care if the money comes in, so they’re more likely to make sure that people come in on time and do their job.”

Yet such arrangements are fraught with challenge. Because physicians know that person outside of the office, they may be more likely to excuse errors they commit, be overly critical, or rely on preconceived notions about their professional ability. Any history of conflicts they have can also fan the flames of discontent, creating an unprofessional atmosphere for coworkers and patients. “There are tremendous advantages to having members of the family work for you, but there are also some big disadvantages,” says Thomas Hubler, a former marriage counselor and founder of Hubler Family Business Consultants in Minneapolis, which helps family-owned businesses overcome obstacles. “It all has to do with how well you can manage the boundary between business and your personal relationship.”

At what cost?

Nicoletti agrees. In the case of spouses working together, she says, it can be tough to maintain a sense of independence, which most consider necessary for a healthy marriage. Indeed, couples that wake up together, work together, and come home together often have a difficult time carving out personal space. “I’ve worked with many practices where there’s a husband-and-wife team in the office and while it can work, I frankly don’t think it’s a very good idea,” says Nicoletti. “It becomes too difficult to separate their roles.”

Hiring friends and family, she notes, can also negatively affect office performance. While Lloyd and Joanne Van Winkle are both trained professionals, many spouses and relatives who perform clerical work are significantly less qualified than outside candidates. Worse, physicians may feel obligated to retain that person regardless of productivity - a situation that medical practices today can ill afford. “We’re not running cottage industries anymore,” argues Nicoletti. “It’s getting harder to make a living in medicine and you really need a professional running the [business end of the] practice.”

That goes double for practices looking to expand. According to healthcare executive search firm Cejka Search, having a family member on the payroll automatically makes it tough for smaller practices to recruit top talent. All else held equal, physician candidates aren’t likely to opt for a practice where favoritism or personal baggage looms large. “To attract the best candidates, going from a solo to a multiple-physician practice requires a re-evaluation of all their business practices - including the involvement of family members,” says Mary Barber, vice president of Cejka Search. “Even the most well-meaning practices are placing themselves at a disadvantage when a spouse is involved in the practice. The entitlements and habits are often unconscious, which make them even more difficult to overcome.”

Fueling resentment

Another potential pitfall to hiring friends and family is the feeling of resentment it can evoke in other members of the staff. No matter how qualified your niece or nephew may be, or how prestigious their degree, coworkers will likely view the hiring as nepotism - making it harder for that person to effectively delegate. Worse, some employees may believe that your relative took their place in line for a promotion, which can quickly erode office morale.

There is also the issue of imposing office discipline and enforcing policies. Could you really fire your own spouse? Or even discipline her in the same way that you would any other employee who, say, shows up late or does sloppy work? Even if the answer is yes, can you really expect other staff members to believe that?

“We’ve seen this in several situations and a lot of it stems from differential treatment of employees,” explains Richard Sinaiko, CEO of Sinaiko Healthcare Consulting in Los Angeles. “The physician needs to communicate with coworkers and make clear to their relative what their limits of authority are.”

Because of the many pitfalls to working with someone you know, many consultants recommend physicians avoid such hiring practices altogether. That includes the hiring of close friends and relatives of existing employees. Should issues arise with the new hire, or you’re forced to let them go, it could damage the relationship you have with your current staff members. “I would be careful about hiring siblings, spouses, and children of employees,” says Nicoletti. “If it’s a cousin or friend, however, and you have a good screening process in place for new recruits, you can use your discretion.”

Making it work

Despite the challenges, it remains quite common for physicians to work with their spouses and other family members, and we hear quite often from practices that swear by these arrangements. Most experts agree that when it’s done right it can work.

Practices that employ spouses, relatives, and friends of the family can be just as successful as those that hire trained professionals - and potentially more rewarding. According to Hubler, it all comes down to clarifying expectations. “If you go to a baseball game, before it starts you’ll notice the umpires huddled up to go over the ground rules,” says Hubler, who has hired his wife and adult children in his office over the years. “It’s the same in business.”

If it’s something you plan to do (or are already doing), you’ll have greater success by maintaining boundaries between your professional and personal lives. Work is work. Put job descriptions in writing and establish clear performance milestones at each annual review - regardless of your relationship with the employee. “When it’s a husband and wife, in particular, they tend to think, ‘We love each other so there’s no need for all that formal paperwork,’ but actually that’s all the more reason to have a contract,” says Hubler.

To head off potential arguments, he adds, make sure there’s a system in place for compensation, joint decision-making and future loans against the business. Also, determine in advance how you intend to resolve differences at the office.

Depending on the size of your practice, Hubler says, it’s also wise to notify your relative or friend that he will receive written reviews not just from you but from all members of the managerial staff. Not only does such a policy keep your relative on his toes, but it helps take you out of the equation so any ill will for a job not-so-well done - or even a firing - does not stem from your decision alone.

For spouses who work together, it’s equally important to discuss such things as how you plan to interact with each other at home and in the office, says Hubler. Most physicians, for example, would prefer to keep the personal displays of affection away from the professional setting, but everyone has his own unique boundaries. “It’s one thing to go in with lots of energy and excitement, but the reality of working together is that you’re adding another layer of complexity and intensity to your relationship and you need to discuss those potential challenges in advance,” says Hubler.

While all couples are encouraged to “leave their work at the office,” such advice is particularly critical for those who work together on a regular basis. When you’re at home and you have something work-related to discuss, Hubler suggests leaving your spouse a voicemail message at the office instead of bringing it up at the dinner table. “I do that with my wife. It’s very important that you simultaneously build the equity of your personal relationship as well as your business relationship.”

Finally, before making any job offers to those you’re close with, it’s important to make clear the scenarios under which you might choose to let that person go. “Even if they are doing a great job, you may realize it’s affecting the quality of your personal relationship,” says Hubler. “Family trumps business when it comes to relationships.” Notify your spouse or relative upfront that you don’t intend to jeopardize your relationship for the sake of work. “If you don’t work this out in advance and you have to let your niece go, there are going to be hurt feelings,” says Hubler.

For his part, Van Winkle says he’s learned a thing or two in the last 21 years about maintaining a healthy marriage while working side by side with his wife. The most important lesson? Don’t interfere. “I try not to give opinions in areas where I don’t have responsibility,” he says.

When friends and colleagues ask what it’s like to run a business together, Van Winkle says his answer remains the same: “I don’t think working together as a married couple is for everyone, but I’m sure it’s for me. I can’t imagine not having her there.”

Shelly K. Schwartz, BA, is a freelance writer in Maplewood, N.J., who has covered personal finance, technology, and healthcare for 12 years. Her work has appeared on CNNMoney.com and Bankrate.com and in Healthy Family magazine. She can be reached via editor@physicianspractice.com.
This article originally appeared in the July/August 2007 issue of Physicians Practice.